Delivering maximum value from mature oil wells through harnessing stranded associated petroleum gas assets
Client Major O&G Exploration & Production company
Location Kalimantan, Indonesia
Sectors Oil and gas
The challenge
Escalating costs and failure to harness stranded APG assets from matured oil wells
A major O&G E&P player has been operating a 70 wells oil field with a daily production volume of up to 14000 barrels of crude oil/day for more than a decade.
The profitability of an oil production operation hinges very much on shrewd optimised production and oil price. Oil prices were hovering between US$50-$70+ per barrel, far from its heydays of US$160/barrel. The operations team made attempts to harness stranded associated petroleum gas(APG) assets from 5 matured wells for power generation to reduce cost of energy and improve its margins.
Due to a lack of gas power engineering expertise within their team, the customer was relying on an external vendor’s solution which did not achieve its desired impact of harnessing an optimal amount of stranded APG for on-site power generation. Erratic supply, gas quality and its relative high impurities resulted in minimal volume of gas deemed compatible for power generation, with the vendor’s gas engines. Additionally, diesel generators were frequently utilised to compensate for the power capacity shortfall from stranded APG power generation. Double whammy of underperforming gas power generation and higher than expected diesel consumption resulted in undesirable performance on generation and operational costs.
The customer was determined in getting this sorted and hence floated another tender for a more competent engineering partner.
Project fact file
Oil Field
Harnessed for power generation
Composition of stranded APG
Power generation capacity
The solution
Bespoke technical gas power solution that delivers maximum value by harnessing stranded APG from mature oil wells
Aggreko responded to the tender, made a thorough assessment of the issues and proposed with a new approach which won over the customer’s experienced operations team. It was revealed that the other competing vendors were not confident of delivering a solution due to high carbon monoxide (30%), impurities and presence of water for the APG supply.
The winning formula of our approach lies in the bespoke gas treatment coupled with turnkey gas power engineering expertise. Every site’s gas composition has to be treated differently on a technical basis for optimal generation volume and performance. With more than 20 years of global experience handling gas, Aggreko possess one of industry’s leading gas engineering teams, capable of engineering solutions with a variety of gases. A recent milestone saw Aggreko managing 2GW of ‘live’ gas projects on-hire.
The team engineered the package inclusive of gas train, monitoring, gas filter skid with 3MW of gas power generation capacity and incorporated redundancy. Aggreko’s in-house assembled gas generators also edged against competition in terms of its reciprocating engines’ heat and gas tolerance ranges and specifications superiority. The modular power plant was also centralised as a microgrid for optimised power distribution to multiple wells, powering electric submersible pumps and associated requirements, with no compromise on power quality.
On the commercial front, the zero-capex solution was flexible and ideally placed for mature wells where production might dwindle. Scaling down of power generation during the contract tenure was possible to optimise costs.
the aggreko diference
Gas power experts you can rely on
The impact
Decarbonised operations and improved margins amid uncertain oil price environment
At the time of writing, the APG to Power microgrid solution has been running for 2 years with a high probability of extension. The commercial nature of the project allows for flexibility on switching of microgrid’s location specific site’s well selection for APG utilisation.
The turnkey engineered APG to gas power solution delivered a host of benefits:
- Alleviated customer’s pressure on harnessing APG for on-site power generation as part of its decarbonization efforts
- Field cost efficiencies derived as a result of successful on-site power generation with otherwise wasted free gas source
- Improved margins due to reduction on cost of energy
- Reduction of carbon emissions where an average of 2.5MMSCFD were not flared into the atmosphere
- Production stability due to stable ESP performance with shrewd power set-up that reduces total load and costs through centralized microgrid as opposed to conventional set-up where each ESP site is powered by independent power generator(s).
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