Preview: Sogat

In the UAE Soaring domestic demand coupled with unflappable economic ambition has thrown the development of the region’s most challenging hydrocarbon resource front and centre. Abu Dhabi’s sour gas development, after many years of discussion, was finally made concrete in July 2008, with pen going to paper when ConocoPhillips secured the project.

The project is technically challenging, the resource is highly sour, and the need for development is great.

Although there are several factors that combine to explain the timing of the development, the driving one is the growing need for domestic electricity generation feedstock.

The UAE as a country, and the region as a whole, is facing a genuine gas-crunch. Unthinkable just a decade ago, but a reality all the same, the Middle East is running low on fuel to support its industrial and residential needs. With economic growth outpacing even the fastest growing nations outside of the region, development is rampant, and with that economic success comes an insatiable appetite for power.

“The timing question can be summed up in two words,” says Nick Coles, founder of the Sour Oil & Gas Advanced Technology conference and exhibition (SOGAT). “Sheer necessity. Abu Dhabi alone expects to triple its resident population in the coming decades and power generating capacity has to be stepped up at least to keep pace.”

The fact that the UAE, a country blessed with enormous conventional hydrocarbon reserves, is looking seriously at the construction of nuclear power plants, two as of October, highlights how significant that need for extra power is. On top of fuelling the country’s commercial interests comes a huge demand for desalination, a colossal drain on electricity capacity region-wide.

The UAE holds the world’s fifth largest gas reserves, the majority concentrated in Abu Dhabi, and much of that is extremely sour. The Shah Field, recently scooped by ConocoPhillips, and the open Bab Field are both among the most sour reserves considered recoverable, with an H2S content around 30%. To put that into context, Qatar’s vast North Field is sour, but only 5% H2S.

The main challenges are two-fold with sour gas. Firstly there’s the economic factor – the production costs involved are very high, and secondly, the technical challenges of dealing with the sour product – essentially stripping it of all impurities, is no easy task. “Also, with products which are very sour, such as the Bab and Shah Fields in Abu Dhabi, there are other challenges pertaining to sequestering the by-products,” explains Samuel Ciszuk, energy analyst – Middle East and North Africa, Global Insight.

On a smaller scale these impurities can be captured, stored and sold, thus maximising the economic gain from every cubic foot produced. However, on the scale of the proposed Abu Dhabi fields the vast quantity of sulphur produced each day exceeds not only local markets, but the entire global demand for sulphur, raising further challenges to the exploitation of resources.

There are many uses for the by-products of sour gas production, but with the scale of the Abu Dhabi developments, the problem is that the operator would very quickly acquire mountains of sulphur powder. It’s a hazardous product and there’s simply no need for such a quantity on world markets.

To combat the sulphur mountain scenario, once the material is sequestered from the gas an alternative storage solution needs to be met quickly. One solution is reinjection. By pumping the contaminants back into the field not only is it safely stored, but it increases the recoverable assets too. However, over time this will lead to an increasingly sour product, placing further strain on the infrastructure and processing facilities.

Properly treating and disposing of contaminants in a safe and ecologically sound manner is one of the biggest challenges the gas industry is currently facing. Being successful in this endeavour also means unlocking enormous hydrocarbon resource potential, while providing a substantial benefit for the national economy of the country in which they are located.

Breakthrough

Several highly significant technological developments have been delivered in recent years. Metals and alloys which are resistant to the corrosive effects of sour gas, are now deliverable at a more affordable price.

“In the Shah Field the gas is extremely sour, extremely corrosive, with something like 30% hydrogen sulphide as well as other impurities. My understanding of the technology is that just five or six years ago this would have been regarded as either not possible, or if it was, then certainly not economically viable,” says Ciszuk.

Sour gas remains very challenging, but increasingly the world will be turning to more difficult resources to meet its energy needs. It tests engineering to its full capabilities, but also it pushes the supply chain to its limits.

The kind of materials needed to handle gas at these very high pressures is quite exotic.

Processing plants require massive quantities of incredibly high grade steel, which is difficult to manufacture and shape. The global production of these high-end products is very expensive and the supply is fairly fixed.
Partly because of the oil and gas industry boom over the past 24 months, and partly because of the technology demands, the Shah Field development ranks among the most expensive production projects slated world-wide.

Sour hub

The cost of sour gas production and processing projects is huge, but so are the wider ambitions harboured within the Emirates. In order to make the dream a reality a solution must be found, and sour gas is leading the drive. The scale of the projects, and the technical expertise which will descend on Abu Dhabi in the coming years will transform the knowledge geography in the sour field.

“The UAE, in a relatively short space of time, will find itself a global leader in the field of sour gas development and cutting edge technology deployment,” says Mohammad Ayoub, regional operations leader and general manager for GE Oil & Gas. “We don’t see the same deployment or enthusiasm in Saudi or Kuwait reservoirs. The reserves are sweeter and, for Kuwait, water injection is the big challenge in the future because historically this has been the favoured solution,” he adds.

The significance of the win for ConocoPhillips can’t be overstated, and the fact that they’ll concentrate their own expertise, and that of successful partners, in Abu Dhabi for the years ahead will make the UAE capital the de facto port of call for other NOCs looking to expand their sour capabilities. ConocoPhillips will be the first company to build and deliver on a project of this scale and nature. They’ll establish themselves as a leader at a critical juncture in time.

“In unlocking these reserves at a time and in a region where other countries who sit on sour oil and gas are experiencing a gas crunch is massive for ConocoPhillips. These other countries will no doubt start thinking seriously about this kind of development,” observes Ciszuk.

There were a large number of bidders tendering for the Shah Field, and it’s no secret that Occidental was seen for a long time as the front-runner. Ultimately, everyone wants to be a pioneer, so it’s a feather in the cap of ConocoPhillips.

Time and again we have heard IOCs and oilfield service companies say they are committed to the region, and quite often support their claims with a demonstration of that commitment. As we move forward it is highly likely this will be the case across the board for all the successful partners in the sour projects.

All of this will help cement Abu Dhabi as a centre of excellence and learning in this important energy field.

Regional Project Update

Project Title: Saih Nihayda Gas Plant, PDO Oman. SNC Lavalin provided the full EPC services on LSTK basis (2006).

Description: 700 Million SCFD Gas and  63,000 BPD Condensate Plant Capacity, comprising:

• Gas Gathering facilities
• Mercury Removal
• Gas/Condensate Water Separation
• Gas Dehydration
• HC Dew point Control
• Turbo- expander gas conditioning             

Project Title: Bid Boland Gas Treating Plant II, NIGC, Iran. SNC Lavalin carried out the FEED development (2008)

Description: 2 Billion SCFD Sour Gas Plant Capacity, comprising:

• 4 Gas Sweetening Trains for H2S removal
• 2 Water Dehydration Units
• 2 Gas Chilling and Fractionation Trains to recover Ethane (92% recovery), Propane, Butane and Pentane Plus products
• Products Treating for Sulphur removal
• Refrigerated Storage for Propane and Butane Products
• Acid Gas Compression and Dehydration
• Sales gas Compression
• Condensate Stabilization      

TECH TALK

 

WHO: Sriram Iyer
Co: LEWA

The Abu Dhabi development project is really exciting, and is in an advanced stage of being finalised. It entails is a huge investment to remove the H2S and CO2. The main reason natural gas hasn’t been exploited more to date in the UAE is that it is so sour. The amount of H2S is significantly lower in Qatar. But in the UAE now they have come to a stage where it is worth the money.

What we are trying to project through SOGAT 2009 is that we have pumps which can handle this H2S and CO2 in liquid form. When these two gases are pressurised to around 80 bar they become liquid, and handling it as liquid is much more efficient than in a highly pressurised gaseous state. Firstly the volume is around 150 times less. Once you have it at high pressure it’s easier to inject it back into the field. Reinjecting it also takes care of the environmental concern. Putting it back into the well also has associated advantages such as helping to maintain well-pressure.

Sour gas emerges as a mixture of low-boiling liquids to gas, or condensates. These condensates can be easily removed and pumped out. As the gas is extracted it has to go to a sweetening plant, like an amine sweetening process. The amine circulation requires specialised pumps.

Handling sour gas requires special materials, which drives the price much higher than sweet gas processing. Because of this we have only really started exploiting very sour reserves fairly recently, compared to sweeter, more conventional gas deposits.

Removing H2S from the gas produces by-products, such as sulphur. In the good old days sulphur was expensive, and this could be sold downstream to the fertiliser sector. Now there is arguably a glut of sulphur in world markets and the price has fallen considerably .

Over a period of years excess sulphur would be a significant problem, so putting it back into the well seems the smart option.

This is a perfect use for some of the bigger LEWA pumps.

There are issues of safety to consider too. With a centrifugal pump the pump can do the job adequately, but there is an increased risk of fugitive emissions. If there is a seal failure then this poses a major HSE issue. Diaphragm pumps takes care of these issues perfectly, and we’re very interested in marketing these to the interesting projects around the Gulf.

TECH TALK   

WHO: Soren Kjaer, Perma-Pipe

Liquid sulphur is a very difficult liquid to handle. It is solid up to 115ºC, but above 155ºC it changed viscosity and you can’t pump it. For pipeline transportation this is a very narrow operating window.

Perma Pipe’s skin effect current heat tracing solution is the most cost effective heat tracing design for long runs of pipe. This can regulate the temperature safely and accurately even if production is shut-down for maintenance. The design can be furnished as a single end power feed or mid fed power feed design on preinsulated pipe or field insualted pipe applications.

We try to do all of the pipe treating in the factory, as field work is expensive, more difficult, and comes with associated quality control challenges.

 Skin effect current heat tracing combines the engineering principles of skin effect and proximity effect design that offers an economical solution to heat tracing problems in long pipelines by providing a single or mid-fed power point.  Perma-Pipe can design and supply a complete system that includes the engineering, material, and preinsualted pipe system for any application.  We can also design a system for existing pipe systems. 

PERMA-PIPE has supplied this system for resins, fuel oil, paint lines, sulphur, benzene, styrene gas, praxylene, chemicals and acids.

We are headquartered in the US, but for this region we have a facility in the UAE in Fujairah, and one facility in India. We provide a whole spectrum of piping products and solutions, for a wide variety of industries, but the biggest business sector here is the oil and gas business, and within that, for us it has been sub-sea pipelines.

TECH TALK

WHO: Gulshan Dua – vice president, process engineering & gas processing, SNC-Lavalin

“We don’t use any proprietary technology of our own, which is a big plus as far as the customer is concerned. We are technology neutral so we always consider what solution best fits the specific client needs.

In the last 10 years we have built 15 sour gas plants.

Licensing for some sour gas technology can be an issue in some parts of the world, such as US trade embargos. In Iran this is an issue because the most optimal technology, which is readily available, is restricted by the US trade embargo.

We have been doing a lot of gas processing work in Saudi Arabia and Oman. In Iran we are doing FEED for a 2bn cubic ft / day sour gas plant called Boland Gas Treating Plant II, for the National Iranian Gas Company.

In the future more and more of the energy mix is going to be coming from difficult sources such as shale or sour gas fields which have been untouched so far. The least expensive energy has already been largely exploited. I’m certain the current surplus of energy is a very short term blip. In the long run fossil fuels will become scarcer and sour gas will be one of the areas which steps in.

The SOGAT event in March will host a Carbon Capture element, and I will be presenting a paper there. UAE is in an ideal position to take advantage of CCS technology. For example, ADCO have big plans for using CO2 sequestration for oil recovery. There are estimates that production could be boosted by 6.5 billion barrels by deploying CO2 sequestration.

Growing environmental concerns and imminent regulations to deal with green house gas  emissions would, in the coming years, lead to CCS (CO2 capture, transport and sequestration)  becoming an essential component of any new major fossil fuel based facility. This includes oil & gas production and processing, oil refining, power, aluminum and steel plants.

The first step in a CCS development plan is identifying and then technically and economically evaluating options for CO2 capture and, in parallel, carrying out a similar exercise for the CO2 sink options.
 
Wherever practicable, the initial CCS projects will be for enhanced hydrocarbons recovery purposes, as they add value. For CO2 capture, a high level screening analysis is suggested to shortlist the CO2 capture candidates to a smaller number such as three or four, to be subjected to detailed evaluation.

The key factors involved in the screening exercise are: CO2 raw stream composition in respect of CO2 concentration, presence of various contaminants (H2S, oxygen, Sox’s, Nox’s etc), besides volumes involved and available pressure and temperature conditions; proximity between the source and the sink, and the required wellhead injection pressure.
 
The best option is the one with the lowest capex, opex and the least passive CO2 generator. The presentation I will be making at SOGAT 2009  covers practical tips for screening along with practical design considerations for CCS in achieving the foregoing objectives.