1. Lessons Learned from Natural Gas STAR Offshore Technology Transfer Workshop Shell, GCEAG, API, Rice University and EPA’s Natural Gas STAR Program June 8, 2004 Minimizing Methane Emissions from Glycol Dehydrators

2. Page 2 Reducing Emissions, Increasing Efficiency, Maximizing Profits Minimizing Emissions from Glycol Dehydrators: Agenda p Methane Losses p Methane Recovery p Is Recovery Profitable? p Industry Experience p Discussion Questions

3. Page 3 Reducing Emissions, Increasing Efficiency, Maximizing Profits What is the Problem? p There are ~ 38,000 glycol dehydration systems in U.S. production sector u Estimate 350 glycol dehydrators in GoM p Glycol removes moisture from produced gas u Also absorbs methane, VOCs and HAPs p Glycol reboilers vent absorbed water, methane, VOCs, HAPs to the atmosphere u Wastes gas, costs money, reduces air quality

4. Page 4 Reducing Emissions, Increasing Efficiency, Maximizing Profits Basic Glycol Dehydrator System Process Diagram Glycol Contactor Dry Sales Gas Inlet Wet Gas Lean TEG Pump Driver Water/Methane/VOCs/HAPs To Atmosphere Rich TEG Fuel Gas Glycol Reboiler/ Regenerator Gas Bypass Glycol Energy Exchange Pump

5. Page 5 Reducing Emissions, Increasing Efficiency, Maximizing Profits Glycol Dehydrator Methane Emissions p Absorbed plus bypassed methane is vented by reboiler p On average, 600 Mcf methane per glycol dehydrator emitted each year p To date, ~ 13.5 Bcf methane has been saved in U.S. operations with optimized glycol circulation, flash tanks and electric pumps

6. Page 6 Reducing Emissions, Increasing Efficiency, Maximizing Profits How Can Glycol Dehydrator Emissions Be Minimized? p Optimized glycol circulation rates u Methane emissions are directly proportional to glycol circulation rate p Flash tank separator (FTS) installation u Recovers all methane bypassed and most methane absorbed by glycol p Electric pump installation u Eliminates need to bypass gas for motive force; eliminates lean glycol lean contamination by rich glycol

7. Page 7 Reducing Emissions, Increasing Efficiency, Maximizing Profits Optimizing Glycol Circulation Rate p Gas well’s initial production rate decreases over its lifespan u Glycol circulation rates designed for initial, highest production rate p Glycol overcirculation results in more methane emissions without significant reduction in gas moisture content u Natural Gas STAR partners found circulation rates two to three times higher than necessary

8. Page 8 Reducing Emissions, Increasing Efficiency, Maximizing Profits Overall Benefits p Methane savings p Reduced emissions of methane, VOCs, HAPs p Lower operating costs u Reduced glycol replacement costs u Reduced fuel costs p Immediate payback p No footprint changes

9. Page 9 Reducing Emissions, Increasing Efficiency, Maximizing Profits Installing Flash Tank Separator p Most dehydrators send glycol/gas mixture from the pump driver to regenerator p Flash tank separator operating at fuel gas system or compressor suction pressure recovers ~ 90% of methane u Recovers 10 to 40% of VOCs

10. Page 10 Reducing Emissions, Increasing Efficiency, Maximizing Profits Installing Flash Tank Separator p Flashed methane can be captured using an FTS p Many units are not using an FTS

11. Page 11 Reducing Emissions, Increasing Efficiency, Maximizing Profits Overall Benefits p Gas recovery p Reduced methane emissions p Low capital cost; short payback period Flash Tank Gas Recovery Reduced Emissions Low Capital Cost/Quick Payback

12. Page 12 Reducing Emissions, Increasing Efficiency, Maximizing Profits Decision Process for Installing Flash Tank IDENTIFY destination for low pressure gas ESTIMATE capital and installation costs of flash tank IDENTIFY dehydration units w/o flash tanks ESTIMATE gas savings potential CONDUCT economic analysis DETERMINE footprint feasibility

13. Page 13 Reducing Emissions, Increasing Efficiency, Maximizing Profits Flash Tank Applications p Flash tanks are a long-term solution p Flash tanks require a low pressure gas sink u Fuel gas line u Compressor suction p Standard footprints u

14. Page 14 Reducing Emissions, Increasing Efficiency, Maximizing Profits Flash Tank Costs p Two elements: capital and installation costs u Capital costs range from $5,000 to $10,000 per flash tank u Installation costs range from $2,400 to $4,300 per flash tank p Negligible O&M costs

15. Page 15 Reducing Emissions, Increasing Efficiency, Maximizing Profits Installing Electric Pump p Gas-assist pumps require additional wet production gas for mechanical advantage u Removes gas from the production stream u Largest contributor to emissions p Gas-assist pumps contaminate lean glycol with rich glycol p Electric pump installation eliminates motive gas and lean glycol contamination u Economic alternative to flash tank separator u Requires electrical power

16. Page 16 Reducing Emissions, Increasing Efficiency, Maximizing Profits Overall Benefits p Financial return on investment through gas savings p Increased operational efficiency p Reduced O&M costs p Reduced compliance costs (HAPs, BTEX) p Similar footprint as gas assist pump

17. Page 17 Reducing Emissions, Increasing Efficiency, Maximizing Profits Decision Process for Installing Electric Pump DETERMINE footprint feasibility ESTIMATE capital, installation and O&M costs DETERMINE availability of electrical power DETERMINE electric pump size ESTIMATE value of gas saved CONDUCT economic analysis

18. Page 18 Reducing Emissions, Increasing Efficiency, Maximizing Profits Economic Analysis Three Options for Minimizing Glycol Dehydrator Emissions

19. Page 19 Reducing Emissions, Increasing Efficiency, Maximizing Profits Partner Reported Experience p Partners report cumulative methane reduction of 13.5 Bcf since 1990 p Past emission reduction estimates for U.S offshore is 500 MMcf/yr or $1.5 million/yr

20. Page 20 Reducing Emissions, Increasing Efficiency, Maximizing Profits Case Study p One partner routes glycol gas from FTS to fuel gas system, saving 24 Mcf/d (8,760 Mcf/yr) at each dehydrator unit p Texaco has installed FTS u Recovers 98% of methane from the glycol u Reduced emissions from 1,232 - 1,706 Mcf/yr to <47 Mcf/yr

21. Page 21 Reducing Emissions, Increasing Efficiency, Maximizing Profits Lessons Learned p Optimizing glycol circulation rates increase gas savings, reduce emissions u Negligible cost and effort p Flash tank separators reduce methane emissions by about 90 percent u Require a gas sink and platform space p Electric pumps reduce O&M costs, reduce emissions, increase efficiency u Require power source

22. Page 22 Reducing Emissions, Increasing Efficiency, Maximizing Profits Discussion Questions p To what extent are you implementing these technologies? p How can the Lessons Learned study be improved upon or altered for use in your operation(s)? p What are the barriers (technological, economic, lack of information, regulatory, focus, manpower, etc.) that are preventing you from implementing this technology?