Utilisation of High CO2- Content Flare Gas for Steam and Electricity Generation. Santiago Pástor Technical Manager PETROBRAS Ecuador December 2008

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1 Utilisation of High CO2- Content Flare Gas for Steam and Electricity Generation Santiago Pástor Technical Manager PETROBRAS Ecuador December 2008

2 Index 1. Palo Azul Power Plant Project 2. B18 Field - CDM PROJECT: Incorporate Additional Gas Supply -2-

3 1.- Palo Azul Power Plant Project -3-

4 Topics 1. Location 2. Background 3. Technology and Operation 4. Environmental Issues 5. Location 6. Economic Issues 7. Video 8. Conclusions -4-

5 1. Location -5-

6 Location Petrobras operates the Pata and Palo Azul fields in Block 18, located 300 Km. from Quito, the capital of Ecuador. Concession area: approximately 110,000 hectares. Location: Northeast section of the Ecuadorian Amazon Region, in the Province of Orellana. -6-

7 Location COLOMBIA EC UADOR VENEZUELA GUYANAS PERU BOLIVIA CHILE PARAGUAY URUGUAY BRASIL ARGENTINA Panoramic View of the Palo Azul CPF -7-

8 2. Background -8-

Background In 2006, the Central Processing Facilities (CPF) were built with a capacity to process 40,000 BOPD (28 API), 75,000 BWPD and 12 MMSCF with 77% CO2.

9 Background In 2006, the Central Processing Facilities (CPF) were built with a capacity to process 40,000 BOPD (28 API), 75,000 BWPD and 12 MMSCF with 77% CO2. A power generation demand of 12 MW, with a MW installed capacity, powered by provisional, portable diesel-fuelled reciprocal engines at a high fuel cost. Ecuador imports its diesel. -9-

10 Background GOR wells = 400; 12 MMSCFD/ (77% CO2) Technological alternatives were analyzed for the use and disposal of the gas from flares for generating electricity and optimizing operating costs. -10-

11 Background Analyzed alternatives : Combustible gas in Internal Combustion Engines. Gas in Gas Turbines. Flare Gas and/or crude oil in electricity generation with steam cycle. -11-

12 Background Technical-economic analyses determined that the combined steam cycle system is the best option for achieving: Reduction of environmental emissions and noise pollution Better use of flare gases Minimum gas treatment Substantial reduction of operating costs -12-

13 Background Alternative of a dual combustion engine implied: Limited operating window when gas quality decreases With full Load: 100% Maximum gas utilization: 30% Requires other fuel (diesel o crude oil): 70% More environmental emissions, particularly CO2-13-

14 Background Poor gas operational window: Dual combustion engine Diesel share % 0 Gas share % NOT APPICABLE OPERATING AREA P = 68% Fuel share 40% CRO 60%, GAS 40% No estimate on heat rate Fuel Sharing APPICABLE OPERATING AREA Transfer window Engine load% -14- P = 100% Fuel share 27% CRO 73%, GAS 27% No estimate on heat rate P = 100% CRO mode CRO 100%, GAS 0% Guaranteed heat rate 8539 kj/kwhr at 35 C

15 Background The project was developed using SGPMP-PRODEP (PETROBRAS) methodology PLANNING CONTROL PROJECT APROVAL PHASE 1 IDENTIFICATION AND EVALUATION PHASE 2 ALTERNATIVE SELECTION CONCEPTUAL PROJECT PHASE 3 DETAIL OF SELECTED ALTERNATIVE BASIC PROJECT PHASE 4 EXECUTION PHASE 5 OPERATION (1st year) Gate 1 Gate 2 Gate 3 Gate 4 Gate 5 DSP 1 DSP 2 DSP 3 VP 1 VP 2 FRONT END LOADING (FEL) Requirements for project definition DSP DECISION SUPPORT PACKAGE VP VERIFICATION PACKAGE -15-

16 Background APPLIED LAWS AND REGULATIONS: Ecuadorian Hydrocarbons Law, articles 11 and 24. Substitute Regulation of the Hydrocarbons Operations Regulation, articles: 11 and 13. Ecuadorian Water Act, article 82. General Rules for Applying the Water Act, articles: 13, 14 y

Background APPLIED LAWS AND REGULATIONS: Environmental Management Law, articles: 19 and 20. Environmental Regulation for the Electricity Industry, article 10.

17 Background APPLIED LAWS AND REGULATIONS: Environmental Management Law, articles: 19 and 20. Environmental Regulation for the Electricity Industry, article 10. Electrical Sector Regime Law, articles : 2, 3, 30 and 40. Regulation of Concessions, Permits and Licenses for the Provision of Electrical Power Services, articles: 5, 11, 12, 54, 55 and

18 Background GOVERNMENTAL APPROVALS: Authorization to use gas: DNH (National Hydrocarbons Office) resolution #683 of Nov,17th Authorization to use crude oil: DNH resolution #74 of 8/Feb/

19 Background GOVERNMENTAL APPROVALS: Authorization to use water: CNRH (National Council of Water Resources) resolution dated 29/Nov/2005. Environmental License: CONELEC (National Electricity Council) resolution #DE of 6/Nov/2006. Authorization Contract for construction, installation and operation: executed with CONELEC on 9/Nov/

20 3. Technology and Operation -20-

Technology and Operation System : 2 steam 6 MW turbogenerators and 1-5.38 MW motor generator. 12 MW net generation with gas, 17.38 MW installed capacity.

21 Technology and Operation System : 2 steam 6 MW turbogenerators and MW motor generator. 12 MW net generation with gas, MW installed capacity. Back up motor generator fuelled by crude oil or diesel for start up and auxiliary system. Hybrid System using all high CO2- content gas with no prior treatment, depending on required demand. -21-

22 Technology and Operation Boilers with cutting-edge gas-crude oil dual burners. All available gas calorific energy is used. (470 BTU/CF) Additional contaminant of gas emissions (CO2, among others) are avoided by not burning fossil fuels, such as crude oil, diesel or bunker. -22-

23 Technology and Operation Power Generation Plant Layout BOILERS STEAM TURBINES COOLING TOWER GAS FWKO + SRU 6 MW c/u TO BOILERS CRUDE OIL TO MOTOR CRUDE OIL TREATMENT MW MOTO-GENERATOR

24 Technology and Operation Water-Steam Cycle (Rankine Cycle) -24-

25 Steam Circuit Layout COOLING TOWER STEAM 200 PSIG STEAM 600 PSIG 750 F TURBINE Generator FLOW PUMPS CONDENSER BOILER DEAERATOR 25 PSIG FEEDWATER PUMPS WATER REPLACEMENT PUMPS -25- CONDENSER PUMPS DEMINERALISED WATER TANK OSMOSIS PURGE WATER TANK FILTERS WATER TREATMENT CLARITY WATER DRAIN PIT TO CPF

26 3-D View of Plant -26-

27 Panoramic View of Boilers Area -27-

28 Boiler Unit -28-

29 Crude Oil Generator Unit -29-

30 4. Environmental Issues -30-

31 Environmental Issues EMISSIONS OF THE BOILERS vs REQUIREMENTS DINAPAª 10,000 DINAPA: GOVERNMENT ENVIRONMENTAL OFFICE UNITS [mg/nm3] 1, NOx CO PM SOx CO2 11% O2 11% O2 DINAPA LIMIT GAS@11% O2 DINAPA LIMIT OIL@11% O2-31-

32 5. Economic Issues -32-

33 Economic Issues Project allows the use of 100% of flare gas for the steam cycle as thermal energy. The achieved results consist of a 90% reduction in equivalent energy expenses, 37% savings (OPEX). -33-

34 Economic Issues Year 2007: Power Generation with Diesel # USD / Kw-hr 0.15 Kw-hr Gall / day January February March April May June July August September October November December Energy Kw-hr Diesel Gall/day Unit Cost YEAR

35 Economic Issues Year 2008: Power Generation with Flare Gas Kw-hr Gall /day and BOPD USD / Kw-hr January February March April May June July August September October November December YEAR Energy Kw-hr Diesel and Oil Units Costs

36 6. VIDEO -36-

37 Video Existing Plant Video -37-

38 7. Conclusions -38-

Conclusions Flexible system, poor gas options, poor and rich gas or crude oil blends. Use of flare gas, no prior treatment required, only removal of liquids.

39 Conclusions Flexible system, poor gas options, poor and rich gas or crude oil blends. Use of flare gas, no prior treatment required, only removal of liquids. Reduction of 60 MTCDE/year. Possibility to use 100% of available gas (12 MMSCFD). Current use is 50%. Flexibility for adapting to future field requirements, depending on oil and formation water production. -39-

40 Conclusions Reduction of emissions compared to those of previous plant SO2 NOx CO MP EQUIP. (mg/m3) (mg/m3) (mg/m3) (mg/m3) Diesel Gen , Gas Boiler < 5 17 < 5 < 5 Reduction of noise from 115 to 88dB in turbines area. Immediate effects consisting of a 90% of energy savings and 37% of OPEX, approximately -40-

41 2.- B18 Field - CDM PROJECT: Incorporate Additional Gas Supply -41-

42 Gas avalability vs Power Demand Gas projection indicates continuing decrease in quantity: - Current 12 MMSCF vs.0.1mmscf (2022) Power demand increasing, expected peak of 23 MW in 2011 Future flare gas deficit in power demand peak: 3 MMSCFPD -42-

43 Project Generation Demand POWER GENERATION DEMAND MW Crude oil required= 1.6 MMBBLs Crude oil equivalent= 0.3 MMBBLs Total crude oil= 1.9 MMBBLs Years POWER GENERATION WITH GAS POWER GENERATION WITH CRUDE OIL POWER DEMAND PROJECTION (MW) -43-

44 Gas consumption GAS CONSUMPTION MMSCFPD Years AVAILABLE NET GAS REQUIRED GAS FROM OTHER FIELDS TOTAL NET GAS REQUIRED -44-

45 Objectives Gas purchase from nearby oil fields. Near future: Replace crude oil burning with gas burning. Expected savings aprox. 1.6 million barrels of crude oil in 14 years for the Block 18 oil field. Project development, currently status at Identification & Evaluation phase. -45-

46 Objectives Expected total savings of aprox. of 1.3 MMTCDE (not burning crude oil) during 14 years. Project meets CDM requirements Bonuses CER s are expected Project could be part of the Programatic CDM activities of Petrobras-PESA -46-

47 Thank You -47-

Note: This rule is effective on July 1, 2018, through June 30, 2019.

Note: This rule is effective on July 1, 2018, through June 30, 2019. RULE 3020 PERMIT FEE SCHEDULES (Adopted May 21, 1992; Amended July 16, 1992; Amended December 17, 1992; Amended August 21, 1997; Amended March 17, 1999; Amended June 15, 2000; Amended January 17, 2008;