Escolar Documentos
Profissional Documentos
Cultura Documentos
Gregory Walz
Opening Remarks: John Royall, President and CEO, Gulf Publishing Company
Keynote Address
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Email: grantprideco@nov.com
CONTENTS
AUGUST 2014 / VOL. 235 NO. 8
35
SPECIAL FOCUS:
OIL COUNTRY
TUBULAR GOODS
35
NORTH AMERICAN
DRILLING UPDATE
53
REGIONAL REPORT:
WEST AFRICA
78
43
53
L. White / A. Waterman
85
Identification of potential
pre-salt basins and improved
deepwater technologies leads
to targeted licensing rounds
78
COLUMNS
7
15
17
65
Drilling advances
21
23
25
V. Boucher / N. Osayande
E. Mammadov / S. Sephton
SAND CONTROL
71
N. Ritchie / H. McIntosh
27
Executive viewpoint
Travails and triumphs
of a frontier explorer
29
Offshore in depth
BOEMs rational decision to open
Atlantic OCS to exploration
DEEPWATER/SUBSEA
109
19
J. Redden
UNCONVENTIONAL RESOURCES
Energy issues
Public awareness not
what it could be
J. Redden
103
First oil
Innovative thinkers
Freedom to rock:
dGB Earth Sciences
130
DEEPWATER REGULATORY
COMPLIANCE
31
Industry at a glance
117
123
B. Montaruli / L. Feijo
124
125
126
Marketplace /
Advertising sales offices
127
Advertisers index
128
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PUBLISHERRon Higgins
EDITORIAL
Editor-in-ChiefPramod Kulkarni
Executive EditorKurt Abraham
News EditorMelanie Cruthirds
Associate EditorRoger Jordan
Contributing Editors
Dayse Abrantes, Brazil
Dr. A. F. Alhajji, Middle East
Dr. Roger Bezdek, Washington
Ron Bitto, Offshore
David Blackmon, Reg. Affairs
Robert Curran, Canada
Don Francis, At Large
William (Bill) Head, Exploration
Raj Kanwar, South Asia
Ian Lewis, EAME
ADVERTISING SALES
See Advertising sales offices
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4AUGUST 2014/WorldOil.com
President/CEOJohn Royall
Vice PresidentRon Higgins
Vice President, ProductionSheryl Stone
Business Finance ManagerPamela Harvey
Part of Euromoney Institutional Investor PLC. Other energy group titles include:
Hydrocarbon Processing and Petroleum Economist
Publication Agreement Number 40034765
Printed in USA
CAMERON
ONS 2014
www.c-a-m.com
AD01503CAM
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FIRST OIL
PRAMOD KULKARNI, EDITOR
every effort to blend into the local environment and minimize visual, chemical and
noise pollution as much as possible.
Stay off the front pages. The Santa
Barbara beach spill (1969), Piper Alpha explosion (1988), Exxon Valdez leak (1989),
Deepwater Horizon blowout (2010), and
recent oil train derailments, have made
front page news, and scarred the oil and gas
industrys image. Of course, oil and gas activity is inherently dangerous. We should,
however, do all that is humanly possible to
prevent catastrophic incidents.
Reduce pollution. The industry
should continually invest in technology
to install leak-proof valves and reduce fugitive emissions. Fracing risks should be
minimized through frac-water recycling
and responsible water management. Traffic through urban areas should be minimized. Noise reduction, through quieter
compressors and engines, should be a
high priority. We should continually improve pad usage and multilateral drilling,
to reduce the number of wells needed to
drain a particular formation.
Oil-and-gas-to-wire technology. Energy transportation by electricity is perhaps the most efficient and convenient.
Electrical vehicles are also becoming increasingly viable as a mode of transportation. We should develop small-scale power
plants, nearer to oil and gas fields and gathering facilities, that can convert the fossil
fuels to electricity and transfer the energy
to the grid as soon as possible.
Wheres the money? Im sure youre
already thinking about how we can pay for
such utopian solutions. The oil and gas
industry has long considered delivering
cheap and plentiful energy as its mission statement. Plentiful is appropriate,
but cheap may no longer be compatible
with the demands for greater attention
to health, safety and the environment.
We would have to pass on the additional
costs to the consumers. After all, havent
people come to terms with paying more
for globally responsible products (think
Starbucks) and organic produce?
IN THIS ISSUE
35
53
88
ENHANCED
HANCED QUIKRIG
QUIKR COILED TUBING SYSTEM
Faster and safer rig-ups equate to efcient well interventions. Halliburtons Boots & Coots
service line the coiled tubing experts introduce their next-generation Enhanced QuikRig
(EQR) system. Suitable for work in new and mature elds and ideal for unconventional markets,
this system can be rigged up in half the time of a conventional unit. Plus, the QuikRig systems unique
design featuring pre-assembled well control equipmentcapable of deploying extended bottom hole
assemblies, and coupled with a latching mast designhelps provide safer operations by signicantly
reducing the risk of working under suspended loads.
Faster rig-up. Safer operations with fully supported loads.
Whats your well intervention challenge? Boots & Coots is ready to go.
To learn more, visit at Halliburton.com/boots-coots
Solving challenges.
Boots & Coots
2014 Halliburton. All rights reserved.
EXPLORATION ////////////////////////////////////////////////////////////////////////////
Gazprom Neft starts drilling
at Arctic eld
Gazpromneft-Sakhalin, a subsidiary of Gazprom
Neft, has started drilling a new exploration well
in Dolginskoye field, on the continental shelf in
the Pechora Sea. The work is being carried out
during the ice-free months of 2014, and will involve
drilling a single well to a depth of 3,500 m and
conducting a full range of geological investigations.
Gazprom Neft has worked previously in the area
at Prirazlomnoye field. Based on initial studies,
the company said that a further program will be
drawn up to explore the field and to prepare for
exploratory drilling during the ice-free seasons in
following years. Drilling and well testing will be
carried out in 2014 by the GSP Saturn jackup, which
arrived on site in mid-June and is installed directly
on the seabed. Photo courtesy of Gazprom Neft.
Egdon Resources has begun drilling the Wressle-1 conventional oil exploration well in Lincolnshire License PEDL180,
to the east of Scunthorpe. Wressle-1 spudded on July 19,
and drilling is expected to take approximately 38 days. The
planned well will be drilled as a deviated well to a TD of
about 2,300 m. It will intersect a number of prospective
Upper Carboniferous sandstone reservoirs near the crest
of the Wressle structure. The Wressle Prospect is defined
by proprietary 3D seismic data, which were acquired by
Egdon in February 2012. The prospect is on trend with
Crosby Warren oil field and the Broughton-B1 oil discovery,
both to the immediate northwest, and the Brigg-1 oil
discovery, to the immediate southeast. The gross mean,
prospective oil resources at Wressle are estimated to be
2.1 MMbbl. The partners in PEDL180 and Wressle-1 include
Egdon Resources U.K. Limited (operator, 25%), Celtique
Energie Petroleum Limited (33.33%), Europa Oil & Gas
Limited (33.34%) and Union Jack Oil Plc (8.33%).
Petrobras begins
extended well
testing at Iara
GOVERNMENT/REGULATORY //////////////////////////////////////////////////////////////
API releases new standard for subsea
capping stacks
API has published new guidelines for the design, manufacture and use of subsea capping
stacks. APIs Recommended Practice for Subsea Capping Stacks, known as RP 17W, applies to
the installation of new subsea capping stacks, and can serve as a guide to improving existing
equipment. It can aid during the design and manufacturing process, and in developing instructions for preservation, transportation, maintenance, testing and operations. The document
also provides guidelines for the deployment, well shut-in and recovery of a subsea capping
stack. RP 17W is an industry response to the post-Macondo joint industry task force (JITF)
recommendations to enhance subsea well control and containment. This JITF, and others,
focused on offshore equipment, operating practices and spill response.
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DISCOVERIES //////////////////////////////////////////////
BUSINESS /////////////////////////////////////////////////
Acquisition creates top Bakken/Three Forks producer
Whiting Petroleum Corporation and Kodiak Oil & Gas Corp. have announced a definitive agreement, by which Whiting will acquire Kodiak in a $6 billion transaction. The transaction will create
the largest producer in the Bakken/Three Forks area, with more than 107,000 boed of production
in first-quarter 2014, 855,000 combined net acres, and an inventory of 3,460 net future drilling
locations. The combined entity is expected to have an initial enterprise value of $17.8 billion, total
2014 production of 152,000 boed, and proved reserves of 606 MMboe (80% oil).
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INDEPENDENCE
PRODUCTION //////////////////////////////////////////////
First oil begins at Dua project offshore Vietnam
Santos reported that oil production has commenced at the
Dua subsea project, offshore Vietnam. Sanctioned in August
2012, Dua is a three-well tieback to the existing Chim Sao
facilities in Block 12W, in the Nam Con Son basin. Gross
production from the Dua wells is estimated to average 8,000
bopd for the first 12 months of production. Sufficient oil and
gas handling capacity is available on the FPSO at Chim Sao,
to accommodate both Chim So and Dua at full production. Santos has a 31.875% interest in the Dua project, with
partners Premier Oil (operator) and PetroVietnam holding
the remainder. Photo courtesy of Santos Limited.
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ACQUISITIONS /////////////////////////////////////////////
Statoil divests
equity in Angolan
Blocks 38, 39
Statoil said it is divesting its 10%
equity in Blocks 38 and 39 of the
Kwanza basin, offshore Angola,
to Ecopetrol. In Block 39, the
10% divestment is accomplished
through two separate, but
simultaneous, transactions. Statoil
acquired 7.5% from Total under
one agreement. Statoil then
divested 10% in Block 39 through
a separate agreement, reducing its
net equity 2.5%. On April 3, Statoil
had announced the acquisitions
by WRG Angola Block 38 Limited
and WRG Angola Block 39 Limited
(both 50/50 JVs owned by White
Rose Energy Ventures and Genel
Energy Plc) of 15% interests
in Block 39 (from Statoil) and
Block 38 (from China Sonangol
International Holdings). Statoil is
also a partner in Blocks 22, 25 and
40 of the Kwanza basin.
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ENERGY ISSUES
DR. WILLIAM J. PIKE, EDITORIAL ADVISORY BOARD CHAIRMAN
A. There are other problems associated with that idea. For instance, failure
to replace reservoir fluids on a major
scale would most likely lead to severe
subsidence, often in populated areas.
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DRILLING ADVANCES
JIM REDDEN, CONTRIBUTING EDITOR
Much of the blame for APD processing delays, Kendall said, can be traced to
DOI, which, until recently, has not placed
a high priority on improving the process.
The hold-ups began raising serious red
flags with the acceleration in applications
to drill on federal lands in, and around, the
Bakken shale. To date, DOI says that more
than 3,000 wells/yr are being drilled on
federal properties, primarily in Wyoming,
New Mexico, Utah and North Dakota.
The BLM shot back that its budget and
workforce are insufficient and do not reflect its stature as the nations largest land
management agency. Rather than calling
for an across-the-board staffing increase,
Kendalls recommendations focus entirely
on personnel management issues, including the appointment of project managers
for every field office to oversee the APD
process, develop and enforce performance
timelines for application processing, and
implement performance measures.
High-tech assistance. The DOI
deputy inspector general said operators
bear some of the blame by often failing
to provide all the complete and necessary
information required to grant a permit. A
considerable chunk of the data required,
and the item that occupies most of the processing time, she said, involves the surface
review that must comply with the National
Environmental Policy Act. The surface
review takes in myriad scientific analyses,
such as hydrology, archeology, biology, and
wildlife, including an assessment of threatened and endangered species.
If the public and privately-funded Environmentally Friendly Drilling (EFD)
program has its way, before the end of
2015, operators will have at their disposal
a high-tech analytical tool that will provide
all the fully vetted data required for a complete drilling permit application. Currently
under development, the GIS-driven Land
Use Site Selection Information Tool (LUSSIT) comprises a standardized analytical
methodology that addresses the environmental issues of well placement, which its
sponsors hope will expedite permitting.
The nine-year-old EFD, which is administered through the Houston Advanced Research Center (HARC) of The
Woodlands, Texas, under the direction of
Richard Haut, Ph.D., works with industry, academic, governmental and environmental representatives to conduct, what
it describes, as unbiased research into
potentially viable technologies that address air, water and land issues. HARC is
the brainchild of the late George Mitchell,
who is widely celebrated as the father of
hydraulic fracing.
The surface components of a federal
APD are at the heart of the LUSSIT tool
that EFD is developing in collaboration
with the University of Arkansas and Latitude Geographics. If all goes well, the complex analytical tool will be ready for field
trial deployment by November 2015.
The LUSSIT, according to EFD principals, is being developed to provide producers and regulators, alike, with a flexible and practical analytical tool to help in
placing wells, so they will deliver minimal
environmental impact. The tool, which
combines data, data models and advanced
workflows, would be used in conjunction
with specially engineered software.
Computer speak aside, the idea behind
the proposed LUSSIT is to provide operators access to the best practices employed
in a given area to minimize environmental
impact and, hopefully, present to federal
regulators a complete APD, which would
expedite the approval process.
This will help operators identify where
they should set their pads and build their
roads and infrastructure, to avoid environmentally sensitive areas. It also captures
best managed practices from 20-plus projects and brings a decision matrix into the
process to help operators make better decisions, says Tom Williams, EFD senior
advisor, along with Texas A&M Professor
Dave Burnett.
MULTI-STAGE COMPLETIONS
Imitation is the
sincerest form of
attery or is it?
Only Packers Plus delivers proven, reliable
and repeatable results. We have extensive
experience to run your jobs efciently and
effectively. Contact us today and let us
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DO IT ONCE. DO IT RIGHT.
www.packersplus.com
HENRY.TERRELL@GULFPUB.COM
World Oil/AUGUST 201421
HPHT
CHALLENGES
On a recent ultra-high temperature well (432F) in the Gulf of Thailand, the RHADIANT drilling fluid
system proved thermally stable throughout the drilling process and enabled the operator reach
production faster with no NPT.
www.slb.com/hpht
Mark of M-I L.L.C. *Welling Report 2014. 59% of operators stated M-I SWACO as the drilling fluids market leader for HPHT applications.
OFFSHORE IN DEPTH
RON BITTO, CONTRIBUTING EDITOR
stability during the last few months, Venezuela continues to be a good destination
for investors. PDVSA recently reported,
in its financial statements, that it made a
profit of $15.835 billion last year, despite
the average crude oil price level dropping
to $99.49/bbl from the $103.42/bbl average in 2012. Total sales for the company
increased 5.3 %, to $134.316 billion.
Among the new investments, the
moves made by Repsol and Eniwhich
will finance production from a gas field in
Venezuela at a cost of $1 billionin the
creation of a JV company stand out. This
JV will exploit an enormous gas field off
the Venezuelan coast. PDVSA will hold a
controlling interest of 60%, and Eni and
Repsol will each have a 20% share. The
project will produce 150 MMcfgd at its
maximum output level.
Last May, PDVSA signed an agreement with Halliburton, Schlumberger
M.NOGARIN@MEDIASUR.NET
World Oil/AUGUST 201425
TAM SOLUTIONS
DEEPWATER BIG PACKERS TO AVOID BIG PROBLEMS
Swellable
packers
up to 30 in.
UNCONVENTIONAL RESOURCES
RESERVOIR OPTIMIZATION
www.tamintl.com
EXECUTIVE VIEWPOINT
FIONA MACAULAY, CHIEF OPERATING OFFICER,
ROCKHOPPER EXPLORATION PLC
was expected to be, following the continuing dispute between the UK and Argentina
over the Falklands.
The rigs progress was followed closely
as it made its way down to the South Atlantic, and each well (Rockhoppers Sea Lion
prospect was the second to be drilled in the
program) was covered in detail by the UK
media. Not only did the company have to
navigate the geological challenge, it also
had to do so with great scrutiny from both
the media and the market. This was only
exacerbated by the failure of the first well:
Desire Petroleums Liz prospect.
Planning was key to exploring in such
a distant location from traditional oil
hubs, such as Aberdeen, Stavangerand
slightly nearerHouston. Preparatory
work ensured that the port at Stanley
was appropriately equipped, so that everything we needed was on the islands;
there would be limits to this approach,
though, such as the need to send oil samples back to the UK for detailed technical analysis. But, we managed the supply
chain well and the program, in duration
and scope, was highly ambitious for a
company of our size, went smoothly, delivering exceptional results.
Premier Oil farmed-into the field in
2012, a transaction that saw Rockhopper
ensure financing through the development phase, ahead of first oil in 2019, in
exchange for selling a 60% stake in Sea
Lion. With pre-FEED work progressing,
and a TLP selected as the preferred development scenario, Rockhopper looks
toward next years further exploration
of the North Falkland basin with much
excitement. We seek to grow the regions
reserves base further, and really establish
the Falklands as the industrys newest
oil province.
Help yourself to
better returns.
As the leader in innovative sand control technology, maximizing sand-free production is our
business. It always has been. We thoroughly understand your reservoir and design solutions to
address the unique challenges of each well.
No other company has more experience or a larger portfolio of innovative technologies to help
you overcome sanding problems.
Dont let prots slip through your ngers. Call us or visit BakerHughes.com/SandControlLeader
and improve recovery factors on your next well.
+1 713-268-6218 or +44 2070 483646
2014 Baker Hughes Incorporated. All Rights Reserved. 41325 07/2014
INNOVATIVE THINKERS
MELANIE CRUTHIRDS, NEWS EDITOR
Freedom
to rock
dGB Earth
Sciences
Surely, not every intrepid entrepreneur
sets out to build an empire on the idea
that, at the end of the day, the fruits of his
or her labor will be given away for free.
But, that no-upfront-cost business model,
which the company refers to as freemium, has taken dGB Earth Sciences from
a two-man outfit, to a company with a
global footprint over the last two decades.
Getting its start in 1995, dGB has
since made a place for itself as a seismic
interpretation solution provider for the
oil and gas industry; its signature product offering is an open-source platform
called OpendTectpronounced open
detectwhich can be downloaded, at
no cost, online. The company is the brainchild of founders Paul de Groot and Bert
Bril, and takes its distinctive lowercase
name styling from the combination of the
two mens surnames.
OpendTect, and dGBs other software
products and packages enable users to
leverage technology to get a better understanding of the oil field, to better understand what to do in the oil field. Since
September 2009, more than 140,000 copies of OpendTect have been downloaded,
and one of the keys to unlocking the full
dGBs OpendTect software has 3,000
academic licenses being used at more than
340 universities around the world.
MELANIE.CRUTHIRDS@WORLDOIL.COM
World Oil/AUGUST 201429
INDUSTRY AT A GLANCE
HENRY.TERRELL@GULFPUB.COM
STATE
Alabama
Alaska
Arkansas
California
Colorado
Florida
Illinois
Kansas
Kentucky
Louisiana4
Michigan
Mississippi
Montana
Nebraska
New Mexico
North Dakota
Ohio
Oklahoma
Texas4
Utah
West Virginia
Wyoming
Others5
TOTAL U.S.
LOWER 48
1
3
5
JUN
20133
28
486
18
588
161
6
25
127
7
1,060
21
66
80
8
264
821
13
321
2,790
92
11
181
29
7,203
6,717
% DIFF.
7.1
12.8
22.2
2.4
19.3
16.7
12.0
3.1
0.0
25.4
9.5
4.5
12.5
37.5
25.0
22.7
69.2
8.4
14.6
23.9
18.2
6.1
0.0
15.7
15.9
MAY
20142
30
556
21
609
191
7
22
131
7
1,341
23
69
85
10
325
997
22
348
3,189
114
12
193
29
8,331
7,775
$7
80
70
60
50
40
30
20
10
0
$6
$5
$4
JUN
2014
MAY
2014
AVG. 2013
AVG. 2012
OPECCRUDE OIL
Saudi Arabia
Iran
Iraq
United Arab Emirates
Kuwait
Neutral Zone
Qatar
Angola
Nigeria
Libya
Algeria
Ecuador
Venezuela
NGLs & condensate1
TOTAL OPEC
9.52
2.85
3.17
2.72
2.52
0.52
0.70
1.68
1.96
0.24
1.12
0.56
2.48
6.38
36.41
9.45
2.80
3.42
2.75
2.52
0.52
0.70
1.62
1.90
0.22
1.12
0.56
2.50
6.38
36.45
9.40
2.68
3.08
2.76
2.55
0.52
0.73
1.72
1.95
0.90
1.15
0.52
2.50
6.30
36.76
9.51
3.00
2.95
2.65
2.46
0.54
0.74
1.78
2.10
1.39
1.17
0.50
2.50
6.28
37.58
OECD2
U.S.
Mexico
Canada
United Kingdom
Norway
Europe-others
Australia
Pacific-others
TOTAL OECD
11.41
2.80
4.11
0.77
1.71
0.54
0.45
0.08
21.87
11.53
2.85
3.98
0.95
1.67
0.58
0.44
0.08
22.08
10.31
2.89
4.00
0.89
1.84
0.59
0.40
0.07
21.00
9.17
2.92
3.75
0.94
1.91
0.60
0.48
0.08
19.87
NONOECD
Russia
FSU-others
China
Malaysia
India
Indonesia
Asia-others
Europe
Brazil
Argentina
Colombia
Latin America-others
Oman
Syria
Yemen
Egypt
Gabon
Africa/Middle East-others
TOTAL NONOECD
PROCESSING GAINS3
TOTAL SUPPLY
10.93
2.92
4.20
0.66
0.86
0.80
0.93
0.14
2.27
0.61
1.00
0.41
0.95
0.02
0.16
0.70
0.24
1.68
29.75
2.19
90.23
10.92
2.91
4.22
0.64
0.86
0.93
1.08
0.14
2.28
0.62
0.95
0.42
0.94
0.02
0.12
0.70
0.24
1.67
29.68
2.19
90.40
10.88
3.00
4.18
0.64
0.88
0.95
1.11
0.14
2.12
0.63
1.01
0.42
0.95
0.06
0.15
0.73
0.24
1.59
29.68
2.18
89.62
10.73
2.93
4.17
0.67
0.91
0.89
1.17
0.14
2.16
0.66
0.95
0.41
0.93
0.17
0.18
0.72
0.25
1.48
29.52
2.14
89.11
$3
Monthly price (Henry Hub)
12-month price avg.
Production
$2
$1
$0
J J A S O N D J F M A M J J A S O N D J F M A M J
2012
2013
2014
Q3 2014
Q4 2014
+/
Year ago
Ardmore Woodford
36
31
47
11
Arkoma Woodford
32
24
12
20
Barnett
261
327
57
403
142
Cana Woodford
65
94
23
74
287
267
13
268
19
1,186
1,110
1,089
97
DJNiobrara
Eagle Ford
+/
135
Fayetteville
147
127
18
194
47
120
Granite Wash
164
132
31
150
14
Haynesville
105
97
98
105
Marcellus
576
524
78
576
Mississippian
90
75
60
45
W. Texas Inter.
Brent Blend
Dubai Fateh
Source: DOE
J J A S O N D J F M A M J J A S O N D J F M A M J
2012
2013
2014
Permian
Utica
386
386
378
2,670
2,374
265
2,260
410
95
102
11
118
23
677
707
693
16
Others
2,707
2,550
85
2,651
56
TOTALS
9,394
8,853
428
9,011
383
Williston
INDUSTRY AT A GLANCE
HENRY.TERRELL@GULFPUB.COM
JUN 2014
Land
Offshore
238
2
99
49
3
1
3
1
5
6
0
16
5
0
13
1
41
1
1
12
28
11
374
51
24
9
45
10
96
0
35
0
59
0
22
0
81
23
0
0
12
9
87
36
42
0
1
13
11
1
10
1
5
4
18
17
328
70
107
0
16
27
43
0
22
0
53
35
66
5
21
3
136
115
14
10
0
29
91
34
18
10
1
6
2
3
2
14
0
6
8
3
1,184
332
Monthly average
MAY 2014
Land
Offshore
160
2
97
56
2
1
4
1
4
6
3
18
3
0
12
1
41
1
1
19
27
9
367
39
21
9
45
11
94
0
34
0
59
0
20
0
82
19
0
0
12
0
100
40
47
0
1
16
12
1
11
1
9
3
20
19
333
71
105
0
21
26
38
0
26
1
49
36
72
3
22
5
130
112
11
9
0
28
90
38
17
11
1
3
2
2
0
14
0
6
9
1
1,223
323
JUN 2013
Land Offshore
182
1
87
51
5
0
4
1
4
5
0
19
5
0
8
0
32
0
0
18
29
8
346
43
19
7
52
11
89
0
34
0
48
1
24
0
64
18
0
0
16
6
93
40
48
0
0
13
5
0
14
1
10
10
16
16
339
95
81
0
17
44
45
0
26
2
59
40
81
6
30
3
142
108
11
8
0
20
84
35
27
9
0
11
5
1
5
16
0
3
10
5
1,094
329
113
87
79
90.8
NORTHWEST EUROPE
JUN 2014 JUN 2013
108
80
76
95.0
94
93
92
98.9
88
87
87
100.0
WORLDWIDE
JUN 2014 JUN 2013
849
795
735
92.5
806
743
703
94.6
*Rigs are no longer broken out into mobile and platform categories.
JUN
2014
208
142
83
16
220
708
338
311
2,026
488
MAY
2014
210
140
82
17
224
695
342
318
2,028
485
Source: Cameron
32AUGUST 2014/WorldOil.com
APR
2014
214
142
80
16
221
718
341
308
2,040
480
JUN
2013
206
133
88
22
212
697
357
334
2,049
506
% chng
mo. ago
1.0
1.4
1.2
5.9
1.8
1.9
1.2
2.2
0.1
0.6
% chng
yr. ago
1.0
6.8
5.7
27.3
3.8
1.6
5.3
6.9
1.1
3.6
INTERNATIONAL ROTARY
DRILLING RIGS
2,000
1,900
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,100 J J A S O N D J F M A A M J J A S O N D J F M A M J
2012
2013
2014
U.S. ROTARY
DRILLING RIGS
2,000
1,900
1,800
1,700 O N D J F M A M J J A S O N D J F M A M J J
2012
2013
2014
Monthly average
JUN
2014
7
7
0
0
10
9
1
11
48
47
1
67
2
32
3
109
27
16
15
51
0
12
7
2
1
89
0
170
40
202
58
0
0
891
3
0
118
90
57
34
10
33
14
103
321
38
15
57
27
25
50
3
58
1,861
JUL
2013
7
6
0
0
8
7
2
14
41
40
1
68
1
28
0
103
23
20
13
47
0
12
10
2
3
80
0
174
34
173
53
1
0
841
8
2
143
82
48
34
13
27
14
79
271
34
20
68
32
26
52
9
58
1,766
% DIFF.
JUL 13
JUL 14
14.3
0.0
12.5
14.3
0.0
21.4
7.3
10.0
100.0
1.5
100.0
7.1
7.8
17.4
10.0
15.4
10.6
25.0
30.0
50.0
66.7
15.0
0.6
26.5
17.3
3.8
100.0
6.1
75.0
100.0
15.4
4.9
25.0
5.9
46.2
18.5
0.0
30.4
18.5
26.5
25.0
14.7
15.6
3.8
0.0
44.4
1.7
6.2
JUL*
2014
6
6
0
0
9
8
1
11
44
44
0
69
2
30
3
111
27
18
15
52
0
15
7
1
1
92
0
175
43
203
55
0
0
892
2
0
121
86
60
32
7
32
14
103
321
43
15
58
27
27
52
5
57
1,876
Note: State monthly averages may not add up to U.S. total, due to rounding.
To better understand material selection, it is necessary to examine the parameters that determine the risk of corrosion in oil
and gas wells. Corrosivity in wet sour wells is increased by the
presence of chlorides in water solutions, CO2 and H2S. An environment is considered sweet, as long as no H2S is present. However, CO2, alone, can cause high corrosion rates on carbon steel,
and does so by acidifying the solution, a process that is further
accelerated if chlorides are present.
Alternatively, an environment is defined as sour when the
partial pressure of H2S is above 0.05 psi. This increased total
pressure has only an indirect effect on corrosivity by increasing partial pressures of H2S and CO2 (PH2S and PCO2), which,
in turn, determine the amount of H2S and CO2 that will be
dissolved in the water phase. Meanwhile, the partial pressure
of CO2 influences corrosion only indirectly through its influence on pH.
Put simply, higher partial pressures substantially increase the
corrosion rate on carbon steels, due to the flow velocity and the
World Oil/AUGUST 201435
HIGH-ALLOYED MATERIALS
It is generally accepted that cold worked high-alloyed materials are best-suited for use in the types of severe environments
encountered in deepwater oil and gas wells. These materials can,
in theory, enable engineers to explore and extract hydrocarbons
more economically. Their mechanical properties are designed to
bear all the stresses that occur during operations, and produce a
high-tensile material with strong resistance to corrosion phenomena, such as SSC and stress corrosion cracking (SCC).
However, these materials have been shown to exhibit service
limitations in corrosive environmentsespecially in HPHT
fields, where there is a high presence of chlorides in formation
water. H2S and CO2 gases are prevalent in these wet conditions
and high temperatures, and expose high-alloyed components to
the risk of both SCC and SSC. To address these performance
limitations, end-users should perform a test to ensure that the selected material is suitable for application in their field.
HYDROGEN EMBRITTLEMENT
Research into the use of standard alloy steels in sour environments has found that the failure of componentsi.e. the fracturing of a production tubular caused by a corrosion attackcan be
attributed to inappropriate use in the field. These inappropriate
uses were exacerbated by a highly corrosive aggregation of hydrochlorides, H2S and H2O.
An example of component failure is illustrated in Fig. 1, which
shows an examination of material Duplex 2205 with a 125-ksi
minimum yield strength, an outside diameter (OD) of 88.90
mm x 6.45-mm wall thickness (w.t.) and a coupling size of 98.50
mm OD x 12.18-mm w.t. Further investigation revealed that the
component had suffered due to embrittlement, which was caused
by hydrogen introduced by H2S. This phenomenonhydrogen
embrittlementcommonly causes various metals, particularly
high-strength steels, to become brittle and fractured, due to hydrogen exposure at low temperatures (194F).
Temperature, F
570
DUPLEX STEELS
390
210
32
0.0001
0.1
Chloride ion concentration, %
10
partial pressure of CO2, which makes the water phase more acidic
and also forms an iron-sulfide scale.
Instead, the major issue with stainless steels is the risk of localized corrosion, especially with regard to sulfide stress cracking
(SSC), which causes failures in standard alloy stainless steels. Because of this, the partial pressure of CO2 and flow velocity can be
excluded as factors that determine the risk of corrosion in oil and
gas wells. The remaining four corrosion risk parameters are the
pH and chloride contents of the water phase, the partial pressure
of H2S and the temperature.
36AUGUST 2014/WorldOil.com
While the diagram and grading of materials is based on environments where oxygen is presentand can therefore differ from oil
wells which, typically, contain no oxygenthe findings indicate
that Sanicro 28 outperformed the duplex stainless steels.
Sanicro 28 (UNS N08028) is a high-alloy, austenitic stainless
steel designed for service in highly aggressive, corrosive environments. The material has good resistance to seawater and marine
environments, combined with excellent resistance to H2S.
Although the grade was initially designed for sulphuric acid
and phosphoric acid productionin either pipes or heat exchangerssubsequent developments have made it extremely
useful in both upstream and downstream applications. The grade
is especially useful for downhole production tubing, for which it
is supplied in cold worked condition to achieve high strength.
The chemical composition of Sanicro 28 (Table 1) has characteristics that are favorable in replacement grades for downhole tubulars in sour gas wells, containing 30.3-34 w.t.% Ni, 27% Cr and
3.5% Mo. Combined, these elements imbue the material with a
pitting resistance equivalent (PRE) minimum value of 38. PRE is a
measurement of the corrosion resistance of stainless steel containing chrome, molybdenum, tungsten and nitrogen. It can be calculated as follows: PRE= %Cr + 3.3%Mo + 16%N (% by weight).
For duplex stainless steels, the pitting corrosion resistance is proportional to the PRE number of an alloy, and, generally speaking,
a higher PRE value indicates steel that is more corrosion-resistant.
The nominal Ni content in Sanicro 28 is significantly higher
than standard alloy stainless steels 304L/316L grade. The element acts as an important austenitic stabilizer, encouraging resistance to SCC, and improves the materials mechanical properties
and fabricability. In practical terms, combined high-alloying Ni
and Cr elements imbue Sanicro 28 with considerably better resistance to sodium hydroxide than standard stainless steels of
AISI 304 and AISI 316 types.
Table 1. Sanicro 28 chemical composition (nominal values).
C
max.
0.020
Si
max.
0.6
Mn
max.
2.0
P
max.
0.025
Cr
Ni
Mo
Cu
0.015
27
31
3.5
1.0
Coldworked
alloys of
types 4c,
4d and 4e
Temperature,
F max.
450
Partial
pressure,
H2S, PH2S
psi max.
30
425
100
400
150
350
200
270
See
"Remarks"
column
38AUGUST 2014/WorldOil.com
Chloride
pH
conc.,
mg/l,
max.
See "Remarks" See
column
"Remarks"
column
See "Remarks" See
column
"Remarks"
column
See "Remarks" See
column
"Remarks"
column
See "Remarks" See
column
"Remarks"
column
See "Remarks" See
column
"Remarks"
column
LABORATORY TEST
ARE
YOU
Q2?
WERE OPEN FOR BUSINESS!
API Spec Q2 Quality Management
for Service Supply Organizations
lets the industry know youre API
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Visit us at Rio Oil & Gas 2014,
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PERFORMANCE COMPARISON
psi
1,000
Corrosion
PH2S
100
No corrosion
10
1
5% NaCl
0.1
100
200
300
Temperature, F
15% NaCl
Failure
Pitting, no failure
No corrosion, attack
400
500
600
40AUGUST 2014/WorldOil.com
SBU140046 WO 7x4_8.indd 1
7/15/14 4:32 PM
Sanicro 28
(pH 2.5) no failure
10
Failure
No failure
PH2S, psi
CONCLUSIONS
Sandvik SAF 2205
(pH 2.5)
0.1
0.01
Failure
0.001
13Cr
(pH 3.9-5.0)
No failure
0
10
100
1,000
NaCl, ppm
10,000
100,000
Test results in accordance with ISO guidelines show that replacement Sanicro 28 tubing exhibits extremely high corrosion
resistance in strong acids, along with very good resistance to SCC
and intergranular corrosion in various environments, particularly
those where H2S is present, together with chlorides.
The materials key qualities are a higher resistance to stress corrosion, and a resistance to sulfuric acid corrosion that is superior
to traditional AISI materials. Sanicro 28, therefore, offers superior
corrosion resistance in seawater-cooled, chloride-bearing cooling
water with greater resistance to low temperatures. For these reasons, Sanicro 28 is the best-suited material to withstand prevailing conditions in deepwater offshore fields and sour wells.
Das Additiv
Simply safe.
k-Drill is a high performance product range. It is primarily used to prepare brines for drill-in,
completion and work over fluids. A strong package of German quality products combined with
reliable service. For successful drilling.
k-Drill C6
k-Drill C9
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k-Drill S9
k-Drill M
89 REASONS
TO CHOOSE K & B
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MANUFACTURING
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Miki Knight, Brian Chiasson, Edwin Nolan, Gregg Babin, Gary Sandusky, Perla Lara, Reginald Fanguy,
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Clarence McFarland, Bruce Whatley, Terry Yawn, Keith Dupre, C.J. Cunningham, Ashley Nelson, Clinton Meyer,
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Donna Carter, Andrew LeBoeuf, Neal Bollinger, Dylan Authement, Lisa Alfred, Gabriel Gonzalez, David Ponville,
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Houma, Louisiana
985.868.6730
Montoursville, Pennsylvania
570.368.3111
Houston, Texas
281.456.5600
A newly developed,
11-in., expandable liner
hanger packer (ELHP) system
made it possible to overcome
the challenges of drilling Saudi
Aramcos rst deepwater well,
a rank wildcat in the Red Sea.
Because the well was a rank wildcat, offset well information was nonexistent, and
data from shelf wells drilled in the 1960s
were insufficient for informed decisionmaking on temperature and pressure regimes. Formation tops and pressure predictions were based on a pre-drill analysis,
carried out on the basis of 3D seismic surveys. The presence of a massive Mansiyah
evaporite salt bed was expected. Seabed
geophysical analysis, 3D wide-azimuth
seismic, and high-definition bathymetric
surveys predicted several scenarios, that
indicated a very soft seabed, varying estimates of the top and base of the salt layer,
and different pressure trends, depending
on the formation sequence below the salt.
The project team was confident about
the post-salt formation tops and salt thickness and, as a result, developed a successful well design and drilling strategy to the
base of the salt layer. However, the pre-salt
environment was less discernible. It is beWorld Oil/AUGUST 201443
060
70
80
130
140
Casing design
150
Waterbottom
2,000
L.E.S.
4,000
6,000
2,450 ft MD
Massive Mobile Salt
Depth, fbsl
8,000
26 in.
Estimated RT-seabed-2,95 ft/
water depth-2,050 ft
20 in.
Jet 36-in. conductor pipe
3,500 ft MD
4,890 ft MD
10,690 ft MD
10,000
12,000
14,000
16,000
OBG
18,000
PPG
FPG
20,000
11,950 ft MD
sea test strings for production test flowrates. Additionally, the thick-walled casing, inherent to sour service-rated tubulars
and high production pressures, above and
across reservoir sections, required a system
that would not be compromised and not
be burst- or collapse-limited within structural and geometric constraints.
The deepwater well was planned with
five strings of casing below the 18-in.
high-pressure housing, to which the 18in. casing was attached. As is the practice
in casing design exercises, seismic-derived
PP and FG for shale and derived FG for
permeable intervals were used to identify
casing points.
To reach the proposed bottomhole
depth, the wellpath was expected to traverse a normal PP-FG trend to the top of
salt (ToS), an unknown length of rubble
zone subtending a massive salt section,
regression of trend at base of salt (BoS),
andat the time of well planningthree
divergent PP pathways that included
a total reversal to below hydrostatic
trend, if kerogens were present in the
deeper formations.
The marked inflection/regression in
the PP-FG suggested the need to use a
strong 14-in. casing with a 12.213-in. drift
to straddle the salt interval and the farthest
extent of the rubble zone. The geometric
constraint posed by this drift required an
uncompromising technical solution. Not
knowing what further challenges might exist below the PP-FG regression, the ELHP
offered the technical and deployment attributes to exceed the required hang-off
capacity and isolation integrity desired.
The 11-in. ELHP system was planned
as a contingency string, primarily to extend isolation of the rubble zone below
the salt, should the 14-in. intermediate
casing be short-landed. For the unknown
length of the rubble zone, the planned
11-in. ELHP contingency string could
preserve the use of the preferred 9-in.
high-collapse casing size across the upper reservoir section. The project team
believed that using the next casing size at
this depth9 in.may have presented
through-borehole restrictions, should it
become necessary to call for the casing
point before reaching or traversing the reservoir sections.
ELHP TECHNICAL DETAILS
www.exprogroup.com
Expro Burner/Booms:
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DEFINING POSSIBLE
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Fax: 281-822-3401
48AUGUST 2014/WorldOil.com
Bbl
DRILLING PRODUCTS & SERVICES | ONSHORE COMPLETION & WORKOVER SERVICES | PRODUCTION SERVICES | SUBSEA & TECHNICAL SOLUTIONS
Since 1942
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50AUGUST 2014/WorldOil.com
duced from 5 to 25 min. per stand, to manage surge and piston effects of the 11-in.
liner in the 12.213-in. drift of the 14-in.
casing. With the liner string at the 14-in.
casing shoe, one liner volume of mud was
circulated at 400 gpm.
After a second weight check, 510,000 lb
of pick-up weight and 500,000 lb of slackoff weight were recorded. It was decided
not to rotate the liner string, and tripping
proceeded into the 14-in. underreamed
open hole.
Three stands before reaching TD, a 1in. ball was dropped and chased with 2-bpm
mud, to help it reach the float collar and convert from autofill to conventional. A final
weight check recorded pick-up of 530,000 lb
and slack-off of 520,000 lb. The space-out of
the liner string was carried out with depths
tide-corrected to ensure location of the liner
shoe at the required depth of 11,950 ft. The
packer element was placed, as close as possible, in the middle of a casing joint.
Pumps were activated to clear flow bypass areas and move fluid around the liner.
While circulating, returns were monitored
continuously to ensure that bridging in the
annulus would be detected promptly, should
it occur. Cementing lines were aligned and
flushed, while circulating to, further condition the hole and the mud. With circulation
completed, the 11-in. liner guide shoe
was placed at 11,950 ft, and the 2-in. OD
hanger setting ball was released.
Approximately 34 min. after being
launched, a slight pressure indication on
surface confirmed that the setting ball had
landed on the ball seat. Pressure was gradually applied to 3,500 psi, then to 4,300 psi,
and finally to 4,750 psi. The running tool
was released automatically from the liner,
and the hanger was set.
After cementing, the stroker was lowered into reset position, and the anchor
was set. Pressure was brought up to 3,500
psi. Collet release was observed at 2,800
psi, and stroke action began downhole,
with pressure rising to 4,800 psi, to indicate that the packer expansion process was
complete. Setting pressure was held at the
running tool for 30 sec, to allow the tool to
complete the second full stroke, Fig. 4.
PROJECT SUCCESS
For more than 40 years we have delivered complete excellence to our customers.
Now we are delivering it worldwide. The highest quality equipment, the most
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www.knightoiltools.com
also hamstrung by the White Houses refusal to approve construction of the Keystone XL Pipeline, and must deal with a
growing anti-fracing movement within a
certain segment of the U.S population.
Nevertheless, the upstream industry is
acquitting itself wellboosting drilling,
increasing reserves and growing U.S. production. Remarkably, U.S. oil production
is running at least 15% higher than at the
same time last year, exceeding 8.1 MMbpd.
For the remainder of 2014, World
Oils forecast (Table 1) includes these
highlights:
U.S. drilling will rise 9.9%, from
22,974 wells in first-half 2014 to
25,256 in the second half
On a year-to-year basis, U.S. drilling
will increase 3.9% to 48,230 wells in
2014, from 46,405 wells in 2013; this
compares to our original 2014 forecast of 45,834 wells
The amount of U.S. footage drilled
will increase 9.8%, to 208.8 MMft of
hole in second-half 2014, from 190.3
MMft in the first half. Furthermore,
year-on-year footage drilled will gain
6.5%, to a near-record 399.1 MMft.
Given recent gains and a general
trend upward, it is conceivable that
the U.S. rig count will hit the 2,000
mark before the end of the year and
remain at that level for several weeks
Continued use of pad drilling and
further efficiency gains are resulting
in a factory-type process, whereby
E&P companies are becoming immune to flat commodity prices.
World Oils own proprietary surveys of
major drillers, and small- and mediumsized independents, support these findings. Among 14 major drillers (Table 2),
activity will increase 23.7% from first-half
2014 to the second half. These operators
will also devote 74.9% of their drilling to
oil projects during the full year. Among
the smaller 75 independents, they plan
1,508 wells, of which 56.7% will be drilled
in the second half. Within that total, 1,308
wells, or 86.7%, will be oil-directed. In all,
World Oil/AUGUST 201453
Second
half
70
75
12
490
1,695
31
1,003
207
387
131
2,885
461
587
403
184
57
127
83
95
810
73
1,249
468
1,821
1,247
8
66
9,202
1,572
658
445
324
172
234
362
1,102
2,995
510
420
408
577
58
331
626
324
25,256
Year
130
153
19
730
3,266
66
1,904
345
703
229
5,855
1,001
1,138
797
341
108
259
165
179
1,461
103
2,379
851
3,457
2,276
14
115
17,986
3,180
1,274
856
657
330
451
723
2,001
5,822
990
942
760
994
121
602
1,133
488
48,230
% difference,
1st half vs.
2nd half
16.7
3.8
71.4
104.2
7.9
11.4
11.3
50.0
22.5
33.7
2.9
14.6
6.5
2.3
17.2
11.8
3.8
1.2
13.1
24.4
143.3
10.5
22.2
11.3
21.2
33.3
34.7
4.8
2.2
6.8
8.3
2.7
8.9
7.8
0.3
22.6
5.9
6.3
19.5
15.9
38.4
7.9
22.1
23.5
97.6
9.9
First
half
432.0
507.0
64.5
1,987.2
3,809.7
175.0
10,200.0
1,518.0
726.8
215.6
8,019.0
1,512.0
3,822.1
2,338.4
1,483.7
188.7
1,155.0
975.8
390.6
5,663.7
49.5
21,040.6
3,868.3
15,378.4
7,923.3
18.6
107.8
89,366.9
19,778.4
9,240.0
3,781.2
3,729.6
1,809.1
2,604.0
1,642.6
9,484.5
26,291.1
3,024.0
3,758.4
4,224.0
3,294.3
182.7
2,574.5
5,019.3
96.0
190,282.9
Second
half
525.0
457.5
198.0
4,062.1
3,771.4
170.5
10,300.0
2,173.5
890.1
288.2
7,789.5
1,383.0
4,022.1
2,297.1
1,725.0
228.0
1,111.3
1,004.3
389.5
7,047.0
124.1
23,331.3
4,726.8
17,481.6
9,352.5
110.0
145.2
93,918.9
19,021.2
9,548.0
4,361.0
3,726.0
1,978.0
2,854.8
1,607.3
11,901.6
27,763.7
3,238.5
2,982.0
4,936.8
4,558.3
168.2
3,144.5
5,759.2
205.2
208,836.8
Year
957.0
964.5
262.5
6,049.3
7,581.1
345.5
20,500.0
3,691.5
1,616.9
503.8
15,808.5
2,895.0
7,844.2
4,635.5
3,208.7
416.7
2,266.3
1,980.1
780.1
12,710.7
173.6
44,371.9
8,595.1
32,860.0
17,275.8
128.6
253.0
183,285.8
38,799.6
18,788.0
8,142.2
7,455.6
3,787.1
5,458.8
3,249.9
21,386.1
54,054.8
6,262.5
6,740.4
9,160.8
7,852.6
350.9
5,719.0
10,778.5
301.2
399,119.7
2013
wells4
165
145
18
807
3,140
78
1,845
315
764
245
5,612
751
1,176
865
311
153
256
226
155
1,280
144
2,175
696
3,215
2,245
22
125
17,162
3,228
1,233
693
669
437
375
816
1,696
5,128
987
1,135
765
988
130
565
1,165
642
46,405
2013
footage,
1,000 ft4
1,039.5
841.0
288.0
6,536.7
7,441.8
312.0
17,896.5
3,386.3
1,719.0
558.6
15,152.7
1,577.1
7,509.8
4,679.7
2,830.1
550.8
2,176.0
2,621.6
683.3
11,041.3
239.0
42,294.2
7,029.4
30,221.0
17,286.5
276.6
262.5
171,579.4
38,122.2
18,479.5
5,886.0
7,405.5
4,948.2
4,191.7
3,606.6
17,897.0
47,442.0
6,174.0
8,274.3
9,152.4
7,953.4
370.5
5,085.0
10,485.0
310.7
374,725.2
1 Excludes
3
Total
Arkansas
215
California-onshore 1,005
Colorado
136
Gulf of Mexico
19
Kansas
40
Louisiana
54
North
29
South
25
Mississippi-onshore
22
Montana
27
New Mexico
100
North/West
14
South/East
86
North Dakota
323
Ohio
3
Oklahoma
119
Pennsylvania
155
South Dakota
2
Texas
1,049
District 1
96
District 2
238
District 3
46
District 4
1
District 5
0
District 6
3
District 7B
0
District 7C
162
District 8
395
District 8A
35
District 9
0
District 10
73
Utah
190
West Virginia
0
Wyoming
25
U.S. Totals
3,484
1 Major
Wild
cat
0
0
5
4
0
4
4
0
0
3
2
1
1
22
3
24
6
0
25
0
0
0
0
0
0
0
4
11
3
0
7
0
0
0
98
Wells to be drilled
2nd half
Field
Total
215
1,005
131
15
40
50
25
25
22
24
98
13
85
301
0
95
149
2
1,024
96
238
46
1
0
3
0
158
384
32
0
66
190
0
25
3,386
449
1,130
149
34
40
38
26
12
11
25
156
15
141
426
0
252
148
0
1,217
100
278
70
1
0
0
0
209
384
52
0
123
193
12
28
4,308
Wild
cat
0
0
7
5
0
4
4
0
0
3
2
1
1
35
0
47
5
0
18
0
0
3
0
0
0
0
0
7
1
0
7
0
1
0
127
Field
449
1,130
142
29
40
34
22
12
11
22
154
14
140
391
0
205
143
0
1,199
100
278
67
1
0
0
0
209
377
51
0
116
193
11
28
4,181
Horizontal
wells
1st
half
215
104
102
0
0
22
22
0
0
24
28
10
18
315
3
119
154
2
601
96
238
18
0
0
3
0
73
99
4
0
70
110
0
1
1,800
2nd
half
449
74
105
0
0
16
16
0
0
24
51
12
39
420
0
252
148
0
776
100
278
42
0
0
0
0
92
132
9
0
123
110
12
5
2,442
Oil Wells
1st
half
0
911
56
16
0
28
4
24
20
27
97
12
85
322
0
71
13
2
931
79
188
45
1
0
3
0
146
392
35
0
42
190
0
7
2,691
Gas Wells
2nd
half
0
1,062
59
27
0
14
7
7
11
25
147
13
134
425
0
147
15
0
1,012
86
215
61
0
0
0
0
168
358
52
0
72
193
0
12
3,149
1st
half
215
94
80
3
40
26
25
1
2
0
3
2
1
1
3
48
142
0
118
17
50
1
0
0
0
0
16
3
0
0
31
0
0
18
793
2nd
half
449
68
90
7
40
24
19
5
0
0
9
2
7
1
0
105
133
0
205
14
63
9
1
0
0
0
41
26
0
0
51
0
12
16
1,159
Total footage
1st
half
2,070,144
2,229,046
1,224,000
201,097
124,000
570,018
443,318
126,700
178,800
487,683
733,149
135,800
597,349
6,525,650
41,329
2,110,964
1,722,029
37,033
12,965,957
1,600,858
4,257,040
483,042
8,000
0
42,552
0
1,617,090
3,833,902
91,473
0
1,032,000
1,254,226
0
299,200
32,774,325
2nd
half
4,323,232
2,573,576
1,341,000
266,591
124,000
424,990
350,490
74,500
73,550
469,083
1,719,653
145,500
1,574,153
8,782,505
0
4,544,421
1,621,420
0
13,619,060
1,583,827
4,986,297
882,400
5,500
0
0
0
1,175,170
3,053,015
211,300
0
1,721,551
1,248,347
165,312
317,000
41,613,740
drillers are integrated companies and large independents with signicant drilling programs in six or more states.
56AUGUST 2014/WorldOil.com
In Texas, the primary drivers of activity remain the Eagle Ford shale of
South Texas and the Permian basin of
West Texas. Drilling and development
in the Eagle Ford (Railroad Districts 1,
2 and 3) is running at capacity, hence the
combined number of wells forecast to be
drilled in the two primary districts1
and 2will be level with last year
at 4,454.
In the Permian basin (Districts 8,
8A and 7C), oil-directed drilling constitutes about 98% of all activity. In our
own proprietary survey of operators, a
cross-sectional group of five major drillers in District 8, along with another five
smaller independents, will drill 1,068
wells this year, of which 1,039, or 97%,
are oil-directed. This group also will increase activity 5% in second-half 2014.
Overall, we expect drilling to gain 5.9%
in District 8, 22.6% in District 7C (our
sample group up 23.5%) and 6.2% in
Flotek
Microsolutions
Technology
REDEFINING PERFORMANCE WITH
MICROSOLUTIONS TECHNOLOGY THROUGHOUT
THE LIFECYCLE OF THE WELL.
ENHANCES
E
NHANCES
PERMEABILITY
P
ERMEABILITY &
P
OROSITY OF
POROSITY
HYDROCARBONS
H
HY
YDROCARBONS
OPTIMIZES STRESS
CAGE STABILITY
INCREASES
INC
IIN
NC
N RE
EA
E
ASES
ES
ES
PRODUCTION
P
PRO
R DU
DU TI
DUC
TIO
ON
RATES
RA
RAT
ATE
ES
ES
403.719.9011 | BLUESPARKenergy.net
58AUGUST 2014/WorldOil.com
CANADA
DurabandNC
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1970 Wagner Moorehouse Drill Rig , 2001 Ingersol Rand Hydraulic Drill Rig Mdl #T3W, 1969 Gardner Denver Mechanical Drill Rig Mdl #15W, 1999 Semco
Hydraulic Pump Rig Mdl #58, 2001 Ingersol Rand Hydraulic Pump Rig Mdl #F250, 2004 Case Loader/Backhoe 4x4 Mdl #580, 1995 Case Loader 4x4 Mdl
#570-XLT, Ditch Witch Trencher Mdl #3500 DD, Toyota Forklift Mdl #5F040, Kubota Tractor, Montana 48x60 Tractor Mowing Attachment, 36 Rototillar
Attachment, 2005 Shop Made Semi Single Axel Mud Seperation System, 2012 Mud Puppy Seperation System Mdl #255-25C, Ingersol-Rand 115 KVA Gen
Set Trailer Mounted Generator, Cato 375 kw Trailer Mounted Gen Set Generator, Miller Gas Powered 225 amp Air Welder, (19) Trailers, (16) Trucks, Large
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60AUGUST 2014/WorldOil.com
2013 Wells
Onshore
6,397
568
537
0
1
0
4
0
18
0
3
3,376
1
10,905
Offshore
0
0
0
0
14
0
0
0
0
0
0
0
0
14
Total
7,000
602
600
0
12
0
1
0
18
0
4
3,275
0
11,512
2014 Wells
Onshore
7,000
602
600
0
2
0
1
0
18
0
4
3,275
0
11,502
Offshore
0
0
0
0
10
0
0
0
0
0
0
0
0
10
Hardbanding
Support
IMPROVING
STANDARDS
On-Site Training
for New
Applicators
Applicator Testing,
Qualification &
Licensing
SUPPORTING
END USERS
Educational
Technical Forums
Worldwide
Technical Support
www.hardbandingsolutions.com
hbs600@hardbandingsolutions.com
Fig. 2. The sale of Repsol stock valued at $2.95 billion will allow Pemex to invest money
in capital projects, such as work at Cantarell and Ku-Maloob-Zap elds, that would
otherwise be reduced or not occur at all.
DIRECT
MAILING
LISTS
The Source for Reliable Direct-Mail Lists in
the Energy Industry
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To learn more, contact
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email: linda.johnson30@gmail.com
62AUGUST 2014/WorldOil.com
Table 4. Under the reform package, Pemex has requested prospective resources equaling
34.5 Bbbl (table courtesy of Pemex).
rea, km2
Resources, Bboe
Shale
Deep water
Shallow water
Onshore
Total
13,163
46,413
35,928
65,471
160,975
8.9
8.1
9.5
8.0
34.5
Category
Resources, %
of accumulated production
15%
29%
63%
82%
31%
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UNCONVENTIONAL RESOURCES
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UNCONVENTIONAL RESOURCES
eration. The MFCS successfully calculated and adjusted accurate ECD values
throughout the drilling profile of the
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Fig. 2. MPD provides additional value for
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RESULTS
The thorough upfront planning between Suncor and Weatherford was instrumental to a successful MPD operation in this SAGD well. A total of 2,350
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Through the use of the MFCS,
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UNCONVENTIONAL RESOURCES
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SAND CONTROL
In 1996, GDF SUEZ drilled the B1 exploration well in the K9ab-B Rotliegend
(or K9) field in The Netherlands sector of
the North Sea (Fig. 2), discovering natural
gas. A year later, the B2 appraisal well was
drilled in another fault block. After the
production platform was installed, both
wells were re-entered and completed. Production began in 1999. Several years later,
two additional wellsB3 and B4were
World Oil/AUGUST 201471
SAND CONTROL
Fig. 1. Due to severe sanding, two of the K9 elds four wells were shut in, reducing total gas production 75%. Following sand prediction
and remediation, production rates returned to the elds previous highest levels, sand-free.
2,000
Sand prediction
and remediation
1,600
1,200
800
400
Jan. 05
July 05
Jan. 06
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July 06
Jan. 07
July 07
July 08
Jan. 09
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SAND CONTROL
Data
collection
Data
correction
Data audit
Mechanical
stratigraphy
Elastic
moduli
Rock
strength
Pore
pressure
Pore pressure
from MDT, DST
Overburden
stress
Sand
management
advisor
Yes
Multi-arms caliper
borehole image
Calibration
and validation
Failure
match
Stress
direction
Horizontal
stresses
No
Failure
74AUGUST 2014/WorldOil.com
Safe
in computing and
calibrating rock
strength and the
2,000
state and direction
90 orientation
of stresses acting
on the reservoir.
1,600
Third, sand failure analysis and
prediction is conducted routinely
1,200
Gas
and
presented
layer-by-layer
within the reser800
voir, rather than
at just one representative location.
Gas and sand
Finally, the model
400
incorporates two
important components of sand fail0
0
400
800
1,200
1,600
2,000
ure: perforation
Reservoir pressure, psi
diameter and grain
size. Both have a
entire reservoir exhibits the same stress quantifiable effect on perforation stability.
state and rock strength. Conclusions and
recommendations based on limited mod- K9 SAND PREDICTIONS AND
els may prove erroneous, and more costly RECOMMENDATIONS
in the long term.
Sand failure analysis of the K9 reserThe SMA sand prediction model is voir depended on careful construction of
unique in several ways. First, although a mechanical earth model (MEM), which
the software is technically sophisticated, quantified the key properties that govern
it is simple and easy to apply to any con- deformation and failureYoung Modulus,
solidated sand reservoir. Second, in build- Poissons Ratio, Unconfined Compressive
ing a truly comprehensive geomechanical Strength (UCS), internal friction angle,
model, equal amounts of time are invested grain size and tensile strength. The MEM
also incorporated pore pressure, overburden stress, and the magnitude and direction of the horizontal stresses. At each step
of the workflow (Fig. 3), laboratory tests,
core data from the B2 wellthe only well
with core samplesand correlations with
log data were used to constrain and calibrate mechanical properties. Then sanding
evaluations were conducted in the producing sections of all four wells in the field using the calibrated MEM.
A typical sand prediction for a problematic point within the K9 reservoir
(Fig. 4) plots bottomhole flowing pressurecontrolled by choke size at the surfaceagainst reservoir pressure, which
declines with production. The difference
between these two represents the drawdown pressure. When bottomhole pressure (BHP) is greater than reservoir pressure at the selected depth, the well cannot
produce at all. When BHP is less than
reservoir pressure, the well will produce
sand-free, only when the drawdown pressure remains within a specified safe zone,
which can be maintained by choking. If
the drawdown pressure exceeds a critical
limit, then sand failure will occur. Sand
failure intervals can be predicted at multiple depths along a continuous well profile, and these predictions can be made at
different reservoir pressures.
Geomechanical and sand prediction modeling in the K9 field accurately
matched key events at various times in
the sanding history of both abandoned
wells. One of the most important findings was that a single thin layer with low
rock strength appeared to be the major
contributor to overall sand production
in both wellbores. The majority of other
intervals within the reservoir remained
relatively stable. However, modeling
also predicted that failure would become
likely in additional layers having even
higher rock strength as the field continues to deplete. The study identified the
zones of greatest risk.
To assess the validity of the sand prediction model, a downhole sand detection
tool was run in wells B1, B2 and B3. The
tool identified zones that were actually
producing sand, and these zones exhibited a good match with the predicted zones,
Fig. 5. As predicted, one thin interval was
the primary source of sand failure. As a
result, the study proceeded to investigate
and recommend specific ways of isolating
that zone and improving completion designs to achieve economic, sand-free pro-
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SAND CONTROL
P
Depth, e
m r
f
Flow
Flow %
Flow %
Rock strength
Downhole
Sand failure sand detection
prediction
Unconned
High
compressive Low
strength
Low
High Low
High
X,600
X,610
X,620
X,630
X,640
In the B1 well, the safest way to ensure sand-free production was to design
a screenless completion with selective,
oriented perforations, avoiding any weak
zones with a UCS below a specified value.
However, because the well was vertical,
oriented perforations would not be effective, as many orienting techniques rely on
gravity and the wells deviation to achieve
the desired orientation. Whats more, the
existing completion made the reservoir
interval inaccessible. The well was side76AUGUST 2014/WorldOil.com
tracked at the optimal azimuth and deviation indicated by the study. Although the
best solution for an oriented perforation
would have been horizontal, due to operational limitations the well was sidetracked
at 50 inclination. After casing, new data
were acquired, a petrophysical analysis was
carried out, and the geomechanical model
was updated. Sanding analysis on the revised model identified the safe interval,
the perforation diameter was optimized
for sand-free production, and the zone was
perforated with oriented guns at an angle
of 10- to 15-phasing. This type of oriented perforation allows a greater shot density
by reducing the risk of interference and
collapse between perforations and damage
to casing. Well test performance was significantly better than the original B1 well,
without producing any sand.
Because the reservoir section remained
accessible in the other three wells, casedhole gravel pack completions with screens
were designed for B2, B3 and B4. Following remedial work, the wells were started
up slowly, and later production tested.
Since June 2008, all four wells have
been producing sand-free at economic
rates again. Indeed, production rates quickly returned to the fields previous highest
levels (see Fig. 1), effectively recovering
the 75% total gas production lost due to severe sanding. Had the K9 fields mechanical rock properties and stresses been better
understood at an earlier stage of development, it might have been possible to avoid
the sand production problem altogether.
Given the nominal cost of the study
relative to its ultimate economic value,
this type of geomechanical analysis has
become standard practice for GDF SUEZ.
In addition, for new fields the company
often conducts this type of analysis much
earlier in the development process. After
drilling the first well in a field, if core analysis indicates a potential sanding problem, a proper geomechanical study will
be conducted before drilling additional
wells. This information facilitates the optimal placement of wells and selection of
completions under various production
and injection scenarios. In one oil field,
for example, where produced water injection was planned, laboratory testing and
the sand prediction study indicated that
the reservoir interval could produce sandfree with oriented perforations. However,
a different type of completion was necessary to prevent sand failure in the deeper
interval chosen for injection.
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REGIONAL REPORT
WEST AFRICA
Identication of potential pre-salt basins and improved deepwater technologies
leads to targeted licensing rounds, as several countries strive to participate
and boost activity in these frontier plays.
LAURA WHITE and ARRAN WATERMAN, Deloittes Petroleum Services Group
Since the discovery of large pre-salt
fields offshore Brazil, explorers have identified analogous basins offshore West Africa
as having pre-salt potential. In recent years,
countries, such as Angola, Gabon, Congo
and Namibia, have geared up for pre-salt
exploration in their deepwater areas. Presalt-focused rounds have encouraged the
industry to participate in these frontier
plays, as have improvements in imaging
techniques and deepwater technologies.
REGIONAL OVERVIEW
The two-year-old SSV Catarina semisubmersible is drilling pre-salt exploration wells offshore Angola for Cobalt International Energy (photo courtesy of Cobalt); Eni has been
operating in Congo since 1968, and now produces from a variety of conventional offshore elds like the facility pictured. Eni also operates the Marine XII Block, where it struck
a 1.2-Bbbl pre-salt discovery in shallow water; Chariot Oil & Gas contracted the Maersk Deliverer drillship to test the Tapir South pre-salt prospect in the Namibe basin of
Namibia. Although the well failed to nd commercial resources, Chariot has been able to identify follow-on prospects (photo courtesy of Maersk Drilling).
78AUGUST 2014/WorldOil.com
Operator
2014 Pre-salt
exploration wells
2015 Pre-salt
exploration wells
19
BP Plc
1 well (Puma)
1 well
24
BP Plc
Cobalt
1 well Q2
(Loengo)
20
Cobalt
1 well Q4
(Golnho)*
21
Cobalt
1 well Q4
(Mupa)
36
ConocoPhillips
1 well Q2 (Kamoxi)
1 well
35
ConocoPhillips
1 well Q4 (Crux)
1 well
35
Eni Spa
1 well Q1 (Ombovo)
22
Repsol S.A.
1 well Q2-Q3
(Locosso)*
1 well
38
Statoil ASA
1 well Q2 (Dilolo)
12 wells**
2 wells
2 wells (Kakonga,
Champlain)
Statoil ASA
1 well Q4
25
Total SA
1 well Q3
80AUGUST 2014/WorldOil.com
Seab
Seabed
Top Miocene
M
Top Oligocene
T
O
Top Cretaceous
Top Albian
Top Salt
Base Salt
Congo
River
CONGO MEGASURVEY
Closing a Data Gap
In association with the SNPC, over 20,000 sq km of matched and merged 3D and
4000 km of 2D are available now. The petroleum system present in the Congo
offshore area contains both source and reservoir potential.
YASMIN DESTE Tel: +44 1932 376365 yasmin.deste@pgs.com
SERGEY PALENOV Tel: +44 1932 376903 sergey.palenov@pgs.com
A Clearer Image
www.pgs.com
MultiClient
Marine Contract
Imaging & Engineering
Operations
Dont Miss
Early Bird
Savings
Register by August 26
and Save!
Keynote:
Gregory Walz
Senior Drilling
Engineering Advisor
Anadarko Petroleum Corporation
Chris Hartley
Global Strategic
Projects Director
Weatherford
Harry Dearing
Vice PresidentTechnology Marketing
Newpark Drilling Fluids
Jueren Xie
Senior Engineering Advisor,
Drilling and Completions
C-FER Technologies Inc
Kyriacos Agapiou
Senior Scientist
Halliburton
Michael Williams
Subsea trees
Controls, risers and owlines
Equipment design, development
and implementation
Sealing technology (metallic and nonmetallic)
And more
Developed by our esteemed advisory board, the 2014 conference program features top professionals at
leading companies including: Baker Hughes, Clariant, C-FER Technologies Inc, Chevron, Enventure Global
Technology, FMC Technologies, Halliburton, High Performance Tubular Technology, Newpark Drilling Fluids,
Pemex, Schlumberger, Siemens Industry Inc, Special Metals Corporation, Weatherford and more.
Opening Reception Sponsor:
Exhibitors:
HPHTConference.com
TRACK 2: COMPLETIONS
Session 1: Fluids
Session 2: Tubulars/Connections/
Sealing Technology
Metal sealing A scientic approach to seal design
and qualication Craig Hendrie, Plexus Holdings plc.
LUNCH
Session 3: Equipment
Session 4: Equipment
COFFEE BREAK
Session 5: Regulations
Panel Discussion: Regulations: The Saga continues
CLOSING REMARKS
Opening Reception: Sponsored by Anadarko Petroleum
Dont Miss
Early Bird
Savings
Register by August 26
and Save!
TRACK 2: COMPLETIONS
Session 7: Cementing
LUNCH
Session 8: LWD & MWD
Session 9: Testing
COFFEE BREAK
Session 10: Reliability And Service Life
Reliability-based design assessment for tubular connection sealability in HPHT Well Applications
Jueren Xie, C-FER Technologies Inc.
Application of nite element analysis to fatigue life and fracture mechanics in HPHT. Sam Lee, FMC Technologies
CLOSING REMARKS
HPHTConference.com
Take Advantage of our Best Rates with Early Bird Registration by August 26
Discounted Price
(by August 26)
Regular
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Introducing
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LET'S WORK.
2013 Scott Safety. SCOTT, the SCOTT SAFETY Logo and Scott Health and Safety are registered and/or unregistered marks of Scott Technologies, Inc. or its afliates.
No industry knows security like the energy industry. Many oil and gas operators
have vast security departments, extensive
procedures and private intelligence firms to
help them react to whatever threats emerge
from the environment. But how smart is
this type of security? More importantly, how
much money is being wasted on infrastructure and personnel investments that may
not be yielding true benefit?
The Chinese military strategist and philosopher Sun Tzu said that the supreme
art of war is to win without fighting. The
successful warrior wins first and then goes
to war, while the defeated goes to war and
then tries to win.
In the realm of operational security,
this suggests that you can put up all the
barbed wire you like, but, in the end, this
will only result in escalating cost and the
deterioration of good-will, as the community will interpret hard security as
exclusive and threatening. Maintain an
inappropriately weak reactive security
posture, and your operation is at risk from
security threats. Maintain an inappropriately high reactive security posture, and
your operation risks alienating local communities. Smart security is the appropriate level, and that has to be based on a
deep understanding of the human terrain
surrounding the operation.
The only way to achieve smart security,
and to reduce these costs and triggers of
conflict, is to do the necessary mapping of
the human terrain, and to make sure that
everyone on the team, ex-pats and locals
alike, are acting from the same deep understanding of who, and what, lies outside the
wire. If done properly, it may even make
the wire irrelevant.
World Oil/AUGUST 201485
EAGLE FORD/PEARSALL
As currently delineated, the Eagle Ford fairway underlies some 32 South Texas counties, stretching all
the way to the states southernmost border, Fig. 1.
Today, the eastward expansion is in full throttle, and
while the play is generally linked with the underlying Pearsall shale, the trend is moving more toward
exploring the co-development potential of the overlying and heavily explored Austin Chalk, and the
upper and lower benches of the Eagle Ford.
To the south, U.S. companies are taking a waitand-see approach on the prospects for the swatch of
the Eagle Ford that extends beyond the border. For
the time being, they are content to play the waiting
game until they see the final shape of Mexicos new
energy reform policy, and if any positive efforts will
be made to curb the illegal drug violence that has
ensnared the southern neighbor. BHP Billiton, for
one, is in no hurry to line up rigs and test the feasibility of expanding its self-described trophy asset
across the border. We think Mexico is probably going to go slower rather than faster, says Rod Skaufel,
90AUGUST 2014/WorldOil.com
Safer
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The all new, much safer ECOmat. Thats the mark of Tiger.
Make your drilling or frac site a more sure-footed operation, with Tiger ECOmats.
Theyre loaded with safety features, including a high-traction surface that keeps
your people and equipment from slipping. Plus they help you protect the environment
because they wont absorb chemicals or biodegrade over time. Heavy-duty synthetic
ECOmats are lighter than wood, compact and easy to transport and install, yet they
are much stronger and last longer than wood mats. In short, they eliminate the many
problems of wood and composite options. Put a safer, cleaner, smarter foundation
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Patent Pending Copyright 2014 Modern Group Inc. All rights reserved
Fig. 3. Most recent oil (left) and gas production data from the Eagle Ford.
5,000
838,293
717,953
750,000
500,000
403,999
250,000
129,795
0
352
843
15,149
2008
2009
2010
92AUGUST 2014/WorldOil.com
2011
2012
2013
Jan.-April 2014
1,000,000
B
3,779
4,000
3,000
3,588
2,587
2,000
1,232
1,000
0
2
2008
52
2009
322
2010
2011
2012
2013
Jan.-April 2014
94AUGUST 2014/WorldOil.com
WERE READY
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96AUGUST 2014/WorldOil.com
The Revolution RSS point-the-bit system works by producing a controllable steering tilt angle through a biasing unit
that points the bit in the desired direction, using a specially
profiled stabilizer as a fulcrum.
Proportional control continuously controls bit tilt,
which enables the drilling of a smooth, consistent hole curvature. The control avoids cycling the steering mechanism
on and off to produce the required dogleg severity. For example, if a 5/100 ft build rate is desired, the RSS is set for
5/100 ft, rather than building at 10/100 ft for half the time
and drilling straight for the other half (or some other mark/
space ratio).
Automatic drilling modes are used to assist the operation
and are particularly useful when drilling the vertical and horizontal sections. These modesseek vertical, hold inclination
(lateral/tangent), and autopilot (for 2D and 3D directional
control)save time by removing the need to constantly communicate to the RSS. The closed loop control system continuously monitors sensors and makes decisions to keep the
wellbore on track.
Drilling hazard mitigation is addressed in a holistic approach to the BHA design that considers bit selection, LWD,
and power section options to optimize the assembly for the
application. As with all rotary steerable systems, continuous
rotation of the drillstring enhances hole cleaning, which clearly reduces the risks of getting stuck. Similarly, near-bit directional measurements are continuously monitored to reduce
the risks of not meeting the well placement requirements.
Eagle Ford applications. In a series of four wells on a
pad location, curve and lateral sections were drilled in a single trip using the RSS assembly. Importantly, dogleg severity
and tortuosity in the lateral section were minimized to improve casing running and logging. Drilling operations were
faster in all four wells, with one drilled 43% quicker than estimated to save 7.5 days of drilling time. In each of the wells,
the drilling path closely matched the planned well path. The
wells were drilled uneventfully, and casing was successfully
run to TD with no issues.
The system drilled an 8-in. hole from the kickoff point
to TD, building an 8 curve and continuing the lateral section
to an average MD of 17,300 ft. Rate of penetration in the long
lateral section, where motor systems typically have trouble, averaged 104 ft/hr. While drilling, the RSS and HEL LWD system continuously monitored downhole vibrations, including
stick-slip, whirl, and lateral and axial torsional dynamics. The
information was used to adjust drilling parameters to optimize
performance in difficult sections of the Austin Chalk and Anacacho formations directly overlying the Eagle Ford.
In another Eagle Ford application, the RSS was used to
drill all three sections of an extended 2D J-type well in a single
run of nearly 12,000 ft.
The ROP was 75% faster than conventional steerable motor assemblies and resulted in the fastest well drilled in the
Eagle Ford shale. The well was completed seven days ahead of
plan, saving the operator approximately $700,000.
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Fig. 5. One of the 10 rigs drilling for Anadarko in the Eagle Ford (photo courtesy of Anadarko
Petroleum Corp).
98AUGUST 2014/WorldOil.com
After unloading what it considered noncore East Texas assets, Halcn Resources
now controls some 100,000 net acres prospective for the eastern Eagle Ford. In the
first quarter, the independent ran four rigs,
on average, to exploit El Halcn field, where
production averaged 7,018 boed. In its
earnings release, Halcn said much of the
focal point is optimizing well spacing and
completion designs to bring down development costs. Based on results from step-out
wells drilled to the south, combined with
results from other offset operators, we believe our entire acreage position has been
de-risked, and results are expected to be repeatable, Halcn said in a statement.
Permian basin fixture Clayton Williams Energy controls 185,000 net acres
in the Giddings area of East Texas, where
it has been active since the early 1990s.
While its holdings are prospective for
the Austin Chalk, Eagle Ford, Buda and
Georgetown formations, the independent
said the Eagle Ford is the primary target
for its current two-to-three-rig drilling
program. With 2013 proved reserves of
15.5 MMboe, the acreage produced an
average 4,734 boed in the first quarter.
Meanwhile, two-year-old Denver operator Hawkwood Energy LLC, on July
1, said it acquired East Texas acreage in
two deals that, to date, have produced an
aggregate 1,800 bopd. While no details
were made available, Hawkwood said the
combined assets it acquired separately
from Crimson Energy Partners III and
Encana include some 50,000 generally
contiguous undeveloped acres spread out
in Brazos, Leon, Madison and Robertson
counties. These assets establish the company as a significant player in the emerging
Eagle Ford and Woodbine plays in East
Texas, Hawkwood said in a statement.
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Todays extended reach wells come with a whole new set of challenges. More than
ever, you need a centralization solution that wont let you down. Volants Centralization
Solution combines the rugged dependability of our HydroFORM Centralizers with
our proprietary centralizer optimization strategy. Every application is different and
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solution precisely engineered for each and every liner or casing run, no matter what
the challenges. No matter how far you need to go.
ultimate recovery) by 20%60%, with improved vertical coverage and frac conductivity.
Today, BHP has extended that scientifically oriented approach to all four of its onshore unconventional plays, including
the Eagle Ford. There, improving proppant placement and frac
geometry are just two elements in a multi-component completion and frac evaluation, which includes both numerical and
analytical modeling with diagnostics validation, directed at optimizing completion designs.
We hear a lot of discussion about IP (initial production)
rates, but IP is not the game. A sustainable rate is the game. In
shale, you need to be relentless at this, he said. Were a technical company, and we believe technology drives innovation,
innovation drives performance, and thats what were all about.
Theres some really high-end technical work being done in our
teams, and Im very proud of the technical aspects of the work
that we do.
The technology-centric focus is reflected in its studied and
BHP admitsmore expensive approach to its frac and completion programs, an approach that the company says is starting
to pay significant dividends. In the fiscal year ended June 30,
BHPs Eagle Ford leasehold produced more than 130,000
boed, well on track toward its target of breaking 200,000 boed
by FY2016. Cumulative, 90-day, sustained production rates of
select BHP wells, meanwhile, are trending appreciably higher
than comparative offsets.
We could do a cheap completion using slickwater, but if our
productivity is lower, ultimately we would be better served by
funding a more expensive completion, to have better productivity on a well. Were willing to spend more money to get more
EUR, Skaufel told a Houston media gathering in June. Shale
is about continuous, year-on-year improvement. I want my next
well to be cheaper than my last well, but I want my next well to
be more productive than my last well. This puts a premium on
Fig. 2. The advanced H&P Flex rigs with walking/skidding packages have
been widely recognized as key contributors to BHPs drilling efficiency
gains in the Eagle Ford.
quired scaling a steep learning curve, and quickly. The petroleum arm of the Australian mining conglomerate made its
onshore U.S. shale debut in 2011, with the purchase of Chesapeake Energys Fayetteville shale holdings in Arkansas, which it
followed shortly afterward with the $12.1-billion acquisition of
Eagle Ford pioneer Petrohawk Energy. Skaufel acknowledged
that despite its extensive experience in deep water, BHP was a
bit surprised at the remarkably different set of dynamics in the
shale theater.
We were primarily a deepwater company going into an onshore game, where your systems and processes really were built
around that. Our costs were high initially, as I dont think we really had an appreciation for how intricate the work environment
is and how well coordinated it needs to be, he said.
Compared to the offshore arena, Skaufel said the then-new
shale player also had to cope with a third-party workforce that
was relatively inexperienced in the oil and gas industry, with
many workers having transitioned from other industries. Accordingly, the incident rates were considerably higher than the
average elsewhere within BHPs global petroleum operations.
Thus, the early emphasis was on working closely with contractors to bring the total recordable incident frequency (TRIF)
rates more in line with the rest of the organization. By 2012,
he said the H&P rigs drilling for BHP had become the safest
rigs in their entire fleet, which we attribute to the partnership
we have with our contractors.
Fig. 3. Production log and microseismic data prompted BHP to alter its
frac designs from longer to shorter stages with fewer clusters, with the
aim of creating uniform frac geometry.
Capturing production-enhancing wellbore stresses and altering frac geometry are among the completion optimization
experimentation that BHP is undertaking in the Eagle Ford. At
the foundation of the operators steadily advancing evaluations of
completion and stimulation designs is extensive use of numerical
and analytical modeling. We truly believe that you can use both
numerical and analytical models to drive your trials, and to guide
your pilots. We also invest heavily in diagnostics, in order to validate our models and to gather additional insights, Skaufel said.
As a case in point, BHP has used fracturing and reservoir simulation models to determine that very poorly propped fracs
were at the root cause of rapid decline in select wells. These
were slickwater jobs, and so you were getting a little bit of gel
without a lot of carrying capacity. The frac modeling suggested
World Oil/AUGUST 2014105
that when we drill the first well and frac it, a stress field is generated. You drill the second well and frac it, and it also generates a stress field. Because youve generated in-situ stresses, the
middle well is more highly stressed, so it will have more complex fracturing. Thats the concept, but, of course, production
performance is the variable thats going to determine whether
its successful. But, were encouraged enough to where this is
our standard practice, he said.
Weve been doing some work with the University of Texas,
and theyve got a program, where theyre looking at a concept
called stress shadowing. Theyve been doing some modeling
work on our behalf.
GOOD NEIGHBOR POLICY
In July, the American Petroleum Institute (API) issued community engagement guidelines that direct operators on how to
build lasting and successful relationships with the local residents. Skaufel said that BHP had developed its own societal
initiatives much earlier, employing the same methodical exercise
that it uses to optimize efficiencies and maximize production to
foster relationships with community stakeholders throughout its
U.S. onshore operations.
The communities that we work in are extremely, extremely
important to us, and I just cant emphasize that enough. Youre
in peoples back yards. We go through a very, very rigorous process in terms of determining where we are willing to put our
time, and where we put our money. It starts with a social baseline study, and then we move to a community perception survey, in order to be able to assess what are the key quality-of-life
indicators. Of course, youll always see a push to minimize environmental impacts, he said.
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SUBSEA ADVANCES
With an increasing number of developments in deeper water, and more challenging environments, the infrastructure, and
its associated installation, has to be adaptable and capable of coping with a range of
unique conditions.
Endeavour Internationals Rochelle development in the UK North Sea saw first
gas production from the Scott platform at
West Rochelle in October 2013, Fig. 1.
The field is approximately 185 km northeast of Aberdeen, and is a combination
of two gas condensate fields. Discovered
in April 2000, the East Rochelle development is on Block 15/27; the nearby
West Rochelle field encompasses Blocks
15/26b and 15/26c, and was discovered
in October 2010. The Rochelle unit area is
jointly owned by Endeavour International
(44%), Nexen Petroleum UK (41%) and
Premier Oil (15%).
In June 2011, Endeavour Energy UK,
a wholly-owned subsidiary of Endeavour
International, awarded Technip an engineering, procurement, construction and
installation (EPCI) contract for the East
SUBSEA ADVANCES
Fig. 2. Hydraulic pushframes were used at the Evanton spoolbase to fabricate the rigid
pipe-in-pipe used in the project.
Fig. 3. After spooling at the Evanton facility, the Apache II laid the necessary subsea pipe
in ve trips, for a record 25-day installation.
750,000
37 km
Man-hours
Incidents
Vessels
Pipe-in-pipe
installed in 25 days
110AUGUST 2014/WorldOil.com
SUBSEA ADVANCES
while the pipe-in-pipe was reeled and loaded onto the vessel. Fixed laydown lengths
subsequently saved time on vessel topsides
work during the laydown of the pipe-inpipe. The savings to the vessel and in terms
of operational time at the spoolbase were
roughly 15%.
With the aforementioned adjustments
and special considerations for the pipe-inpipe thickness and rigidity, the installation
was carried out in record time. The Apache
II (Fig. 3) was deployed to undertake the
installation and took just five trips, lasting
a total of 25 days, to lay the required 37 km
of pipe-in-pipe. This represents a reduction of approximately 32% against the initial time estimate for this work.
The ability to reduce the in-field laydown times for each trip was especially
invaluable, as some of the work took place
during the winter months. Traditionally,
operations carried out at this time of year
in the UK North Sea are subject to fewer,
and smaller, weather windows, due to
wind speeds and sea states that are incompatible with the necessary operations.
Technips engineering department
received recognition for its work during the course of the Rochelle installation project in the form of the Technip
Jacques Franquelin internal award; a
companywide initiative that recognizes
and rewards innovative design, engineering and operations.
ABERDEEN HARBORS
LARGEST VESSEL
During the course of the Rochelle project, the Skandi Arctic diving support vessel
(DSV) became the largest-ever vessel to
enter Aberdeen Harbor, Fig. 4. This was
possible, due to an $8.5-million program
that improved access to the harbor and
deepened the navigation channel. The
DSV, which measures 27 m in breadth and
156 m in length, is wider than any other
vessel that has entered the port. With a
gross tonnage of 18,640, it also surpassed
the previous record of 18,500 t. The capacity for the Skandi Arctic to enter Aberdeen
Harbor promotes larger subsea infrastructure construction in the UK region, maximizing project efficiencies by reducing
transit times to North Sea fields.
The Skandi Arctic and Apache II are
two of nine vessels that were used during the course of the work carried out by
Technip. With so many vessels involved in
the project, effective and efficient scheduling and communication were vital to
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SUBSEA ADVANCES
Fig. 4. At 156 m long and 27 m wide, the Skandi Arctic diving support vessel (DSV) was
the largest-ever vessel to enter Aberdeen Harbor.
fishing vessels away from the area, protecting the seabed infrastructure, and the fishing vessels and their equipment.
NICK RITCHIE is the Rochelle
Development Project director
for Endeavour. He has more
than 15 years of experience in oil
and gas eld development and
operations in the North Sea,
Singapore, West Africa and
Egypt. Ritchie has held a
number of senior technical and leadership
positions in the North Sea for CNR, Paladin,
Centrica and Talisman. He was a projects and
operations manager supporting various UKCS
and international developments, prior to joining
Endeavour. His experience includes predevelopments, project execution and operations
support, as well as asset management. He has
wide knowledge of FPSO and subsea systems,
having been part of the Ross and Blake eld
developments, and the lead commissioning
engineer for the Baobab deepwater
development offshore West Africa. Ritchie
graduated from University of Strathclyde in 1996
with a rst-class BS degree in naval architecture
and offshore engineering.
HARRY MCINTOSH is the UKBU Project
Manager, Subsea Construction, at Technip
UK. In this role, he gives a full account on the
companys approach during the Endeavour
Rochelle project throughout the delivery
process. McIntosh has worked across a number
of vessels with Technip since 1987, and is a
former marine superintendent.
HEAD OFFICE
114AUGUST 2014/WorldOil.com
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Throughout their history, classification societies have developed rules and procedures for evaluating shipsfocusing
on structural and mechanical aspectsand have awarded class
certificates to ships in compliance with these rules. In the early
days of offshore activity, owners and operators thought to apply the same approach, and used class certificates for insurance
purposes and as proof of compliance with international regulatory requirements. Over the decades since the first mobile offshore drilling unit (MODU) began working in the GOM, class
requirements have evolved to address industry needs and the
changing regulatory landscape.
Today, the offshore industry uses classification rules as a starting point in evaluating the safety of its operations, to evaluate
asset and equipment reliability, and to better protect on-board
personnel. Companies also seek approval in principle (AIP) as
the first step in designing new solutions and innovative concepts.
As independent, externally audited third parties, class societies are integral to the compliance verification process for new
technologies and floating structures used for offshore oil and gas
operations in many global safety regimes. By reviewing plans and
conducting surveys during construction, class societies verify
that offshore structures, and their principal machinery and equipment, have been designed and built in accordance with technical
rules and standards developed by the class society.
Class rules and guides help regulatory bodies develop acceptance criteria often these technical standards are used to establish a baseline. As a recent example, in 2013 the U.S. Coast
Guard (USCG) issued a policy letter to provide guidance for
regulatory compliance for floating offshore installations (FOIs)
and FPSO projects on the OCS. The Policy Letter establishes
alternative standards for certifying FOI and FPSO design and
equipmentin addition to existing policies and procedures
and identifies three optional classification services to assist with
compliance, with ABS maintaining its authorization to act on
behalf of the USCG. Because the USCG has limited techniWorld Oil/AUGUST 2014117
Join us for the 11th Womens Global Leadership Conference in Energy (WGLC)
November 45 in Houston, Texas and be inspired to take your career in the oil
and gas industry to the next level. As one of the largest womens events in the
industry, WGLC is the perfect forum to network with your peers and exchange
valuable ideas and experiences.
The theme for this years conference is Betting on the Future: Energy, with
sessions focused on the world energy outlook, natural gas, LNG, innovative
team thinking, risk management, resilience strategies, the imposter syndrome,
the gender gap, and challenges specic to the professional and leadership
development of women. Youll hear from leading executives including:
Lesa Adair, CEO, Muse, Stancil & Co
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INVOLVING INDUSTRY
IN RULE-MAKING
shore Unit Committee gathered industry participants to address improvement of emergency shutdown (ESD) systems
on deepwater MODUs equipped with dynamic positioning
(DP) systems, such as a drillship, Fig. 1. The focus of the discussion was unintended blackouts that disable DP capability.
According to the working group discussion, the possible
occurrence of spurious or errant signals can initiate ESD 0, or
total unit shutdown. Another possible incident that can occur
is an unwanted MODU blackout on location due to manual
activation of the ESD system, either intentional or accidental.
Recommendations generated from the working group discussion include a proposed requirement that prevents a single
operation from causing a complete unit shutdown, and for a
fire and gas detection cause-and-effect chart to be a required
submission to the organization classing the MODU.
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120AUGUST 2014/WorldOil.com
Best safety practices are most effective when they are developed and implemented impartially and objectively. The
industry can only continue pushing the boundaries of what
is possible if the new and enhanced offshore technologies
applied in areas such as the GOM are safe and reliable, particularly in deep water, where risk and operational complexity are compounded. While owners and operators elect to
maintain offshore vessels and facilities in class as part of asset integrity management, the classification process ultimately helps to keep units in compliance with technical and
regulatory requirements.
A major component of class is facilitating information exchange for rule development and enhancement of classification services to the industry. Because industry continues to
advance, class societies have to continue to update requirements to reflect the evolving needs of industry.
Independent organizations like ABS remain uniquely
positioned to assist offshore stakeholders with regulatory
compliance, based on global experience developing technical standards that promote safety and reliability on offshore
structures, honed since the industrys inception. Class will
continue to work closely with industry and regulatory agencies to support the technical innovations that further expand
responsible energy production for future generations.
BRET MONTARULI is V.P. of Offshore Technology for
ABS. His role is to support R&D projects related to
MODUs (including jackups, semisubmersibles and
drillships), as well as oating production installations
(such as spars, TLPs and FPSOs). Mr. Montaruli joined
ABS in 1981, and has held numerous engineering
positions throughout his career, most recently as V.P.
of engineering for the ABS Americas Division. He received a BE
degree from SUNY Maritime College, and an MBA from Texas
A&M University.
LUIZ FEIJO is manager of Energy Development for ABS.
He supports business and project development
activities related to the offshore industry, primarily in
the production sector, which includes oating
production installations. He works as account manager
for offshore production clients and servesas the ABS
point of contact with BSEE. Mr. Feijo joined ABS in 2001
as project manager, and later held the position of manager of project
management for the ABS Americas Division. He received a BE degree
from Rio de Janeiro State University in Rio de Janeiro, Brazil, and is a
certied Project Management Professional (PMP) by the Project
Management Institute (PMI).
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122AUGUST 2014/WorldOil.com
Halliburton promoted
Jeff Miller, currently the
companys executive V.P.
and COO, to president,
and appointed him to
the companys board of
directors, both effective
Aug. 1. In this new role,
Miller will complement the
leadership of Dave Lesar,
Halliburtons chairman
and CEO. Miller has served
as Halliburtons executive V.P. and COO since
2012, after beginning his
career with the company
in 1997, holding various
senior management roles
in the companys global
operations and business
development areas.
Occidental Petroleum
Corporation (OXY) has
appointed the leadership
team for its subsidiary,
California Resources
Corporation (CRC),
including Todd A. Stevens
as president and CEO,
and William E. Albrecht
as executive chairman
of the board. CRC will
be an independent
E&P company focused
on high-growth, highreturn, conventional and
unconventional assets
exclusively in California.
Stevens, a 19-year OXY
veteran, has served as
V.P., corporate development, since August
2012. Albrecht has been
president, Occidental Oil
and Gas - Americas, and
V.P., Occidental Petroleum,
since 2011.
Tore D. Langballe
announced that he will
resign from his position as
senior V.P., corporate communications, at Petroleum
Geo-Services ASA by the
end of the year, to take
a position as senior V.P.,
corporate communications
and IR, and chief of staff,
at Akastor ASA, an Akerowned company.
Weatherford International
has appointed Dianne B.
Ralston as executive V.P.,
general counsel and corporate secretary. Ralston joins
Weatherford with more
than 20 years of combined
legal, compliance and contractual experience in the
oil and gas industry. Her
most recent positions with
Schlumberger were deputy
general counsel, corporate,
as well as deputy general
counsel, government affairs
and litigation. William
B. Jacobson, senior V.P.,
co-general counsel and
chief compliance officer,
and Alejandro Cestero,
V.P., co-general counsel
and corporate secretary,
have both left to pursue
other opportunities, said
Weatherford.
124AUGUST 2014/WorldOil.com
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TN, VA, WI, AND WESTERN CANADA
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CLASSIFIED SALES
Gerry Mayer
Phone/Fax: +1 (972) 816-3534
Gerry.Mayer@GulfPub.com
Arnco Technology.............................................................. 66
www.hardbanding.com
C-FER, Inc..............................................................................69
www.cfertech.com/production-operations
Cameron .................................................................................. 5
www.c-a-m.com
Exterran .................................................................................95
www.exterran.com
www.flotekind.com
FMC Technologies................................................................14
Forum Energy Technologies, Inc. ...................................33
www.f-e-t.com/yourforum
Intellian ..................................................................................73
www.intelliantech.com
JFE Steel................................................................................24
www.jfe-steel.co.jp/ENERGY
MTU ........................................................................................101
www.2-cycle.mtu.online.com
MTU ........................................................................................101
www.mtu-online.com/valueexchange
N / WorldOil.com
OTC 2014
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www.smt.sandvik.com
Schlumberger ........................................................................11
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Weatherford ........................................................................ 46
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R. Brown Convention Center,
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Drilling Technology Conference,
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Convention Centre at Central
World, Bangkok, Thailand
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ONS (Offshore Northern Seas)
2014, Aug. 2528, Stavanger
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SPE, Heavy Oil Conference and
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Hilton Kuwait Resort,
Mangaf, Kuwait
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IPTC (International Petroleum
Technology Connference), Dec.
1012, Kuala Lumpur Convention
Center, Kuala Lumpur, Malaysia
F: +60 (3) 2182 3030
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Colorado Convention Center
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Esteemed Speakers
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many coal mining and electricity generation jobs are threatened. Indeed, the
United Mine Workers of America staged
a protest (see photo below) in Pittsburgh
during late July, while EPA conducted
public hearings on this proposed plan.
This is one union, for which Mr. Obamas
shtick no longer works.
On the fifth item, garnishing wages,
the Debt Collection Improvement Act of
1996 gives all federal agencies the power
to conduct administrative wage garnishment, but only the Internal Revenue Servicewhich traditionally has had this
rolehas taken it seriously. Yet, EPA now
says that it has this authority without first
obtaining a court order. This should put
chills down the spines of all industry executivesif their corporations are found
to be in non-compliance with EPA rules,
they could be held liable, too.
Beyond the coal miners, condemnation of EPAs behavior is slowly growing.
Last month, Republican Senators David
Vitter (La.), Mike Enzi (Wyo.) and John
Barrasso (Wyo.) sent a letter to McCarthy, in which they lectured her that EPAs
new wage garnishment procedures provide an agency prone to regulatory abuses
with even more power over Americans.
Two weeks later, Sen. Jeff Sessions (Rep.
Ala.) told McCarthy during a committee
hearing, The American people run this
countryyou dont run this country.
Yet, an ever-defiant McCarthy responded that a Supreme Court endangerment
finding on carbon pollution gave the EPA
plenty of authority.
There are some in the natural gas sector, who think its okay for the feds to dismember the coal industry, because that
would open up a wider window for gas
generation of electricity. But thats shortsighted thinkingthe EPA is still going
to attack oil and gas, whether or not the
coal industry survives. Instead, we should
all band together in a greater effort to fight
off these federal tyrants.
KURT.ABRAHAM@WORLDOIL.COM
Tubulars &
Inspection
Services
drilco.com
Hevi-Wat
Hevi
Hev
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-Wa
Wate is a mark
mark of Scchhlu
hlumber
erger.
ger. 2014 Schl
h umbe
mberger
rger. 14
14-DT-DT-0086
008
Technology and Business Information for the Global Gas Processing Industry
SMALL-SCALE
GAS PROCESSING
SOLUTIONS
SHRINKING TECHNOLOGY
Leading companies discuss
big impacts from small plants
LNG DESIGN
Design considerations for LNG
and regasification equipment
MIDSTREAM BUSINESS
Diversification drives
North American M&A activity
Special Supplement to
Mission Critical
Equipment
chart-ec.com
JULY/AUGUST 2014
GasProcessingNews.com
SPECIAL REPORT:
SMALL-SCALE GAS
PROCESSING SOLUTIONS
23
25
29
61
S. Gill
41
25
49
61
15
GAS PROCESSING IN
NORTH AMERICA
63
DEPARTMENTS
COLUMNS
Diversiication drives
North American
gas processing M&A activity
J. Stell
EDITORIAL COMMENT
www.GasProcessingNews.com
P. O. Box 2608
Houston, Texas 77252-2608, USA
Phone: +1 (713) 529-4301
Fax: +1 (713) 520-4433
Editorial@GasProcessing.com
PUBLISHER
Bret Ronk
Bret.Ronk@GulfPub.com
ADRIENNE BLUME,
Managing Editor
small-scale GTL technologies will be determined by market needs, as well as by the growing shift in production from site-specific to distributed processing. Velocys CEO Roy Lipski discusses the challenges inherent in transporting natural gas, which is a cheaper and
more environmentally friendly fuel than oil or coal. These challenges can be turned into
opportunities with the help of smaller-scale production facilities that are positioned
closer to gas gathering and processing sites. Such smaller-scale production networks are
more flexible, robust and adaptablea view also shared by Valerus CEO Steve Gill.
Valerus sees the industry as being challenged to focus on building facilities that meet a
wide range of process conditions, enable quick installation and have scalability. In this way,
small-scale gas processing solutions help expedite cash flow, which has become a main
concern for producers as they continue to build gathering and processing infrastructure.
Feed flexibility enhances production options. Additionally, the vice president of
business development for Primus Green Energy, George Boyajian, speaks to Gas Processing about the importance of feedstock flexibility to successful small-scale fuels production.
He explains how Primus technology uses a variety of carbon-rich feedstocksincluding
natural gas, biomass, municipal solid waste and othersto make high-quality syngas.
The mix of engineering and commercial perspectives in this months special report
provides a comprehensive picture of the evolving small-scale gas processing industry, and
how these technologies can be applied to create custom solutions for large, mid-sized and
small gas processors alike. Additionally, a bonus report on LNG examines the design and
operation of boiloff gas recondensers for liquefaction operations, as well as the construction of a new offshore regasification facility in South America. GP
4JULY/AUGUST 2014|GasProcessingNews.com
EDITORIAL
Managing Editor
Adrienne Blume
News Editor
Melanie Cruthirds
Associate Editor
Helen Meche
Director, Data Division
Lee Nichols
Editor, Hydrocarbon Processing
Stephany Romanow
MAGAZINE PRODUCTION
Vice President, Production
Sheryl Stone
Manager, Editorial Production
Angela Bathe
Artist/Illustrator
David Weeks
Graphic Designer
Amanda McLendon-Bass
Manager, Advertising Production
Cheryl Willis
ADVERTISING SALES
See Sales Offices, page 70.
Copyright 2014
by Gulf Publishing Company.
All rights reserved.
President/CEO
John Royall
Vice President
Ron Higgins
Vice President, Production
Sheryl Stone
Editor-in-Chief
Pramod Kulkarni
Business Finance Manager
Pamela Harvey
Part of Euromoney Institutional Investor PLC.
Other energy group titles include:
Hydrocarbon Processing, World Oil and
Petroleum Economist.
ametekpi.com
LNG bunkering
report addresses
regulations
ABS, a provider of
classification services to the global
marine and offshore industries, has
released a report on the bunkering
of LNG-fueled marine vessels in
North America. The objective of
the report is to provide guidance
to potential owners and operators
of gas-fueled vessels, as well
as LNG bunkering vessels and
facilities, to help them obtain
regulatory approval for projects.
The report, developed by
ABS and ABS Group, takes a
broad look at the requirements
of various regulatory bodies,
including the International
Maritime Organization, the US
Coast Guard (USCG), Transport
Canada, the US EPA, and the
many state and local authorities
involved in a bunkering project.
Included in the report is
a recommended process for
meeting those requirements
and obtaining approval for the
LNG bunkering infrastructure
project. The report touches on
a number of key considerations
for any LNG bunkering project,
including reviewing potential
bunkering options; identifying
potential hazards and risks,
and recommending potential
safeguards; presenting state,
local and port-specific issues;
summarizing applicable
regulations; and outlining a
process for meeting those
requirements and obtaining
project approval.
6JULY/AUGUST 2014|GasProcessingNews.com
EPA nalizes
ONEOK GHG permit
The US Environmental
Protection Agency (EPA) has
issued a final greenhouse gas
(GHG) Prevention of Significant
Deterioration (PSD) construction
permit to ONEOK Hydrocarbon.
The company plans to expand
operations at its existing NGL
processing plant in Mont Belvieu,
Texas. The permit allows the
company to construct two new
units at its Mont Belvieu facility,
east of Houston.
The units will use fractionation
to process NGL into products
such as propane and butane. The
estimated project cost is $800
million (MM). After the expansion
is complete, the company will
add 15 to 25 permanent jobs.
The EPA issued a previous GHG
permit for this facility in July 2013.
In June 2010, the EPA finalized
national GHG regulations, which
specify that, beginning on January
2, 2011, projects that increase
GHG emissions substantially will
require an air permit. The EPA has
finalized 44 GHG permits in Texas,
proposed an additional seven
permits, and has 19 additional GHG
permit applications under review.
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Permian basin
midstream
gas deal inked
Canyon Midstream Partners
has entered into gathering and
processing agreements with
Apache and XTO Energy, a
subsidiary of Exxon Mobil, for
midstream services on Canyons
James Lake System. In addition,
Canyon said it expanded its
cryogenic gas processing plant
at the James Lake plant in Ector
County, Texas, from 70 MMcfd to
100 MMcfd, by adding a 30-MMcfd
cryogenic turboexpansion train.
The James Lake plant is part
of Canyons James Lake system,
which includes 60 mi of 12-in.
trunkline and six field compressor
stations providing low-pressure
gathering services to Ector,
Andrews, Martin, Dawson and
Gaines counties, Texas.
When completed in late 2014,
the James Lake system will deliver
residue gas into the El Paso gas
pipeline, and deliver NGL to the
Sand Hills and Chaparral pipelines.
Canyon is also developing Phase 2
of the James Lake system, which
will consist of a second 100-MMcfd
cryogenic gas processing plant in
Martin county and 60 additional
mi of 12-in. trunkline, which will
expand the systems service
territory into Howard and Borden
counties, Texas. Canyon expects
Phase 2 to commence operations
in the first half of 2015.
FEED work
awarded for
Goldboro LNG
CB&I has been awarded a
contract by Pieridae Energy
for FEED for the Goldboro LNG
project located in Guysborough
County, Nova Scotia, Canada.
Under the FEED contract, CB&I
will design and engineer two LNG
trains and associated facilities in
preparation for the EPC phase.
Goldboro LNG will produce up
to 10 MMtpy of LNG and will
have onsite storage capacity of
690,000 m3 of LNG.
Pieridae is in advanced
discussions with several
natural gas producers, pipeline
operators and LNG customers,
the company reported. In June
2013, Pieridae entered into a
20-year sales agreement with
E.ON Global Commodities, a
subsidiary of one of the worlds
largest investor-owned power
and gas companies, to deliver
approximately 5 MMtpy of LNG
from Goldboro LNG to E.ON.
8JULY/AUGUST 2014|GasProcessingNews.com
Dominion receives
favorable
FERC review
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Canada approves
LNG export
licenses
Canadas National Energy
Board has approved two
applications for 25-year natural
gas export licenses. A license was
approved for Aurora Liquefied
Natural Gas Ltd. to export LNG.
The export point would be in
the vicinity of Prince Rupert,
British Columbia, at the outlet of
the loading arm of a proposed
liquefaction terminal.
A license was also approved
for Oregon LNG Marketing
Company LLC to export natural
gas. The export point would be
in the vicinity of Kingsgate and
Huntingdon, British Columbia,
via existing natural gas pipelines.
The issuance of both licenses is
subject to the approval of the
Governor in Council.
Diesel-to-gas
engine picked
for pilot program
Omnitek Engineering Corp.
has been selected for a Little
Rock, Arkansas pilot program
intended to demonstrate
the economic benefits and
environmental effectiveness of
the companys EPA-approved
diesel-to-natural-gas engine
conversion technology for the
Navistar DT466E heavy-duty
truck engines used by the citys
municipal truck fleet.
Werner Funk, president and
CEO of Omnitek, noted that the
converted natural gas trucks will
use Little Rocks new CNG fueling
station, resulting in an estimated
savings to the city of $2.50/
gal$3/gal equivalent, compared
to the retail price of diesel fuel.
Cameron brings
CryoCAM plant
online
Camerons CryoCAM plant
is now operating at Nuevo
Midstreams Ramsey processing
facility in Reeves County, Texas.
The 200-MMscfd cryogenic gas
processing plant was built for the
Phase III expansion of Nuevos gas
gathering, processing and treating
system in the Delaware basin near
Orla, Texas.
The new CryoCAM plant brings
the total cryogenic gas processing
capacity of the Nuevo system to
300 MMscfd, nearly tripling its
current capacity. Cameron has
introduced two new standardized
modular configurations of
its CryoCAM cryogenic gas
processing plants for maximum
NGL recovery using NGL-MAX
technology from Randall Gas
Technologies. Cameron offers
standard 75-MMscfd and
200-MMscfd cryogenic gas
processing plants.
LNG Canada
chooses FEED
contractors
10JULY/AUGUST 2014|GasProcessingNews.com
A JV of Foster Wheeler,
Chiyoda, Saipem and
WorleyParsons was awarded a
contract by LNG Canada for the
provision of front-end engineering
design (FEED) and project
execution services for a proposed
LNG export project in Kitimat,
British Columbia.
The LNG Canada project
is planned as a phased
development that will initially
comprise two processing trains,
each with a production capacity
of approximately 6 MMtpy of
LNG, with an opportunity for an
additional two trains.
The release to proceed with
the project execution phase is
subject to regulatory approvals
and a financial investment decision
by LNG Canada, which is expected
to be made in the next few years.
LNG Canada comprises Shell
(50%) and affiliates of PetroChina
(20%), Korea Gas Corp. (15%) and
Mitsubishi Corp. (15%).
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US INDUSTRY METRICS
A. BLUME, Managing Editor
80
70
60
50
40
30
20
10
0
7
6
5
4
Hub)
Monthly price (Henry Hub)
12-month price avg.
Production
M J J A S O N D J F M A M J J A S O N D J F M A M
2012
2013
2014
3
2
Production, Bcfd
Tailor-made solutions
for gas treatment
and sulphur recovery
1
0
www.sini.it - marketing@sini.it
12JULY/AUGUST 2014|GasProcessingNews.com
15
10
5
0
July 2013
Oct. 2013
Jan. 2014
April 2014
July 2014
Natural gasoline
Isobutane
Butane
NGPL composite
Propane
Ethane
Natural gas spot prices (Henry Hub)
$/MMBtu
20
2,500
2,000
1,500
Propane/propylene
Ethane/ethylene
LPG
NGL
1,000
500
April May June July Aug. Sept Oct. Nov. Dec. Jan. Feb. Mar. April
2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014
squeezing profit margins as plants operate well below their nameplate capacities.
Thirdly, some historical gas plant configurations are not efficient for processing Canadas new rich gas plays. Not all
producers have deep-cut (or ethane/light
NGL extraction) plants, so more ethane is
now kept in the pipeline gas stream, which
is showing up at export straddle plants.
Meanwhile, pentanes-plus production is
declining, ethane and butane output is
flat, and propane production is increasing
rapidly, according to recent reports.
At present, Canada has ample processing capacity of approximately 30 billion cubic feet per day (Bcfd) (TABLE 1),
along with a robust natural gas gathering and transportation pipeline network.
Canadas gas processing plants are running at a total aggregated average of 50%
utilization after the 2014 spring gas plant
turnaround season. Generally, gas plant
turnarounds take place every four years,
with operators staggering their facility
turnarounds to ensure sufficient available
capacity to serve upstream operators.
Specifically, Canada has more than
500 thousand barrels per day (Mbpd) of
NGL extraction capacity and significant
sales gas reprocessing/ethane extraction
plant capacity of 14.7 Bcfd.
Meanwhile, in late 2012, Canadas
National Energy Board (NEB) released
Processing plants
Alberta
620
23,700
British Columbia
70
5,800
Saskatchewan
20
190
600
10
14,000
750
Nova Scotia
Reprocessing plants
Alberta
British Columbia
FIG. 1. The Dingman No. 1 well led to the development of Canadas first gas processing plant.
Photo courtesy of Alberta.com.
16JULY/AUGUST 2014|GasProcessingNews.com
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From wellhead to marketwe have the resources
to handle your production the right way.
Exterrans gas processing and treating solutions and global compression fleet
ensure your operation is better managed from the ground up. And with over
50 years of tackling the oilfields infrastructure challenges, youre not handing
your project to just anybody. Youre counting on a legacy of success.
Gas Processing
Production Equipment
Gas Compression
Integrated Projects
Aux Sables Septimus pipeline transports sweet, liquids-rich gas from the
Septimus facility to the Alliance Pipeline for downstream processing at Aux
Sables Channahon NGL extraction and
fractionation facility. The pipeline was
constructed and sized to accommodate
potential future volumes from the liquids-rich Montney gas play.
Encana. The company signed an agree-
LNG gives us a cleaner and more competitive energy future. As a major player in the
LNG eld, we provide innovative technology that includes large- and mid-scale compression,
and now our recently introduced, distributed, 6,000 GPD LNGo
o production solution.
To learn more, call 1-800-372-2608 or visit lng.dresser-rand.com
The Americas: (Intl +1) 713-354-6100 / EMEA: (Intl +33) 2-35-25-5225
Asia-Pacic: (Intl +60) 3-2093-6633 / lng.dresser-rand.com
CompressorsTurbo & Recip / Steam Turbines / Gas Turbines / Engines / Control Systems / Expanders
18JULY/AUGUST 2014|GasProcessingNews.com
new 55-Mbpd propane-plus fractionator, called RFS III, at its existing Redwater fractionation and storage complex.
It also began work on a new high-vaporpressure pipeline lateral that will extend
the gathering potential of its Brazeau
Pipeline in the Willesden Green area of
south-central Alberta.
The $400-MM RFS III fractionator,
which is supported by long-term takeor-pay contracts with multiple producers, will be the third fractionator at
Pembinas Redwater complex and will leverage the design and engineering work
completed for Pembinas RFS I and RFS
II fractionators.
RFS I, with an operating capacity of
73 Mbpd, will be debottlenecked to bring
capacity to 82 Mbpd in the fourth quarter of 2015. When combined with RFS
II, which is expected to come into service
at the same time, the companys fractionation capacity will nearly double to 155
Mbpd. With the addition of RFS III, Pembinas fractionation capacity will total 210
Mbpd, making the Redwater complex the
largest fractionation facility in Canada.
The site will be designed to accommodate a deethanizer tower, which will allow a capacity of 73 Mbpd and bring the
total capacity at Redwater to 228 Mbpd.
Subject to regulatory and environmental
approval, Pembina expects RFS III to be
in service by the third quarter of 2017.
At present, Pembinas Redwater West
NGL system includes the Younger ex-
FIG. 2. The sun rises over the Ricinus gas plant in Apache Canadas West 5 operating area
in central Alberta. Photo courtesy of Apache Corp.
ing explored, so the current drilling program includes a mix of single-well and
multiple-well pads. Eventually, most of
the wells will be drilled on pads containing up to 26 wells, with two such pads for
every 3 square miles of land.
Future prospects. Despite the challenges faced by Canadas gas processing operators, the industry segment continues to
expand and to supply its nation, and the
US, with much-needed oil and gas products. Going forward, as proposed and
planned LNG export capacities come
onstream, Canadian gas processors are
expected to see an uptick in both expansions and future profits. GP
JEANNIE STELL is an award-winning
freelance writer and editor focused
on the upstream, midstream and
downstream energy industry. Her
articles have been published in
several languages and referenced in
white papers by Microsoft and
Iranian National Oil Co., and her photographs have
been featured on industry magazine covers and in
feature editorials. Ms. Stell is the founder of Energy Ink
and can be reached at jstell@energyink.biz.
D
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28 30 October 2014
Thursday 30 October
Pre-Event Workshop
Wednesday 29 October
Energy Mix: What Role Does
Gas Play in Energy Security?
Gas Trade in Asia
Unlocking Gas Demand in
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Markets
Platinum Sponsor:
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20JULY/AUGUST 2014|GasProcessingNews.com
Nicolas Zanen,
Vice President,
Trading,
Cheniere Energy
Amos J Hochstein*,
Laszlo Varro,
Anthony Jude, Hiroki Sato, General
Deputy Assistant Head of Gas, Coal
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concurrently
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*Speaker schedule may be subject to changes
Bernard
Samuels,
Vice President
Commercial,
Sakhalin Energy
Investment
Company Ltd
Organised by
will pave the way toward the state of Alaska becoming an equity
partner in the project. An agreement to this effect was anticipated to be signed by the end of June. The agreement would move
the project into the pre-front-end-engineering-and-design (preFEED) stage, which could see completion in 2015 or early 2016.
The projects partners are targeting the nearby expanding
Asia-Pacific demand market, which could double in volume by
2025. However, a number of LNG projects in British Columbia, Canada, are also eyeing this market. The huge volume of
LNG that would be produced from the project would enter the
market at once, forcing the JV partners to ensure outlets for
the product prior to making a final investment decision (FID).
The FID will likely take several years; Black & Veatch,
which is advising the state of Alaska on the project, reports that
an FID could come in 2019, at the earliest. The FID for Alaska
LNG is heavily dependent on securing LNG buyers and project permits. Pre-FID spending, which is typically less than 10%
of the total cost of a project, is estimated at $2.4 B for Alaska
LNGs pre-FEED and FEED. It is customary for large-scale
LNG projects to secure commitments from customers for the
majority of the LNG output before the FID is made.
Alaska LNGs $45 B$65 B costthe majority of which covers the LNG plant and the 800-mi pipelinehas been called
prohibitive by some analysts. If the large-scale gas project is
scrapped because the projected profits would not be worth the
high project cost, a second option could be to convert stranded
gas on the North Slope into GTL. A smaller-scale GTL plant
CPPAC
Cen trif u gal P um p Pac
GULF
P U B L I S H I N G C O M PA N Y
+1 (713) 520-4426
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22JULY/AUGUST 2014|GasProcessingNews.com
Esteemed Speakers
Include:
Robert Schosker
Team Lead Interface Technologies
Product Manager
Pepperl + Fuchs, Inc
Alternative Uses
North American
Infrastructure Development
Dehydration/Cryogenics
Equipment
Compressors/Equipment
Methane
Reliability
Process Improvement
GTL/Modular Construction
View the complete agenda online at GasProcessingConference.com
George Boyajian
Vice President, Business Development
Primus Green Energy
Dale Winterhoff
Principal Engineer
Flowserve Corporation
COFFEE BREAK
TRACK 1
TRACK 2
Session 1: NGL
Session 2: Dehydration/Cryogenics
LUNCH
Sessions 3 and 4
The Future of Long Term LNG Contracts Peter Hartley, PH.D.,
Baker Institute Faculty Scholar, Rice University (Invited)
COFFEE BREAK
COFFEE BREAK
TRACK 1
TRACK 2
Sessions 6 and 7
EOR design & economics: CO2 supply & breakthrough gas processing options Richard Wissbaum, , P.E. P.Eng.,
Technology Director, URS Corporation
Natural Gas/Electric Compressors David Coker, V.P.,
Energy Transfer Technologies
LUNCH
Sessions 8 and 9
Invoking the Equivalency clause in NFPA standards for designing compliant burner management systems
Charles M. Fialkowski, CFSE Siemens Industry
Explosion prevention: A comparison between intrinsic safety vs. explosion proof Robert Schosker, Team Lead Interface
Technologies Product Manager, Pepperl + Fuchs, Inc
Adam Hedayet, Vice President, Business Development,
Sea NG Corporation (invited)
COFFEE BREAK
Session 10
Panel discussion: Transportation Fuels Invited participants include: Sea Star Line -Tote Maritime; EnCana Corp, Canadian
Govt - Go With Natural Gas; Waste Pro of Florida, Inc; Primus Green Energy Inc.
CLOSING REMARKS
Early Bird
(by August 13)
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RL. This JV is focused on converting biogas (e.g., from landfills) into fuels
and chemicals using our smaller-scale
GTL technology. To my knowledge, this
is the only market-ready approach that
can actually produce third-generation
alternative fuels cost-competitively with
conventional ones.
The first project will be at East Oak,
Oklahoma, and the JV aims to roll out
several of these plants across the country. Outside of this JV, Velocys sees itself
getting increasingly involved in projects
with producers, midstream companies
and refiners that are seeking a more diversified and profitable approach to the
natural gas business.
GP. What are the benefits of smallerscale GTL to midstream companies
and their clients?
24JULY/AUGUST 2014|GasProcessingNews.com
into syngas on its own, or buy the syngas from a supplier. The syngas is then
scrubbed to remove carbon dioxide and
other impurities, such as sulfur, prior to
the liquid fuel synthesis process. Primus
STG+ technology can utilize syngas from
a variety of sources, as long as the syngas
meets its specifications.
After the syngas is produced and
scrubbed, the STG+ process uses four
separate reactors to transform that gas
into liquid fuels. In the first reactor, syngas
is converted into methanol. The second
reactor converts the methanol into dimethyl ether. The third reactor produces
heavy gasoline, which has an undesirable
durene content. The fourth reactor cleans
the heavy gasoline by converting durenes
into other compounds, with a finished
transportation fuel being produced at the
end. The end product depends partly on
the catalysts used in the four-reactor system. Primus uses standard catalysts similar
to those used in other GTL technologies.
By reducing the number of steps in its
process, Primus has made its STG+ technology more efficient, less expensive to
build, and more scalable than competing
GTL technologies, which include methanol-to-gasoline (MTG) and FischerTropsch (FT), the most common GTL
process in use today. The cost effectiveness of Primus STG+ technology has
been validated through a cross-examination of data provided by Christodoulos A.
Floudas, a professor at Princeton University. In a study comparing FT with MTG
processes, he demonstrated that MTG is
consistently more cost-effective, in terms
of both capital and overall costs, than FT
at small, medium and large scales. Because
Primus STG+ process is more energetically efficient and less costly to build than
MTG processes, it promises to be more
efficient, cost effective and scalable than
Gas Processing|JULY/AUGUST 201425
26JULY/AUGUST 2014|GasProcessingNews.com
Paris, France
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WORLDS LARGEST
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GB. Our demonstration plant uses natural gas as a feedstock to produce 90-plus
octane gasoline directly, via a single-loop
process. We plan to begin the production
of jet fuel and diesel fuel later this year, in
addition to the development of solvents.
As mentioned, we plan to incorporate biomass feedstocks into our business model
once the improving economics of biomass
gasification yield a more economically attractive biomass-derived syngas.
Our drop-in gasoline has undergone extensive third-party testing, and it has been
verified to meet or exceed all ASTM International standards by independent laboratories, including Bureau Veritas; ASTM
is the industry metric by which gasoline is
measured. Specifically, as compared to traditional gasoline, our gasoline exhibits far
lower sulfur content, lower benzene content, minimal corrosion and the lowest degradation possible. In addition, our gasoline
was also tested for oxidation (fuel stability)
and corrosion potential, in accordance with
standard ASTM International test procedures. Both oxidation and corrosion potential results were excellent. The gasoline
produced at our demonstration plant has
consistently produced these results.
Furthermore, because of its high quality and low sulfur and benzene contents,
28JULY/AUGUST 2014|GasProcessingNews.com
GB. Our focus is on the first commercial plant, which is expected to produce
more than 28 million gallons per year
(MMgpy) of fuel, starting in 2016. We expected to start construction on that plant
later in 2014, with the exact location to be
determined. We do foresee the construction of additional large-scale commercial
plants in the future, though we are focused
on the first plant.
There is also a sizeable market opportunity for our STG+ technology at a small
scale, to address the problems of flared gas
and stranded gas.
GP. At which types of locations,
and in which world regions, do you
see investment opportunities
for small-scale GTL technologies,
in general, and for STG+ technology,
specifically, going forward?
SG. Much like our peers in the downhole services sector, the need to develop
these resources quickly and efficiently is
driving a need for lean manufacturing,
plug-and-play designs, and modularizationa standardization mindset, if
you will. There has been much talk of
this model being applied during drilling
and production, where a bulk of CAPEX
[capital expenditures] is spent.
Handling and processing also allow
for a standardization mindset, especially
in terms of optimizing facility development time lines and the ability to deploy
facilities with flexible, plug-and-play
designs. After all, it is the handling and
processing facility that stands between
production and getting gas to market.
GP. There has been much attention
recently on modular and mobile gas
processing solutions. How is Valerus
responding to this trend? Does the
company plan to add to or modify
its services to fit the changing gas
processing landscape?
SG. It is not just a priority, but the priority. We have consistently maintained a
total recordable incident rate well below
the industry average for the last few years,
due to significant vigilance, implementation of standard work procedures, and,
most of all, culture. Our target zero mentality starts with me and is driven into every employee from day one. We have manufacturing facilities that have operated for
years without an incident. We pride ourselves on this track record, as we believe
we have one of the best track records in
our sector, if not the best. GP
30JULY/AUGUST 2014|GasProcessingNews.com
Esteemed Speakers
Include:
NGL/LNG
Alternative Uses
Stranded Gas/Sour Gas
North American Infrastructure
Development
Separation Technology/Catalysts
Equipment
Dehydration/Cryogenics
Methane
Compressors/Equipment
Process Improvement
Reliability
GTL/Modular Construction
View the complete agenda online at GasProcessingConference.com
Those who are involved in natural gas gathering, compression, treating, processing, storage
and marketing, as well as those involved in natural gas liquids fractionation, transportation
and storage and marketing. Individuals involved in the following roles will benet by
attending: Chief executive officers, chief operating officers, chief technology officers,
presidents, vice presidents, senior vice presidents, managing directors, managers, directors,
executive directors, country managers, regional managers, project managers, chief engineers,
engineers and technical directors.
George Boyajian
Vice President, Business Development
Primus Green Energy
Conference Fees
Regular Admission
Single Attendee
$891
$990
Team of Two
$1,634
$1,815
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$3,787
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Dale Winterhoff
Principal Engineer
Flowserve Corporation
+ EnergyConstructionForum.com
Organized by:
Hosted by:
CATALYSTS
Design fixed-bed sulfur removal systems for offshore natural gas C34
CORPORATE PROFILE
BASF C39
COVER PHOTO
Courtesy of BASF. An international, downstream, catalysts provider,
BASF is headquartered in Ludwigshafen, Germany.
2014
CATALYSTS
The adsorbents in this class chemically adsorb sulfur molecules in an irreversible reaction with water as a byproduct. They
are typically selected when the gas stream is dry, and water injection is not possible. Available in several formulations, these
adsorbents can contain zinc, copper or other transition metals. A combination of these metals may also be used to achieve
maximum efficiency.
The choice of metal oxide adsorbent depends on the contaminant to be removed. These adsorbents operate at a broad
range of temperatures, with some providing greater pickup capacities at higher temperatures.
IRON-BASED ADSORBENTS
After the initial discovery of oil and gas off the coast of Brazil,
a major oil-producing company approached one company to help
with the challenges of treating gas at sea. In response, the company
designed a set of experiments to test different adsorbent compositions under various conditions, including a range of sulfur concentrations, gas compositions, velocities and water-saturation levels.
The studies allowed the company to define the most important parameters for the design of fixed-bed sulfur-removal systems, and to develop new adsorbents with ideal performance
and kinetics. This systematic approach is still used today to create adsorbent solutions for customers.
FIXED-BED TECHNOLOGY
C34
CATALYSTS|JULY/AUGUST 2014|GasProcessingNews.com
CATALYSTS
drain and purging times. This prevents the water from becoming slurry due to contact with other components. If necessary,
the height of the vessel containing stored water should be increased at this stage.
As demonstrated in FIG. 1, the fixed-bed sulfur-removal unit
can be located at different positions in the FPSO vessel, provided that the right adsorbent type and unit size are selected.
Since the reaction between the H2S molecules and adsorbent is
facilitated by the presence of water in the gas stream, the ideal
position is prior to the dehydration unit.
LOADING AND UNLOADING
Pickup capacity
Capacity of adsorbent to remove sulfur, expressed in mass of sulfur per volume of adsorbent (sulfur kg/m of adsorbent),
or mass of sulfur per weight of adsorbent (sulfur kg/kg of adsorbent). Amount of sulfur removed can be determined based on
the adsorbents composition.
Lifespan
The lifespan of the adsorbent bed must be long enough to prevent premature sulfur breakthrough.
Porosity
Resulting from different production methods, porosity contributes to the surface area where chemical adsorption occurs.
Sulfur molecules must move into the pores to react with the active sites.
Surface area
Active sites are distributed on the surface where adsorption takes place. The amount and nature of active sites play a critical
role in adsorption.
Particle size/shape
Promote activity, provide strength and influence pressure drop. Selection of particle shape and size is governed by the
required adsorbent volume and vessel size.
Crush strength
Dependent on shape, size and formulation, crush strength measures the amount of force that adsorbent particles can withstand
before cracking. It is important to provide continuous operation of the gas treatment unit without reduction in production
capacity or shutdown due to pressure drop or plugging.
Density
Helps determine the amount of sulfur removed from a certain volume or weight of adsorbent.
Attrition
Measures the propensity of the particle to generate dust, fines or powder during operation. Can be a problem for units
with high gas velocities where the adsorbent can move.
GAS PROCESSING|JULY/AUGUST 2014|CATALYSTS
C35
CATALYSTS
TABLE 3. Simulation results for operating expenditure and capital expenditure on a relative basis
Technology version
100
100
100
100
100
100
100
100
100
100
114
375
Relative density
100
54
110
Example
Flowrate, Nm3
Inlet sulfur, ppmv
170
170
170
100
100
100
100
50
50
100
87
53
100
128
364
100
77
14
Position
2
Position
1
Lower-pressure
Blower A
Position
3
Higher-pressure
Dehydration
Well uid
CATALYSTS|JULY/AUGUST 2014|GasProcessingNews.com
PLANNING TRIPS
CATALYSTS
100
70
100%
87%
80
Relative cost
90
60
50
53%
40
30
20
10
0
TAKEAWAY
The design of offshore sulfur-removal systems requires careful planning and consideration. A modular setup and efficient
logistics will help minimize equipment footprint and overcome
space limitations on FPSO vessels.
When selecting a technology, it is important to remember
that, while fixed-bed systems require regular replacement, they
can offer greater cost efficiency and a longer lifespan than liquid systems. Choosing between fixed-bed adsorbents that are
based on either iron or metal oxide depends on the producers
goals and the characteristics of the natural gas stream. A detailed
analysis of all costs will result in the lowest total cost per ton of
sulfur removed, while also reducing risk and complexity. GP
Fe original
Fe improved formulation
Fe new formulation
www.ConstructionBoxscore.com
AL
B
O
L
G
E
H
T
R
O
F
E
C
N
E
MARKET INTELLIGSSING INDUSTRY
GAS PROCE
Project details on thousands of active projects and global construction contracts, including contact information
for key personnel
Advanced search that lters the listings by project type, scope, region, investment and more
Daily updates for new and newly updated projects
The weekly Boxscore Update e-newsletter with new listings and trends analysis
Logon to www.ConstructionBoxscore.com and discover how the HPIs most trusted source
of construction data just BECAME EVEN MORE POWERFUL! For more information, contact Lee Nichols,
Data Director, at +1 (713) 525-4626
GAS PROCESSING|JULY/AUGUST 2014|CATALYSTS
C37
We create
chemistry
that makes natural gas
love solutions.
BASF
BATTERY MATERIALS
Formed in 2012, the Battery Materials global BASF business unit
offers advanced cathode materials to allow higher energy density and
increased efficiency by enabling more discharge/ charge battery
cycles. It also offers high-purity customized electrolyte formulations that
are ideal for automotive battery applications. BASF is the global leader
in nickel-metal hydride (NiMH) technology development and licensing.
Additionally, it conducts future-generation battery materials research,
working alongside BASFs global R&D network and select third-party
development partners. For more information see pages 2223.
SPONSORED CONTENT
CONTACT INFORMATION
Americas
catalysts-americas@basf.com
Asia Pacific
catalysts-asia@basf.com
Europe, Middle East & Africa
catalysts-europe@basf.com
www.catalysts.basf.com
C39
Technology and Business Information for the Global Gas Processing Industry
GAS PRETREATMENT
The first step in any GTL process is gas pretreatment. The
purpose of gas pretreatment is to make the gas suitable for the
downstream processes. There are two groups of compounds
that are usually present in natural gas and that should be removed during pretreatmentthe associate NGL and the sulfur-containing compounds. Some natural gas reservoirs may
also have other trace components that must be removed, but
these are not discussed here.
Associated NGL. The reasons for recovering the associated
NGL are twofold. First, since the objective of the process is to
produce liquid products from natural gas, products that are already in liquid form should be recovered. Second, the design
of the natural gas reformer depends on the gas composition.
Hydrocarbons heavier than methane are more easily converted
and are more prone to carbon formation under some reforming conditions. By recovering the associated NGL, the natural
gas is less prone to carbon formation.
The recovery of NGL is a physical separation. The technology
selection must be tailored to the reservoir characteristics. The efficiency of liquid recovery is dependent on the technology selection, and the downstream impact is localized to the gas reformer.
Desulfurization of natural gas. In large-scale GTL facilities,
Pretreatment
Water
Oxidant
Water
Reforming
Water
Steam
CO2
Conditioning
FT
Recovery/
rening
Gas
Oil products
Water products
CH4 + H2O r CO + 3 H2
(1)
Natural gas
Water (steam)
Oxidant
Direct heating
Natural gas reforming
technologies
To stack
Natural gas
Water (steam)
Oxidant
Fuel gas
Syngas
42JULY/AUGUST 2014|GasProcessingNews.com
CO + H2O i CO2 + H2
(2)
Introducing!
US GAS PROCESSING PLANT DIRECTORY
HydrocarbonProcessing.com/GPPD
Feedstock supply/logistics
Plant scope and detail
Key contacts to plant and corporate personnel
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with a gas loop pressure in the range of 1.9 MPa2.5 MPa (275
psi360 psi). FT synthesis can be conducted at near-atmospheric pressure, but the reaction rate increases and the equipment size
decreases as the operating pressure is increased. There are also
costs involved with operating at higher pressure. Any operating
pressure above the production pressure of the natural gas from
the reservoir requires additional gas compression. Furthermore,
when the reforming technology involves direct heating (FIG. 2),
the pressure of the oxidant co-feed must also be increased.
Compressors are expensive capital equipment that are costly
to operate and that have a large utility footprint. The operating
pressure of the gas loop, in conjunction with the technology selection for gas reforming, determines the compressor requirements. The reliability of the compressor type and the utility requirements associated with the compression needed to achieve
the operating pressure must be carefully considered in relation
to the location of the small-scale GTL facility.
Syngas composition. The syngas composition produced by
the natural gas reformer largely depends on the technology selected in combination with the feed gas composition. What is
of importance to the downstream process is the H2:CO ratio
in the syngas. If the H2:CO ratio does not match the downstream process requirements, then the H2:CO ratio will have
to be changed during syngas conditioning. The H2:CO ratio
increases with decreasing outlet temperature and increasing
steam-to-carbon ratio in the feed to the natural gas reformer:
non-catalytic partial oxidation (approximately 12) < autothermal reforming (approximately 24) < steam methane reforming (approximately 35).
Syngas conditioning. The syngas produced by natural gas
Alpha-values
0.65 (mole)
0.80 (mole)
0.90 (mole)
0.95 (mole)
0.65 (mass)
0.80 (mass)
0.90 (mass)
0.95 (mass)
30C360C
boiling range
10
20
30
40
50
60
Carbon chain length
70
80
90
44JULY/AUGUST 2014|GasProcessingNews.com
100
conditioned syngas feed used for FT synthesis. Syngas conditioning involves one or more of the following three steps:
Condensation and recovery of water from the raw gas
Separation and recovery of some or most of the CO2
from the raw gas
Water-gas shift conversion of the raw gas to manipulate
the H2:CO ratio of the raw gas.
Of these processing steps, only the condensation and recovery of water are always necessary, as well as beneficial. The
removal of CO2 and manipulation of the H2:CO ratio depends
on the requirements imposed by the gas loop design and the
technology selected for FT synthesis.
FISCHER-TROPSCH SYNTHESIS
FT synthesis is the process step that is responsible for converting the syngas into heavier products. The product obtained from
FT synthesis is a mixture of hydrocarbons, oxygenates and water.
The three most common organic compound classes that are produced are paraffins (Eq. 3), olefins (Eq. 4) and alcohols (Eq. 5):
n CO + (2n + 1) H2 r CnH2n + 2 + n H2O
(3)
n CO + 2n H2 r CnH2n + n H2O
(4)
(5)
(6)
Using the relationship shown in Eq. 6, it is possible to calculate the ASF product distribution that will be obtained from
FT synthesis with a known alpha value. The impact of choosing different alpha values on the resulting product distributions is illustrated in FIG. 3. The only two carbon numbers that
do not follow this relationship are C1 and C2. Normally, the C1
mole fraction is higher than predicted from Eq. 6, and the C2
mole fraction is lower than predicted from Eq. 6. The values for
C1 and C2 compounds are, consequently, not shown in FIG. 3.
Other subtleties affect the product distribution, as well, but the
ASF distribution is usually a good approximation of the carbon
distribution that is obtained during industrial operation.
The selection of the FT technology holds implications for the
upstream and downstream design of the GTL process. These implications will be discussed in terms of the key parameters that
can vary. Note: It is possible to create new FT technologies by
combining these parameters into different groupings. This is one
Fe-FT
Co-FT
Lower
Higher
Olen selectivity
Higher
Lower
Oxygenate selectivitya
Higher
Lower
High
Minimal
Catalyst cost
Cheap
Expensive
Lower
Higher
Catalyst lifetime
Months
Years
220C340C
190C230C
Lower
Higher
Deactivation
Deactivation
Product properties
Alpha-value
a
Methane selectivity
a
Catalyst properties
Operating properties
No effect
Deactivation
Deactivation
Deactivation
In addition to the implications that stem from the characteristics of the two catalyst types shown in TABLE 1, there are two
issues of common misconception:
CO2 footprint of Fe-FT vs. Co-FT. The net CO2 footprint of an FT-based GTL process is determined by the
reaction stoichiometry and energy requirements of the
process. The stoichiometry of FT synthesis, shown in Eqs.
35, is similar for Fe-FT and Co-FT catalysts. The main
difference between Fe-FT and Co-FT is the step in the
process where most of the water-gas shift conversion (Eq.
2) takes place. In the case of Fe-FT, water-gas shift conversion takes place in parallel with FT synthesis, but this does
not mean that Fe-FT has a larger CO2 footprint than does
Co-FT. The overall CO2 footprints for Fe-FT- and Co-FTbased GTL processes are similar.
Fe-FT catalyst lifetime. The reported catalyst lifetimes
for Fe-FT catalysts span a wide range. The catalyst lifetime is based partly on the operating temperature, as well
as on minimum acceptable activity and alpha-value. At
operating temperatures typical of high-temperature FT
synthesis processes (typically > 320C), catalyst lifetime is mainly determined by activity loss. However, at
lower operating temperatures, which are more typical of
low-temperature FT synthesis, acceptable activity can be
maintained for much longer, but at the expense of a slight
decrease in alpha-value (i.e., lower wax selectivity) and an
increase in olefin content of the product. For small-scale
GTL applications that aim to produce oil or fuels, catalyst
lifetimes in the order of a yearand possibly longer
can be anticipated.
FT operating conditions. The operating temperature is the
most important of the operating conditions to select. The selectivity profile of FT synthesis is sensitive to the operating temperature, especially for Co-FT, which has a narrow operating
window compared to Fe-FT (TABLE 1). An increase in operating
temperature leads to a decrease in alpha-value. The implications
associated with changes in the alpha-value have already been
discussed. Generally speaking, higher operating temperature
disqualifies Co-FT and places more emphasis on the need for
an oligomerization process downstream from FT synthesis.
Low-temperature FT
with alpha-value of 0.90
240C
25C
2 MPa
0.1 MPa
Vapor
Organic
Organic
liquid
and
water
vapor
Aqueous
product
Organic
liquid
High-temperature FT
with alpha-value of 0.65
320C
25C
2 MPa
0.1 MPa
Vapor
Organic
and
water
vapor
Organic
liquid
Aqueous
product
Solid
wax
46JULY/AUGUST 2014|GasProcessingNews.com
PRODUCT RECOVERY
The product from FT synthesis at ambient conditions consists of gaseous compounds, an organic oil phase, a solid wax
phase (when the alpha-value is high) and an aqueous phase that
contains dissolved short-chain oxygenates (FIG. 4). The relative
amounts and the composition of each product phase depend
on the nature of the FT synthesis and the conditions of product
recovery. The product from FT synthesis is not a single-phase
hydrocarbon oil, and although product recovery seems like a
simple matter of condensation and phase separation, the vaporliquid-liquid equilibrium is complex.
Orbits
Time snapshots
Trending
3D waterfalls
for possible inclusion in a small-scale GTL design: olefin oligomerization and wax hydrocracking. The relative need and importance of each is a consequence of the FT technology selection and, in particular, the alpha-value of FT synthesis.
Olefin oligomerization. The importance of olefin oligomer-
(7)
Luckily, most olefin oligomerization technologies are fairly robust and well suited for small-scale implementation. In the context of a small-scale GTL facility, it is preferable to select an oligomerization technology that has the following characteristics:
Feed flexible. It is necessary for the oligomerization
process to be effective with a range of feed compositions.
The implication of selecting a technology with limited
feed flexibility is that changes in the alpha-value of the FT
catalyst will hamper the efficiency of light olefin recovery.
Moderate operating temperature. The oligomerization process should not require feed preheating beyond a
temperature that can be provided by the steam generated
from cooling the FT reactor. Furthermore, oligomerization is thermodynamically favored by low temperature.
The implication of selecting a technology with more
onerous preheating requirements is that a fired heater will
be required. Fired heaters are both expensive and bulky.
High selectivity to heavy naphtha and distillate. The
objective is to recover the light olefins by converting them
into liquid products. Ideally, most of the olefinic product
should be heavy enough to be easily recoverable by condensation. The implication of selecting a technology that
favors dimerization is that some products will be in the
light naphtha range, which is more difficult to recover.
High once-through liquid yield. The olefin oligomerization technology must be able to convert the olefins efficiently, even at low olefin partial pressure in the gaseous
feed. The implication of poor conversion at low olefin
partial pressure is a decrease in overall process efficiency
and profitability.
Product quality. Depending on the intended market,
some olefin oligomerization processes may produce better-quality products that can be sold as blending components. Although this will increase the logistical complexity of the operation, there might be sufficient economic
incentive to do so.
Wax hydrocracking. Despite the prevalence of wax hydrocrackers in large-scale GTL facilities, it is not a technology
that is easy to implement on a small scale. The need for a wax
hydrocracker is the consequence of the decisions to make use
of a high alpha-value FT technology and to produce a liquid
48JULY/AUGUST 2014|GasProcessingNews.com
TAKEAWAY
The development of small-scale FT-based GTL facilities is
an exciting future prospect. These facilities will likely be very
different in design to their larger-scale counterparts.
Technology decisions associated with the processing steps
in small-scale GTL facilities have many implications. By pointing out the implications of design decisions, which transcend
unit boundaries, the selection and integration of commercially
available technologies can be optimized to produce more efficient designs.
Here, the absence of recommendations related to the technology decisions is deliberate. It underscores the interrelatedness of the technology decisions and emphasizes the message
that it is inadvisable to make such decisions in isolation. GP
ARNO DE KLERK is a registered professional engineer in
Alberta, Canada, with around 20 years of experience in FischerTropsch-based gas-to-liquids and coal-to-liquids conversion. He
spent around 15 years working for Sasol in South Africa, where
he was the technical manager of its Fischer-Tropsch Refining
Catalysis group. In 2009, he relocated to Canada to take up a
position in the Department of Chemical and Materials
Engineering at the University of Alberta, where he is the Nexen Professor of
Catalytic Reaction Engineering. He consults globally on topics related to carbonbased conversion processes. His publications include monographs on different
aspects of the Fischer-Tropsch process in addition to various papers.
plantscan be constructed close enough to natural gas supply and closer to customers that need energy.
The rise of the micro-plant. Large LNG infrastructure projectsoffshore platforms, production facilities, terminals and
pipelinescost billions of dollars. They entail complex and
sometimes politically fragile coalitions of exploration and production (E&P) companies, government entities and lenders.
Almost always, the engineering contractor is billing time and
materials (T&M) on a project that could take a decade from
conception to commissioning.
Because of their size, smaller-scale LNG plants present an attractive economic proposition, if construction budgets are well
managed (FIG. 1). Developers of smaller LNG facilities typically
plan to spend between $50 million and $200 million upfront.
Most are already familiar with the technologies available to
purify and liquefy natural gas; frequently, they have already selected one and secured a site for the facility by the time they
commit to an engineering contractor. Most likely, they already
know where they can sell the LNG once it is processed, and may
even have a contract. Developers will also have forecast capital
costs and return on investment (ROI).
Investors and facility owners interested in developing purpose-built micro-scale and small-scale LNG plants for transportation fuel requirements or for high-horsepower uses in oil
or gas production must forecast profitability to establish their
Regulatory and
permitting
Equipment
delivery
Availability
of utilities
Project
protability
(ROIC)
Technology
specications
Feedstock
quality
Limited
suppliers
Force majeure
(weather)
Subcontractor
performance
Logistics
50JULY/AUGUST 2014|GasProcessingNews.com
greenhouse gas more potent than CO2 , and its emission has
recently become a significant environmental concern. Controlling emissions during production and transportation is becoming more important.
Challenges also arise during plant construction, due to unforeseen design modifications, scope changes, inaccurate or
incomplete materials specifications, the incompatibility of key
process components, and the execution risks inherent to any
technology construction project. All of these risks interfere with
timely project completion and can affect the timeline for ROI.
Modeling risks to manage outcomes. A comprehensive tech-
Feedstock availability
Feedstock price and supply
Regulatory and permitting
Engineering resources
Fire dept. requirements
FERC permissions
Utilities supply
Vendor information
availability
Timely decision-making
Procurement
Shortage of equipment
suppliers
Logistics
Construction
Commissioning
Experience of operators
Construction permitting
Rework
Both waste streams will have a higher concentration of total dissolved solids (TDS) than the available water source. Depending on that concentration and the water quality of the waste
stream, local regulations may allow discharge into storm-water
ponds or injection into the ground. In a worst-case scenario, water may have to be piped or trucked offsite. In this case, a process
design that calls for the use of a cooling tower would not be costeffective, and an alternative design should be considered.
Highway access and condition. Once an LNG plant is up
and running, tanker-truck traffic places continual demand on
transport infrastructure: roads, bridges, and viaducts. At an
LNG plant producing 100,000 gallons per day (gpd), operators can expect 10 to 14 tanker trucks to arrive at the facility,
load, and leave on a daily basis. A fully loaded tanker weighs
65,000 lb to 80,000 lb; this means significant stresses on roadways and bridges.
Especially in less-developed rural areas, infrastructure may
not be able to sustain this continual loading. Securing an operating or use permit from the local municipality or county may
require the LNG plant owner to invest in road upgrades or maintain a budget for yearly maintenance. The closer the facility is to
major highways, the smaller this investment could be.
Layout and process design variables. Examining variables
that can affect a projects cost and the timeline for successful
completion is not a linear or sequential process. Instead, engineering feasibility reviews inform the developer/owners financial planning, modeling should be performed during the first
few months of design development, and the technical risk model
should be used as a reference and be updated as work continues.
By preparing a layout and site plan, developers and their engineering consultants can use them as a basis/input for the modeling; the results offer management guidance about whether design changes are required. Once changes are implemented, the
models can be adjusted to confirm compliance with standards
and regulations.
Determining what cryogenic process will be optimalnitrogen cycle, mixed-refrigerant, or another processis a vitally
important early decision. However, process design is also the single-largest variable in ongoing operations cost. The purity, supply volume and pressure at which the feed gas supply is delivered
are critical. Often, pretreatment processes are necessary, and, in
some circumstances, source pressure needs to be adjusted with
the supplier to deliver the requisite volume.
Other considerations also affect design, construction and
permitting time, as outlined below.
Cooling system. Process cooling can be accomplished via
evaporative coolers (cooling towers) or air coolers. A typical air
cooling system uses a bank of centrally located air coolers to cool
a water/glycol stream that is used to provide cooling to all users. Alternatively or in combination, air coolers can be used to
directly cool the process stream (FIG. 4).
Air coolers are easier to secure permits for and do not require
water makeup or handling purge waste streams. Water cooling,
using evaporative coolers such as cooling towers, provides more
efficient cooling but requires makeup water supply and disposal
of purge streams. Given the scarcity of water in many of the regions where natural gas is sourced and processed, it can be difficult to secure permits for systems with high water consumption.
Evaporative coolers may also emit contaminants into the atmosphere and may require an air emissions permit. In addition,
operating an evaporative water cooling system requires operators to budget for chemical additives and keep close watch on
water chemistry.
Process heat. Process heating is required for the amine reboiler and for regenerating the adsorption capacity of the molecular sieve(s). Both fuel-based and electric heat are technically
feasible, but heating requirements differ based on plant size and
production method.
For larger systems, developers should consider a central fuelfired hot oil heating system, although a fire tube or hot oil heater
may create emissions that, in turn, pose permitting challenges.
For other systems, developers can plan on a feed gas-supplied
fire tube or electric heating. The installed cost of an electric
heating system is higher, but it is simpler to operate and maintain and easier to permit.
Process water. Water is required for the amine system that
removes hydrogen sulfide and carbon dioxide from the feed gas,
and to supply makeup water to the evaporative cooler system.
The extent of water treatment required is a function of the quality of the feed water. Possible treatment can include water softening, reverse osmosis or demineralization.
Nitrogen supply. Nitrogen is used for purging and makeup in
nitrogen-based cryogenic liquefaction systems. Nitrogen can be
transported to the plant by tanker truck, and it can be stored in
liquid form at pressure, or it can be generated onsite using a nitrogen generator. Some plants do both, allowing operators to supplement supplies based on the nitrogen consumption of the plant.
Operation and maintenance access. An LNG plant resembles a small gas processing plant more than it does a petrochemical refinery unit, and the plants footprint is typically limited to
reduce overall cost. Equipment is packaged and erected on skids
to the maximum extent possible, and interconnecting pipe is run
along pipe sleepers, which require stiles for operator access/mobility within the plant. This means access to equipment is often
limited to one of its sides. Maintenance considerations are not
too different from those at natural gas plants: For example, providing access to a crane for the removal of heavy equipment (e.g.,
compressors), and providing an area that allows operators to pull
tubes from heat exchangers.
Pressure drop. Feed gas travels from pretreatment to liquefaction to storage to loading. The longer the lines, the greater
the pressure drop, which, in turn, affects power consumption
and correlates to operating cost. Engineering design must,
therefore, strive for the optimal balance between compactness
and efficiency on one hand, and access and safety considerations on the other.
Of particular importance in LNG plants are the net positive
suction head (NPSH) requirements for the LNG line between
the storage tanks and the loading pump, and the goal of minimizing expensive cryogenic lines from cold box to storage and from
storage to loading.
LNG storage tank. Storage requirements will be derived
from the specific objective of the plants construction: To whom
the LNG will be sold and supplied, and with what frequency
the customer plans to order it. Some plans call for peakshaving,
which demands a higher capacity for long-term storage as well
as proportionally larger valving, pumping and offloading capac-
ity. For storage capacity of greater than 500,000 gal, a single flatbottomed tank may be more cost-effective and require a smaller
footprint than multiple bullet-type freestanding tanks.
Regulatory and environmental considerations. A number of permitting considerations also exist for developers and
owners. Air permitting and wastewater treatment requirements
differ significantly by jurisdiction, with some states and regions being more attractive to industry than others. Proposed
developers and facility owners should conduct a preliminary
site review, and the engineering and financial feasibility study
should acknowledge and address the specific requirements for
new construction and/or any proposed expansion. Owners/developers will want their legal and/or environmental advisors to
determine which agency will take the lead on permitting in their
jurisdiction, and will want early on to establish a list of permits
they will require.
NFPA and DOT requirements. Depending on a plants
proposed capacity, both National Fluid Power Association 59A
and Department of Transportation Code of Federal Regulations
Title 49, Part 193, have standards and regulations for its design.
Both require gas dispersion and radiation studies to verify that
conditions comply with regulations and consider terrain, ambient conditions, wind patterns and equipment arrangement to
determine gas concentration and radiation levels at a propertys
fenceline. The single most common reason for increasing the
size of the property is the result of these studies.
Emergency egress. Any engineering firm undertaking EPC
scope for an LNG facility must consider how to ensure safety
for operating personnel while servicing different processing
units, as well as to anticipate regulatory requirements. Although
spacing requirements established by OSHA will be incorporated into the design, other factors may increase a plants required
footprint. For example, the local fire department may require a
perimeter road for access/egress. These and other factors could
affect project cost.
erations affect project execution risk in developing a smallto mid-sized LNG plant. While managing financial risk falls
strictly within the purview of the developer/investor, technical and engineering risks can impact financial projections, and
must be factored in.
In conducting feasibility analyses, risks can be identified before project inception, costs can be anticipated and/or funds reserved for contingencies, and, importantly, certain types of risks
can be addressed and eliminated. It is important to remember,
however, that these variables do not occur sequentially; each
should be considered concurrently, as part of an engineering
study that helps the economic analysis team to model outcomes
based on different selections.
Investors looking to realize returns from LNG developments
will, therefore, want to look to process engineering contractors
with an established project management approach, a holistic awareness of various risks that can affect profitability, and
the ability to develop accurate cost estimates before breaking
ground on new projects. Such a provider should be able to impart experience in process design; in mechanical, civil, and electrical engineering and other technical disciplines; in materials
supply and technology procurement; and in the construction
and operation of similar process plants.
Advance design planning helps ensure successful execution,
and total installed cost can be better predicted once variables
are assessed. As the project moves forward, the developers and
engineering firms integrated business and project execution
risk model can be used as a baseline for monitoring and addressing risk and cost on an ongoing basis. In this way, a turnkey EPC
provider can protect investors and developers ROIs. GP
54JULY/AUGUST 2014|GasProcessingNews.com
Padding gas
PC2
H
L
To BOG header
LC
To HP pumps
valve, which regulates the flow of BOG to the packedbed section. If the BOG compressors discharge pressure
becomes too low to guarantee sufficient NPSHrequired
for the HP pumps, then PC1 will introduce padding gas
from the HP natural gas system or fuel gas system.
PC2 is a split-range controller that maintains the
pressure in the annulus of the BOG recondenser.
Even in the annular space, there will be some
recondensation of BOG into the LNG at the interface.
Therefore, to maintain pressure, some BOG must
be fed into the annular space. On the other hand,
ambient heat in-leak generates BOG, counteracting the
above process. There is a need for split-range pressure
control (i.e., bringing in BOG or venting to the BOG
compressor suction head, as required). When the
pressure rises, this controller will first close the control
valve on the incoming BOG that bypasses the packed
bed. Then, when the pressure rises further, PC2 will
open the control valve to the LP BOG head upstream
of the BOG compressors.
The control characteristics of both pressure controllers are
depicted in FIG. 2.
Example 2. To maintain both the correct pressure control (FIG. 3) of the annulus pressure and the NPSHrequired for
the HP pumps, transmitters connected to the annular space
provide an input to three pressure controllers to deal with low
(PC1 ), medium (PC2 ) and high (PC3 ) pressure conditions:
0%
(closed)
100%
0%
lve
t va
e
arg
sch
r di
sso
pre
ve
val
as
Com
ass
gg
50%
Controller output, %
(controller direct acting)
Valve
position
%
PC2
Byp
din
0%
(closed)
0%
Pad
Valve
position
%
100%
(open)
PC1
Ven
100%
(open)
50%
Controller output, %
(controller direct acting)
100%
Padding gas
DPC
H
L
To BOG header
LC
To HP pumps
56JULY/AUGUST 2014|GasProcessingNews.com
described so far include LNG flow through the BOG recondenser packed section. At high LNG terminal sendout rates,
this can result in a continuous recycle of padding gas from
downstream of the LNG vaporizers to maintain pressure in the
BOG recondenser, since the LNG sendout rate is significantly
higher than that required to recondense all generated BOG.
This operation is not energy efficient; therefore, some annular space type designs have introduced an LNG inlet into
the holdup section. This reduces the BOG/LNG ratio in the
packed-bed section and minimizes the requirement for padding gas. The downside is that it influences the effectiveness of
the auto-regulating effect (when level is maintained predominantly below the packed bed), compared to a BOG recondenser without a bottom inlet.
Some of these annular space BOG recondenser designs have
introduced ratio control for the ratio of LNG to the packed
bed and BOG. The balance of the LNG goes directly into the
holdup section of the BOG recondenser. Since BOG and LNG
compositions and temperatures can change, the pressure in the
BOG recondenser packed section is a result of the setpoint of
the BOG/LNG ratio controller.
FIG. 5 shows the described level and ratio control scheme.
The installation of a bottom LNG inlet that is controlled by
level can influence the effectiveness of the auto-regulating effect, which is the main feature of the annular space type design.
The selection of an annular space BOG recondenser should,
therefore, be reconsidered.
trol for this type are depicted in FIGS. 2 and 5 of Part 1. Similar
to the annular space type, this BOG recondenser receives BOG
from the BOG compressors for recondensation, and it also
provides holdup and NPSHrequired for the HP pumps.
For the top packed-bed section BOG recondensers, the liquid level is normally below the bottom of the packed bed. As
such, the heat transfer area constantly allows for a simple and
proven pressure control scheme. To control the BOG recondenser pressure, only some of the LNG is routed to the packed
bed, with the balance of the incoming LNG being routed directly to the bottom holdup section. This type of BOG recondenser requires two LNG inlets.
Pressure control. The main objective of the pressure control
is achieved by the flowrate of the subcooled LNG from the bottom LNG inlet line to the packed section, to keep the BOG
recondenser at a pre-set operational pressure. This control enBOG from compressors
PC1
Padding gas
PC2
To BOG header
LIC
FY
LIT
H
L
H
L
LIT
To HP pumps
Padding gas
FRC
DPC
FI1
PC2 PC1 PC3
LNG from
LP pumps
H
L
To BOG header
LC
To HP pumps
ables stable HP pump and BOG compressor operation. Output from the pressure controller is cascaded as setpoint to the
LNG quench (LNG to packed bed) flow controller.
If the pressure increases, then more LNG is routed to the
packed bed, reducing the pressure and preventing the opening of
the connection to the BOG compressor suction head. If the pressure decreases, then the pressure controller will increase the LNG
flowrate via the quench flow controller, to prevent the opening of
the padding gas supply. With this type of BOG recondenser, it
is easy to adjust the operating pressure of the BOG recondenser
(typically between 6 barg and 10 barg) in LNG operations.
When no quench flow controller or flow measurement is
provided, the pressure controller can directly act on the quench
flow valve. A cascade configuration provides more stability with
respect to change in flow, which will be picked up directly by
the flow controller before it affects BOG recondenser pressure.
BOG from compressors
FI2
Padding gas
>
FRC
FY
DPC
FI1
H
L
LNG from
LP pumps
To BOG
header
LC
To HP pumps
Padding gas
SP
X
FX
PC2
PC3
To BOG header
PIT
FC1
LNG from
LP pumps
H
L
LC
FC2
To vaporizers
HP pumps
58JULY/AUGUST 2014|GasProcessingNews.com
LNGtoBOGmassratio = UncorrectedRatio
BOGTCorrection LNGTCorrection
(2)
ActualVolLNGtoBOGmassratio =
LNGtoBOGmassratio / LNG
(3)
ActualVolFlowLNG = ActualVolLNGtoBOG
massratio BOGmassflow
(4)
Padding gas
FI2
PC2
To BOG header
FRC
PC1
FI1
LC
H
L
LNG from
LP pumps
To HP pumps
Padding gas
FI
x
FX
SP
>
PC2
FY2
PC3
To BOG header
PC1
FC1
Padding gas
FI2
FRC
H
L
LNG from
LP pumps
>
FY
LC
<
FY1
FI1
PC2
LNG from
LP pumps
PC1
PC3
To BOG
header
PC4
FC2
To vaporizers
HP pumps
Surge line
Operation point 2
Surge points
Operation point 1
Speed 2
Speed 1
Stonewall
points
NEW FSRU IS AN
ECONOMIC BOON
Construction of the new LNG regasification plant, GNL del Plata (FIG. 1), is the
first step in Uruguays energy policy to
2030. The goal is to achieve energy self-sufficiency over the next decade by increasing
Uruguays energy matrix to include 50%
non-subsidized renewable energies, and
by decreasing oil imports (TABLE 1). The
GNL del Plata regasification plant, which
required an investment of $1.1 billion (B),
will generate 10 million cubic meters per
day (MMcmd) of natural gas. Half of this
volume will be used for internal consumption, and the rest will be exported.
Several direct economic benefits will be
gained from the new regasification plant:
A decrease in the cost of generating
electricity by substituting natural gas
for gasoline
Increased profits for Uruguayan oil
company ANCAP for transportation
and distribution of natural gas
A decrease in the price of natural gas
for domestic users, both residential
and commercial
Increased revenue for the government.
At the beginning of October 2013,
GDF Suez signed a build, own, oper-
PROJECT PROGRESS
Until the new FSRU is delivered at the
end of 2016, the GDF Suez ship Neptune
(FIG. 3) will be used for the temporary
regasification of LNG, which will allow
commercial activities to begin at the terminal in 2015.
The other components of the new terminal are a receiving unit for the storage
and regasification of LNG, an underwater gas pipeline that will unload gas to the
onshore terminal, the gas transfer station,
and a pipeline that will move the gas to
the junction with the already existing
Cruz del Sur gas pipeline, which connects to Argentina.
TABLE 1. Primary energy matrix
for Uruguay, 2011 and 2016
2011,
actual
2016,
forecast
Oil
53%
39%
Hydroelectric
13%
14%
Biomass
13%
10%
Wind energy
5%
7%
Natural gas
2%
5%
Imported electricity
1%
Bioelectricity
5%
Bioheat
15%
Biocombustibles
3%
Solar
2%
Energy type
FIG. 1. General map of the new FSRU vessel. Image courtesy of Gas Sayago.
Gas Processing|JULY/AUGUST 201461
Regasication capacity
70 Mcm190 Mcm
PROJECT SPECIFICATIONS
The major providers of LNG in the Atlantic region are Uruguay, Nigeria, Equatorial Guinea, Angola and Trinidad and
Tobago. However, Marta Jara, the general
manager of Sayago Gas, does not discount
buying LNG from Middle Eastern producers such as Qatar, Yemen, Abu Dhabi,
Libya, Algeria, Egypt and other countries.
Major domestic demand for natural
gas will come from electricity-generating
companies. Gas will complement other
renewable energy sources being developed in Uruguay in accordance with Uruguays energy matrix plan to 2030.
To meet these goals, a combined-cycle
turbine will be used, which burns gas and
produces electricity, and also uses the
generated heat to create water vapor that
will move a third turbine, which will also
produce electricity. Additional demand
will come from the residential, industrial
and commercial markets. Natural gas will
also be used in the transportation market
to move passengers and cargo, on land as
well as by water. These secondary markets
have been unable to develop in the past
due to the scarcity of natural gas in the
country. Uruguays total gas consumption
should increase to 4.6 MMcmd, which
means there will be an excess of 5 MMcmd available for export markets.
According to the preliminary business
plan drafted by the Ministry of Energy
REGASIFICATION OPERATIONS
Once the LNG ship reaches the regasification terminal, the LNG is transferred via pump to the FSRU. The facility
contains a regasification unit to convert
LNG to its gaseous state. The regasification facility sources water from the Rio
de la Plata. There is a large difference in
temperature between the LNG, which is
stored at 162C, and the river water. The
process by which heat is exchanged never
allows the LNG to come into direct contact with the river water.
The water, which cools during the process of regasification, is returned to the
river at a distance from the degasification
facility, so as not to affect the overall temperature of the river. The returned water recovers its temperature rapidly. During peak
demand, one LNG ship will arrive every
month and will be docked while the LNG
is offloaded over a period of 24 hours. GP
is based on publicly held MLPs, he explains. The activity is fueled by the MLP
investor market, which is showing value
that comes from economies of scale, and
which is being rewarded by the market
through premium valuation (TABLE 1).
Players that have scale and exposure
to multiple basins are being rewarded
by the markets, both from a financing
perspective, through cheaper debt, and
from an investor perspective, due to liquidity in the equity, Feng says. That
will be something that may drive more
of those conversations.
CrosstexDevon merger. One of the
more significant mergers of 2014 occurred on March 10, when Crosstex Energy Inc. officially merged its assets with
Cana-Woodford
Ohio River Valley
OKLAHOMA Arkoma-Woodford
Utica
OHIO
Permian basin
WEST VIRGINIA
LOUISIANA
Barnett shale
TEXAS
Haynesville and
Cotton Valley
Austin Chalk
Marcellus
PENNSYLVANIA
Tuscaloosa Marine
Miocene-Wilcox
Eagle Ford shale
Processing
Processing and
fractionation
Fractionator
Condensate stabilizer
Brine disposal well
Rail terminal
Barge terminal
Storage
Crude and brine
truck station
Bearkat Gathering
PNGL-Cajun Sibon Pipeline
PNGL System
ORV Crude Pipeline
Howard Energy
Cana Gathering
Arkoma Northridge Gathering
LIG System
FIG. 2. Crosstex Energy Inc. merged its assets with Devon Energy Corp., creating a new company
called Enlink Midstream LLC.
Gas Processing|JULY/AUGUST 201463
TABLE 1. Stock values for gas gathering and processing MLPs and general partners1
NYSE ticker
symbol
Stock price,
US$
Market cap,
US$
Float adjusted
market cap, US$
Yield,
%
Trailing 30-day
average volume
ACMP
63.40
12,779
5,766
3.63
424,835
AMID
29.23
505
293
6.33
55,742
APL
33.40
3,154
2,485
7.43
411,071
Atlas Energy LP
ATLS
42.50
2,188
2,062
4.33
587,313
CEQP
14.86
2,769
1,573
3.70
372,772
CMLP
21.96
4,127
3,099
7.47
463,958
DPM
55.22
5,711
4,615
5.40
278,619
ENBL
24.21
10,064
605
4.75
361,451
ENLC
41.94
6,858
1,835
1.72
242,890
ENLK
31.77
7,281
2,903
4.53
484,214
FISH
20.00
356
143
7.10
41,266
Company
MEP
21.45
970
455
5.83
118,472
MWE
64.97
11,301
10,175
5.36
969,692
NGLS
68.29
7,675
6,764
4.47
257,034
QEPM
24.89
1,329
572
4.34
57,518
RGP
29.01
10,549
8,514
6.62
868,252
SMLP
45.59
2,439
654
4.39
44,837
SXE
18.82
668
368
8.50
102,307
TRGP
120.40
5,077
4,519
2.15
253,167
WES
74.69
8,808
4,995
3.35
124,388
WGP
52.63
11,521
1,009
1.90
78,918
WMB
47.68
32,633
32,516
3.57
4,578,564
Williams Partners LP
WPZ
52.99
24,598
8,430
6.83
564,269
1
2
of the Permian basin. Although the merger is a recent event, it has been a long time
coming, says Feng.
Crosstex attempted to get a transaction done with Devon two previous
times, and the third time was the charm.
Crosstex had a relationship with Devon
on the producer side. Certainly, Devon
had its own midstream footprint before
it was transformed into EnLink, but the
deal was driven by the fact that the companies had a previous relationship.
Feng and the analysts at Alerian have
seen a similar level of interest across
other platforms, such as Williams Companies taking a general partnership into
Access Midstream, which was formerly a
Chesapeake business.
Williams Companies. Last year, Williams completed its investment in previ-
TABLE 1. Stock values for gas gathering and processing MLPs and general partners1 (cont.)
Most recent quarterly
dividend, US$
General partner
Tax
Type2
IPO
Oklahoma City, OK
K-1
LP
7/28/10
0.5750
Denver, CO
K-1
LP
7/26/11
0.4625
Pittsburgh, PA
K-1
LP
1/28/00
0.6200
Atlas Energy LP
Pittsburgh, PA
K-1
GP
7/20/06
0.4600
Management
Houston, TX
K-1
GP
7/25/01
0.1375
Houston, TX
K-1
LP
12/15/11
0.4100
Denver, CO
K-1
LP
12/01/05
0.7450
Oklahoma City, OK
K-1
LP
4/10/14
0.2875
Dallas, TX
1099
GP
1/12/04
0.1800
Dallas, TX
K-1
LP
12/11/02
0.3600
Houston, TX
K-1
LP
7/25/13
0.3550
Houston, TX
K-1
LP
11/06/13
0.3125
Englewood, CO
K-1
LP
5/20/02
0.8700
Management
Houston, TX
K-1
LP
2/08/07
0.7625
Denver, CO
K-1
LP
8/08/13
0.2700
Dallas, TX
K-1
LP
1/30/06
0.4800
Dallas, TX
K-1
LP
9/27/12
0.5000
Dallas, TX
K-1
LP
11/01/12
0.4000
1099
GP
12/06/10
0.6475
Houston, TX
The Woodlands, TX
K-1
LP
5/08/08
0.6250
The Woodlands, TX
K-1
GP
12/06/12
0.2500
Tulsa, OK
1099
GP
10/23/57
0.4250
Tulsa, OK
K-1
LP
8/17/05
0.9045
66JULY/AUGUST 2014|GasProcessingNews.com
Fort McMurray
Rocky Mountain
Foothills
Redwater
Powder River
San
Joaquin
Opal
Uinta-Piceance
Willow Creek
Echo Springs
Appalachian
Denver
Parachute
Conway West
Conway East
Paradox
Mitchell
Conway
Chemical plant
Gulf olens
Milagro Ignacio
Cherokee
Fractionator*
Laurel Mountain Midstream
Kutz
Raton
Platform
Gas plant
Overland Pass pipeline
San Juan
Anadarko
Arkoma
Offshore platform
Northwest pipeline
Ardmore
Underground storage
Ohio Valley Midstream
Marietta
Susquehanna supply hub
Piceance
TX-LA-MS
Fort
Canada
Purity pipelines
Permian Worth
Salt
Port Allen
Discovery*
Southwest Wyoming
Marfa
Mobile Bay
Western
Four Corners area
Transco
Geismar
Paradis Canyon Station
Gulf Markham LaRose
East Gulf Coast
Wamsutter
West Gulf Coast
ACMP**
Devil's Tower
Gulfstream*
Blue Racer**
GI 115
GA A244
*Partially owned **Partially owned and not operated by Williams
year, Keyera Corp. entered into an agreement with Whitecap Resources Inc. to
68JULY/AUGUST 2014|GasProcessingNews.com
Complete portable
emissions analyzer
www.E-Inst.com
www.ametektip.com
Analyzer
continuously
measures
hydrocarbons
GOW-MAC Instrument
Co.s Series 2300 total
hydrocarbon analyzer is a
2,300-microprocessor-controlled
instrument for continuously
measuring concentrations of
hydrocarbons. Using an optional
catalytic methanizer, it can
measure carbon monoxide and
carbon dioxide in gas streams.
The analyzer uses a flame
ionization detector (FID) where
ionized carbon atoms are
produced when burned in a
hydrogen flame. Ionized atoms
are detected and displayed as
parts-per-million (ppm) or partsper-billion (ppb) concentrations
on a high-resolution LCD
touchscreen. An accompanying
membrane keypad enables
straightforward navigation
through settings and functions.
The instrument operates on
either zero-grade hydrogen (H2 ),
a 40% or 60% H2 /nitrogen mix, or
a 40% or 60% H2 /helium mix. It
features auto ranging from 0 ppm
to 20,000 ppm; auto zero and
auto calibration; programmable
relays for concentration alarms,
events and diagnostics; electronic
flow control of air, fuel and
sample gas; real-time data
logging; a flame-out indicator
with auto shutoff of gases for
safety; an array of optional output
capabilities; USB and Ethernet;
and MODBUS and PROFINET
(read-only) communication
protocols. Samples can be
introduced by an optional internal
pump or by pressurized tanks.
www.gow-mac.com
www.newgateinstruments.com
www.xebecinc.com
System inspects
tank welds swiftly
As a result of interviews with its major shale play clients, AEREON developed its Quad-O Design Enclosed
Combustor (QDEC) as a solution to meet demands for an environmentally compliant line of combustors. The
QDEC is a completely smokeless system, offering quiet operation with no visible flame, reducing emissions to
comply with New Source Performance Standard (NSPS) Subpart OOOO.
The system does not require electrical, steam or assist gas utilities to achieve smokeless performance.
Also, with low power consumption and an optional solar-powered ignition panel with nine-day battery backup
support, the QDEC offers reliability in remote installations.
www.AEREON.com
www.applusrtd.com
www.protective.sherwin-williams.com
AL, AK, AZ, AR, CA, CO, FL, GA, HI, ID,
IN, IA, KS, KY, MI, MN, MS, MT, NE, NV, NM,
ND, OR, SD, TN, TX, UT, WA, WI, WY,
WESTERN CANADA
Ryan Akbar
Phone: +1 (713) 520-4449
Fax: +1 (713) 520-4449
E-mail: Ryan.Akbar@HydrocarbonProcessing.com
DATA PRODUCTS
Lee Nichols
Phone/Fax: +1 (713) 525-4626
E-mail: Lee.Nichols@GulfPub.com
70JULY/AUGUST 2014|GasProcessingNews.com
SALES OFFICESEUROPE
ADVERTISER INDEX
Catherine Watkins
Tl.: +33 (0)1 30 47 92 51
Fax: +33 (0)1 30 47 92 40
E-mail: Watkins@GulfPub.com
UNITED KINGDOM/SCANDINAVIA,
NORTHERN BELGIUM, THE NETHERLANDS
Michael Brown
Phone: +44 161 440 0854
Mobile: +44 79866 34646
E-mail: Michael.Brown@GulfPub.com
INDIA
Manav Kanwar
Phone: +91-22-2837 7070/71/72
Fax: +91-22-2822 2803
Mobile: +91-98673 67374
E-mail: India@GulfPub.com
JAPANTokyo
Yoshinori Ikeda
Pacific Business Inc.
Phone: +81 (3) 3661-6138
Fax: +81 (3) 3661-6139
E-mail: Japan@GulfPub.com
SEPARATION
ANXIETY?
(936) 788-1000
www.pentairseparations.com