SPE Introduction to Exploration and Production : Field Development / Facilities Engineering

Field Development / Facilities Engineering What oil and gas facilities do How they work What the main issues typically encountered are

What Oil and Gas Facilities do Transport well fluids from the well to a processing facility Separate products (oil and gas) from waste streams (water, sand & other contaminants) Treat oil and gas to meet the sales requirements Treat waste streams to meet the disposal requirements (environmental) Deliver products to the market

What Oil and Gas facilities do Understanding “well fluids” The nature of the well fluids will be a significant factor in the design of the facilities Well fluids are a mixture of liquid & gaseous hydrocarbons, mixed with other gasses, water, sand and other contaminants Product specifications impact facility design and can vary significantly There is usually uncertainty in the composition and flow rates of the well fluids Light crude and gas condensates Oil sands. Heavy oil

What Oil and Gas facilities do Move well fluids to a processing facility - pipelines Land access (ROW / easement) Environmental impact (surveys) Design Flow assurance hydrates scales wax Chemical injection / insulation Geo-technical, environmental Pressure (flow) boosting Mechanical

What Oil and Gas facilities do Move oil and gas from wells to a processing facility

What Oil and Gas facilities do Separate products from waste streams Gas out Mixed gas / oil / water in Oil out Water out

What Oil and Gas facilities do Separate products from waste streams After simple separation products will still contain impurities Some well fluids are difficult to separate and require additional processing (e.g. heating / chemicals) Waste streams (water / sand) typically contaminated with oil Oil product may have % “BSW” specification (basic sediment and water)

What Oil and Gas facilities do Treat Oil : De-salt Water produced with oil is often saturated brine Salt damages refinery equipment and maybe deposited inside equipment causing blockages Fresh water is mixed with the separated crude oil Salt dissolves in the fresh water Oil and water are then separated (again) with the salt staying in the water

What Oil and Gas facilities do Treat Oil : Stabilise “Stabilise” oil Oil contains gas which may be released if the pressure or temperature changes This must be removed so it can be stored / transported safely

What Oil and Gas facilities do Treat Oil : Stabilise Reduce pressure to atmospheric and allow time for gas to separate ( Compressing gas from low pressure is very expensive) Heat oil, under pressure, to “boil off” the gas (Maintains the well pressure so less compression is needed)

What Oil and Gas facilities do Treat Gas : remove contaminants (simplified) Separated / wellhead gas may contain contaminants Water, “Sour” or “Acid” gases (H2S / CO2), others Contaminant Typical (simplified) continuous contaminant removal process Gas is mixed with absorbent (Glycol for water) (Amine for H2S / CO2) Contaminant is absorbed Gas is cleaned Absorbent is “regenerated” – typically by heating Clean Gas Out Clean Absorbent Contaminated Gas in Contaminated Absorbent

What Oil and Gas facilities do Treat Gas : remove contaminants (simplified) Clean Gas Out Contaminant Typical (simplified) batch contaminant removal process Gas passes over absorbent (e.g. Silica gel for water) Contaminant is absorbed “cleaning” the gas Absorbent maybe “regenerated” often by heating 2 or more units operating, one cleaning and one regenerating. Change over when absorbent saturated. Some Absorbents are replaced and re-cycled by the vendor - not regenerated in-situ Absorbent cleaning gas Absorbent being regenerated Contaminated Gas in

What Oil and Gas facilities do Treat gas : control heating value Gas is usually burned as a fuel Sold on “heating value” i.e. How much energy it contains Export gas needs to be in the correct heating value (HV) range If the HV too high customers equipment maybe damaged If the HV too low customers equipment may not work reliably Difficult (expensive) to adjust HV If HV too low - remove inert gases If HV too high - reduce LPG content LPG extraction

What Oil and Gas facilities do Treat gas : reduce LPG content (simplified) Outlet gas Turbo expander Gas is compressed using power from the Turbine. Separator LPG condenses as gas gets colder and is separated Turbo expander Gas is expanded in a Turbine which makes it colder. LPG Inlet gas (with LPG) Separator LPG condenses as gas cools in the heat exchanger and is separated Heat exchanger Inlet gas is cooled by Cold Outlet gas LPG

What Oil and Gas facilities do Treat waste streams – produced water Disposal requirements Environmental permitting Quality constraints – reinjection Quantity – can be multiples of oil production Oil removal Separators, Centrifuges, cyclones, stripping columns, membranes, chemicals Scale formation (low level radioactivity) Saltwater can be difficult to dispose of onshore

What Oil and Gas facilities do Treat waste streams – gas contaminants Disposal requirements Environmental permitting Burning H2S results in SOx emissions H2S can be reduced to Sulphur Sulphur disposal .......... Sulphur recovery unit Sulphur “storage”

What Oil and Gas facilities do Deliver products to the market Oil Pipeline Tanker Rail Road Power generation Gas LNG (CNG / GTL)

Field Development Understanding the development process Is there enough resource for a development ? Has the best development concept been selected ? Has the concept been optimised ? Appraise Concept Select Concept Optimisation DG DG DG Has the end of economic production been reached ? Final investment decision Is the venture ready to start up ? Define Execute Operate Abandon DG DG DG Staged process with “decision gates” between each stage Maximise value from the sub-surface

Field Development Understanding a development Facility interface with reservoir Production profiles Drawdown constraints Pressure support requirements Number and type of wells Market size and location Export routes Gas and water constraints Contract terms Schedule / Timing (early production potential) Economics

Development Engineering Considerations Understanding the scale of a development Small scale (low upfront cost) may have better economics Development costs are location specific Local experience Maturity of market Availability of resources Labour productivity

Development Engineering Considerations How will it be built (and abandoned) Available skills Training Local content Safety standards Labour relations Offshore Barge availability Fabrication location Operations support / supply base Onshore Infrastructure / site access

Development Options - Technical Typical decisions required Facility location(s) Number and type of wells Process selection Capacity Number of trains Approach to construction Future expansion provision Infrastructure requirements Operating / maintenance philosophies Approach to risk Provision for future abandonment

Development Engineering Considerations External factors Safety Stakeholders Environment Local community Social impact Market Political stability Geographic location Competing projects Site availability / Land access Construction resource / capability

Interfaces with Development Engineering The following all influence the approach to a development: Production profiles & compositions (Reservoir Engineering) Pressure support requirements (Reservoir Engineering) Well design and drilling schedule / locations (Drilling Engineering) Market availability / location / rates for products (Marketing dept / Market research / Customers) Contract terms (Legal department) Tax regime (Tax / legal department) Waste disposal constraints (Environmental / legal department) Land Access (Land / legal departments) Operations Philosophies (Operation / Maintenance Departments) HSE requirements (HSE department) CSR requirements (CSR / legal department)

Development Engineering Key lessons Understand the uncertainty in the sub-surface data Design for a range of scenarios Iteration often required Make and stick to decisions There will be compromises Uncertainty in available data means that continuous “optimisation” is usually counter productive Understand the nature and scale of the development Consider all the options, not just the preferred base case Engage and manage all key stakeholders

Development Engineering THANK YOU