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Proposal to develop and document options for: “Utilization of Heavy Oil Vent Gases” May 10, 2000

Proposal to develop and document options for: “Utilization of Heavy Oil Vent Gases” May 10, 2000. Agenda. Introductions Making a Change Happen About New Paradigm Engineering Ltd. Proposal Overview Proposed Deliverables Why this proposal now? What is needed to make the project happen?

ethan-ballard
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Proposal to develop and document options for: “Utilization of Heavy Oil Vent Gases” May 10, 2000

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  1. Proposal to develop and document options for:“Utilization of Heavy Oil Vent Gases”May 10, 2000

  2. Agenda • Introductions • Making a Change Happen • About New Paradigm Engineering Ltd. • Proposal Overview • Proposed Deliverables • Why this proposal now? • What is needed to make the project happen? • Questions and Feedback • Wrap-up and Next Steps

  3. The Target for Change Oil & Gas Methane Emissions Heavy Oil Venting 29% Ref: CAPP Pub #1999-0009

  4. Where Are We Now? • $50M/yr of methane vented from heavy oil sites • Equivalent to 5% of O&G Industry energy use • $20-$40M/yr of energy purchased for heavy oil sites • GHG emissions from heavy oil wells • 30% of oil & gas industry methane emissions; • 15% of oil & gas GHG emissions • Over 2% of Canada’s GHG emissions • GHG, Flaring and Odour Issues affecting our ability to develop new leases

  5. Where Do We Want To Be? • Vent gas as a revenue stream • Minimize purchased energy costs • No purchased energy for wells that are venting • Low tech  low cost operations • Achieved with minimum of waste

  6. How Could We Get There? • Displace purchased energy sources • Power from vent gases • Compression for sale or reinjection • Use gas and/or energy for EOR • Convert methane to CO2 • Tank vent treatment to eliminate odours

  7. What Is Stopping Us? • Venting seen as an environmental problem, not economic opportunity • Capital budget for conversion set on a corporate relations basis • Payouts on systems beyond fuel displacement are long • Vent volumes are variable so tough to do single well economics or design facilities • No one has time to invest in studying potential options

  8. How Can We Make Things Happen? • Collaborate to define the options and the prize • Work together to make the case for casing gas utilization • Co-operative and collaborative efforts on the gas side of heavy oil • Joint Industry Project (New Paradigm) to provide focus

  9. About New Paradigm Engineering Ltd. • Independent consulting company, Inc. 1991 • Engineer “new paradigms” for industry • Bruce Peachey, P.Eng. – President • Colin Gosselin, E.I.T. – Technology Development Engineer • Focus for last two years on reducing methane emissions and developing new technology to support conventional heavy oil vent gas mitigation. • Previous work in collaborations: • Downhole oil/water separation (C-FER), • Novel EOR methods (C-FER and KeyTech), • Heavy Oil Pipelining Study (C-FER, SRC) • Climate change (CSChE), • PERD study on Hydrocarbons R&D (K.R. Croasdale & Associates)

  10. New Paradigm – Bruce Peachey, P.Eng. • Project Manager and Lead Engineer • Past Experience: • Principal New Paradigm Engineering (9 yrs), • Esso Resources (15 yrs): • Sr. Facilities Engineer; • Technical Services Superintendent; • Project Engineering Section Head; • Project Engineer; • Technology Evaluations Engineer; • Heavy Oil Production Engineer; • Process Design (Gas Production/Compression) • Expertise – Gas Gathering systems/plant design; Heavy oil production; Steam generation; Operations; Project Management; R&D Prioritization; Innovation

  11. Proposed Support for Vent Gas Utilization Study • EMF Technical Services Inc. • Holly Miller, P.Eng. • Marlett Engineering Ltd. • Jamieson Engineering • Heavy Oil and Gas Producers • Vendors (New and existing technologies) • Extensive contact networks (PTAC, PTRC, Universities, ARC/C-FER/PRI, CIM, SPE, CSChE)

  12. EMF Technical Services Inc. - Calgary • Electrical Power Generation and Distribution • Cogeneration facilities (proposals and economics) • Electrical and control systems design • Engineering design and construction • Oil and gas pipelines, compressor stations, pump stations and processing • Motivated and creative solutions

  13. Holly Miller, P.Eng. - Edmonton • Contract Engineer – Project Development and Design • Past Experience: • Sr. Engineer with Polytubes (West) Inc. 4 yrs, • Esso Resources/Petroleum/Chemical (14 yrs): • Sr. Operations Engineer, • Sr. Process Engineer, • Development Engineer • Expertise – Refinery energy conservation, heavy oil upgrader studies, Cold Lake Phases 1-6 Debottleneck, gas conservation plant operations and facilities upgrades, managed implementation of new reactive extrusion pipe manufacturing process

  14. Marlett Engineering Ltd. – Edmonton • Principal – Fret Marlett, M.Eng., MBA, P.Eng., FCSME • Specializing in combustion and gas fired equipment • Past Experience: • Enbridge Pipelines Inc. (1 yr) • Northwestern Utilities Limited (24 yrs) • Senior Engineer, Utilization and Research • Assistant Utilization Engineer • Assistant Transmission Engineer • Key roles: • APEGGA Rep – Gas Technical Council of the Alberta Safety Codes Council (1997-Present) • Secretary, City of Edmonton Gas Approvals Board (1974-1978)

  15. Jamieson Engineering - Edmonton • Principal – Marnie Jamieson, P.Eng. • Process Control, Materials, Process & Environmental Engineering • Past experience: • AT Plastics (2 yrs), • Syncrude Canada (8 yrs), • Work terms Dow Chemical (Research), Esso Resources (Operator), Environment Canada (Engineering Asst.) • Roles – Plant Engineer, Environmental Engineer, Applications Engineer, Corrosion/Materials Engineer.

  16. Proposal Overview - Objectives • Evaluate options to utilize casing gas • Assess criteria for successful application • Pro’s and Con’s of the Options • Technical • Financial • Operational • Implementation hurdles • Overall – Facilitate decision-making; leading to rapid and economic implementation of systems to reduce methane venting from Heavy Oil sites.

  17. Work Scope – Focus Areas • Displace purchased fuel use (15%) • Power generation and sales (30%) • Gas collection and sales (30%) • Use to Increase Oil Recovery (10%) • Convert methane to CO2 (10%) • Mitigation of tank odours (5%)

  18. Key Issues for Heavy Oil Venting Options • Technology Issues • Many options exist now but are not widely used. • New ones may be developed where needed • Producer Management Issues • Economic Solutions - Why Not Implementing? • Environmental Solutions – Define Priorities and Resources • Government/Regulatory Issues • Rules to Level/Define Playing Field • Barriers to implementation • Carrot vs. Stick Philosophy

  19. Displace Purchased Energy Options Winterization Tracing; Dryers; Anti-freeze; Fuel Heaters Low Pressure Fuel Mini-compressors; Low Pressure Burners Increase Efficiency Improve Tank Heating: Combustion; Heat Transfer Co-gen (heat & power)

  20. Power from Vent Gas Easy Sites Pads with lots of gas; Near power lines Small Sites Single, high GOR wells; Near Power lines Remote Sites Small local loads; Lights, Remote Control

  21. Gas Collection and Sales Fuel for New Wells Similar to Winterization: Temporary flowlines? Local Sales Mini-compressors; Mini-dryers; Tie-in to Existing lines Sales to Pipeline Low pressure collection; Central treating and Compression facility

  22. Increase Oil Recovery Pressure Support One well per pad takes Compressed Gas Mini-EOR Small steam generators; Methane cycling Collect gas for use in other Areas (Royalty Free) Large Scale EOR

  23. Methane Conversion Flares Low cost, low liquid Low visibility flares Catalytic Oxidation Portable, low visibility, Potential for use of energy GHG Credits Requires auditable Measurement of conversion

  24. Mitigation of Tank Odours Micro-incineration Use casing gas; Incinerate tank vents Catalytic Oxidation Low cost, low maintenance Other Options Absorption; Adsorption; Active Dispersion

  25. Schedule • Detailed schedule once participation confirmed. • Remain flexible yet meet deadlines. • Key dates: • Start May, 2000 • Winterization Options by Sept 2000 • Draft of Main Report by Dec 2000 • Main Report by Year end 2000/1Q2001 • If participation allows – extend work to follow-up actions

  26. Proposed Deliverables • Interim Report on Options to Displace Purchased Energy • Analysis; Powerpoint Summary; One Page option sheets • Draft Report • Powerpoint format and workshop to review • Main Report • Full Document (2 copies) • Powerpoint format (paper and electronic) • Options (cost recovery basis) • Field presentations, extra reports

  27. Benefits to Participants • Focused effort to quickly identify low cost, economic and safe options for use of vent gases • Reduces workload on in-house staff • Provides leverage instead of everyone redoing the same work • Allows vendors to easily communicate information on the options they can provide • Helps define what can be achieved now and what requires new technology

  28. Why this proposal now? • Expansion of operations generates resistance from public • Pressure mounting to show voluntary progress • Producers no longer in “survival” mode • Options appear to be available and economic • Producers are busy with producing Oil, not Gas • Vendors with viable options frustrated • Appears to be opportunity and interest in collaboration

  29. What is needed to make the project happen? • Funding to do the Work • Support from Producers  Operating Information • Support from Vendors  Product Information • Others • Regulators  Drive to change

  30. Funding Proposed (For discussion) • Open to any organization on same terms • Reports to participants only • Current basis $15,000 per participant (at least 4 preferred) • Can proceed with more or less but depth of analysis varies • After study 60% complete, new participants pay a premium (20%) • Funding used to monitor developments • Option to expand to thermal heavy oil venting

  31. Questions and Feedback

  32. Wrap-up and Next Steps • Confirm participants as soon as possible • Finalize detailed proposal to level desired by participants • Begin work so benefits can be realized • Other?

  33. Contact Information Advanced Technology Centre 9650-20 Avenue Edmonton, Alberta Canada T6N 1G1 tel: 780.450.3613 fax: 780.462.7297 email: info@newparadigm.ab.ca web: www.newparadigm.ab.ca

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