A new technology conceived by a Danish company is offering revolutionary new clean-energy options to the Gulf Co-operation Council (GCC) as it grapples with a shortage of gas. In particular, it addresses the pressing conundrum of how to divert methane used for enhanced oil recovery (EOR) to more fungible uses.
Maersk Oil, a wholly owned subsidiary of the AP Moller-Maersk Group, operates 625,000 barrels of oil equivalent per day worldwide, aiming to turn marginal and challenging fields into commercial successes. Its talent for innovation became clear when it entered Qatar, where it has now been for over two decades. In 1992, it took over oil wells abandoned by Royal Dutch Shell, located at the Al Shaheen field, now said to be the largest producing oilfield in Qatar. Maersk Oil made its first pre-salt discovery in deepwater Angola in January 2012 at the Azul-1 well. It opened an office in Abu Dhabi in 2011.
The timing was appropriate. The UAE is perhaps the GCC’s most challenging hydrocarbons producer, finding itself an LNG importer even though it sits on formidable natural gas reserves, while at the same time struggling to produce new gas under a raft of subsidies and pricing conflicts. This has led to problems with EOR, as the gas for reinjection exists in insufficient quantities, throwing into relief the extent of the contradictions between its domestic and international gas commitments. The saga of the Shah gas field, from which international partner ConocoPhilips exited in 2010, is a case in point.
Maersk Oil says its new TriGen technology could produce 7% of the emirate of Abu Dhabi’s electricity within a decade, providing one of the answers to the its gas dilemma and taking pressure off the sorely overextended power generation sector – there are already fears that the additional power expected from its new nuclear facility in the west of the country by 2017 will not be sufficient. By producing clean energy, pure water and ‘reservoir ready’ CO2, through the burning of natural gas with pure oxygen, Abu Dhabi could make significant progress on a number of fronts using TriGen.
Power and production
A single TriGen unit costs US$400 million to set up. It can provide net electric power of 180 MW, 500,000 gallons of water a day and enhanced oil production of around 7,000 bpd. Pure water is produced without recourse to desalination, power is potentially abundant, while CO2 is deliverable in quantities that could replace the methane now being used for reinjection.
Maersk Oil explains: “The technology makes it possible to profitably combine oil and gas operations, clean power generation and carbon sequestration. It can also monetise low-quality gas streams. Maersk Oil, together with its partners, Siemens and Clean Energy Systems (CES), are developing commercial projects that will deliver CO2, power, water, steam and nitrogen value-streams from a single integrated solution.”
Senior manager Bob Alford is spearheading the drive to introduce the technology to the region – and because it owns around 7% of the world’s oil reserves, Abu Dhabi was a logical place to start. “Seven [TriGen] units could deliver 7% of the electricity required [by Abu Dhabi in 2023],” he explained. “The idea [is] to start small with one unit and then ramp up as confidence in the technology grows, but more importantly as the benefits of CO2 EOR are quantified in Abu Dhabi oilfields.”
As yet, no regional NOC has expressed interest in the technology, although discussions are thought to be ongoing in the UAE capital and elsewhere. Saudi Arabia’s high percentage of associated gas – which is dependent on oil production levels – does not pose challenges for TriGen, as the technology can use both associated and non-associated gas supplies.
Alford cites an industry paper by Advanced Resources International’s Michael Codec, to show that there is potential for an additional 18 billion barrels of oil recovery in Abu Dhabi through EOR using CO2 injection. “We need approximately 300 million barrels of original oil in place (OIP) for each [TriGen] unit. This is not recoverable oil barrels but the approximate reservoir size needed to operate a TriGen plant with full carbon capture and CO2 injection activities for 20 years,” said Alford.
Water is a particularly sensitive issue in the UAE, with Dubai obtaining over 98% of its potable water through desalination, according to Bloomberg. Statistics on Abu Dhabi’s water sources are difficult to obtain, although 2009 figures from the emirate’s Environmental Agency showed groundwater contributed 71.2% to total water demand, desalinated water 24% and treated wastewater 4.8%. However, “In the UAE, the water table has been dropping significantly over the last 10 years but has now been stabilised by strict control of water-well drilling,” added Alford.
The selection of technology partners with a reputation for quality and reliability was also important when beginning the TriGen project. “Siemens’ Torino, Italy, plant could produce 12 oxyfuel turbines per year. We chose them for their reputation for quality along with a strong track record in technology development,” said Alford. “They lend credibility to our solution with our customers. To promote clean energy development, the US Department of Energy (DoE) provided a US$30 million grant for building the first commercial-size machine based on a Siemens SGT-900 turbine. Bakersfield, CA, is the site for a TriGen [testing] plant operated by our partners, CES.”
He also sees opportunities to build on progress made by other technology providers in the region. One example is Elixier, the ADNOC-Linde JV set up to supply nitrogen gas to restore pressure at the UAE’s rich gas reservoirs. “The oxygen from Elixier’s Mirfa plants is classed as a waste product and is vented. As we can use this oxygen in our process, our system CAPEX drops and efficiency increases, thereby lowering the resultant CO2 price to [drive] the TriGen business opportunity here in Abu Dhabi. We could potentially build two of our systems with the surplus oxygen available,” enthused Alford.
In the long term, Maersk Oil believes that wholesale introduction of the technology could more than quintuple the final value of Abu Dhabi’s gas assets, by converting gas used for reinjection to gas exports, or even domestic use. “To replace the 2 billion cubic feet per day of gas injection with CO2 injection, we could install as many as 40 TriGen units in Abu Dhabi. That could also mean over 6 GW of clean electricity potential,” Alford said. “In order to maximise oil recovery, a large oilfield like Bu Hasa could require the CO2 equivalent from over 20 [TriGen] units due to its high reservoir pore space.”
TriGen would be very applicable in Iraq, Alford believes. Iraq has very low-cost gas, large oilfields which could benefit from CO2 injection and is short of electricity supply in several areas. “Down the road, it is an interesting market. Iraq may prefer first to develop its oilfields under conventional production schemes before introducing EOR but given fiscal terms that would incentivise EOR, it would be an excellent way to maximize oil recovery on these world-class fields,” he said.
Ultimately, Maersk looks set to be a pioneer in bringing such technology to the wider market. Establishing a foothold with TriGen in Abu Dhabi could be the beginning of a revolution in power generation, EOR and any production in future. It is for these reasons that Alford concludes: “We think we are ahead of the competition with what we have today, [namely] an efficient high-pressure, high-temperature oxycombustion process with over 15 years of technology development behind us to make the technology ready for the market.”