1. Vapor Recovery in Offshore Applications Gulf Coast Regulatory and Environmental Affairs Group Meeting July 11, 2013

2. Air Quality Regulations ► BOEM/BSEE has jurisdiction for Western/Central Gulf of Mexico air quality for oil and gas drilling and production operations. ► East of 87.5 degrees longitude jurisdiction of OCS waters is USEPA Region 4. ► States have jurisdiction for air quality for onshore and coastal/territorial seas. ► Texas territorial waters (and county line) extend for three marine leagues (10.36 statute miles) offshore Texas

3. VRU Drivers – Onshore/Coastal Areas ► May need vapor recovery to meet state permitting rules or federal standard that apply to onshore, coastal and territorial seas. ► Limits flash gas to meet permit limits in general permits (Louisiana) or permit-by-rule (PBR) permits (Texas) ► Normally an option for permits, not always mandated. ► Option used to meet control requirements for storage tanks in 40 CFR 60 Subpart OOOO New Source Performance Standard - Oil and Natural Gas Sector

4. VRU Drivers – Western/Central GOM 30 CFR 250.1160 When may I flare or vent gas? ► (a)(5) You may not flare or vent more than an average of 50 MCF per day during any calendar month without Regional Supervisor approval. Limit of 50,000 SCFD average flash gas vent/flare gas limit (30 CFR 250.1160). ► Recover flash gas if economical to recover gas

5. VRU Drivers – Western/Central GOM 30 CFR 250.1160 When may I flare or vent gas? ► (b) states that must not flare or vent gas over the volume approved in your Development Operations Coordination Document (DOCD) or in Development and Production Plan (DPP) submitted to BOEM. ► Typically this volume is in the “Air Quality Review (AQR)” spreadsheets submitted with DOCD

6. Typical Production Process

7. ► Must be something generally accepted by industry and regulators. ► Options include: 1. Direct measurement of tank vent 2. Collect/analyze pressurized oil and measure gas to oil ratio (GOR) 3. Pressurized oil sample/analyses as input to Equations of State computer simulation or API E&P Tank computer pgm. Tank Vent Gas Quantification

8. Data collection (Direct Measurement) IQR Process – Measurement Protocol ► Simple & easy way to measure volume of vent gas with 98% accuracy ► Flow characteristics identified (very cyclical) ► Gas composition analyzed

9. Why Vapor Recovery? ► Regulatory compliance ► Recover very rich flash gas - $$ ► Reduce emissions of VOCs and greenhouse gases ► Improve safety of facilities

10. Engineered Solution Design ► Volume & peaks of flow ► Composition(s) of gas. H 2 S? ► Pressures ► Temperatures ► Availability of utilities (power/motive gas) ► Availability of booster compression ► Markets for products

11. Types of Solution Package Technologies Traditional vapor recovery uses compressors driven by electric or natural gas engines ► Reciprocating compressors ► Rotary screw compressors ► Rotary vane compressors ► Scroll compressors Ejector Vapor Recovery Unit (EVRU™)

12. Reciprocating Compressors ► High pressure & volumes ► Automatic bypass (recycle) ► Not recommended for wet gas

13. Flooded Screw Compressors ► High pressure differentials ► High volume capacities ► Variable Frequency Drive (VFD) ► Oil dilution issues

14. Rotary Vane Compressors ► High volume capacities ► VFD or bypass ► No oil dilution ► Low pressure differentials 60 psig in single stage ► Vane wear

15. Scroll Compression ► Less moving parts ► Less maintenance ► VFD ► Oil dilution issues ► 20 ppm H 2 S limit

16. Application of Scroll Technology ► Recovering gas from oil storage tanks and heater treater and discharging pressurized gas to larger compressor ► VRU system requires electrical power and purge gas for recycle ► High molecular weight gas recovery

17. Scroll Compressor Case Example Dual CVRU package for Offshore Application Design criteria Recovered gas throughput: 150,000 SCFD (150 MSCFD) Vent gas source: atmospheric storage tanks Suction Pressure: 1 to 3 inches water column Discharge Pressure: 100 psig Discharge to suction of onsite larger compressor

18. Offshore Scroll System

19. SPE-127153-PP Paper Conclusions ► Recovers natural gas product ► Lowers emissions of VOCs and GHGs ► Lower maintenance costs than typical VRUs ► System requires smaller footprint ► Cost effective and efficient VRU for offshore environment

20. COMM Patented EVRU™ Motive Suction Discharge $$$$$$$$$

21. EVRU™ Case Study Economics ► Investment: $120,000 ► 700 BOPD of 62 API Gravity ► Average gas recovery: 175 MCFD ► $709,560/year product recovery at $6/MMBTU ► Payback period: 2 months

22. EVRU™ Offshore Africa Eagle Ford Onshore

23. Offshore GOM EVRU™

24. EVRU System Advantages ► Simple, non-mechanical vapor recovery system ► 100% run time and on/off provides turndown ► Handles rich, wet gas & H2S ► No oil to maintain ► Small footprint ► Easy to modify ► Texas allows emission control efficiency of 99%

25. Key Points for a VRU Solution ► Determine regulatory requirements ► Value of natural gas recovered ► Cost of VRU capital costs and operation costs ► Knowing facility process and gas to be recovered critical to design and effective operation of VRU ► Measure & sample gas if possible ► Consider redundancy or easy replacement options

26. 1319 West Pinhook Road Lafayette, Louisiana USA Brian Boyer Salah Mansour (337) 237-4373 www.commengineering.com