Power Gen Middle-East 2014

Alternative Fuels for Power

Generation within Oil and Gas
Industry
• KARI PUNNONEN
• AREA BDM, OIL&GAS BUSINESS, MIDDLE-EAST, ASIA &
AUSTRALIA
• WÄRTSILÄ FINLAND OY

1 © Wärtsilä 27 January 2016 K. Punnonen

 DISCLAIMER
Disclaimer

This document is provided for informational purposes only and may not be
incorporated into any agreement. The information and conclusions in this document
are based upon calculations (including software built-in assumptions), observations,
assumptions, publicly available competitor information, and other information obtained
by Wärtsilä or provided to Wärtsilä by its customers, prospective customers or other
third parties (the ”information”) and is not intended to substitute independent
evaluation. No representation or warranty of any kind is made in respect of any such
FOR INFORMATIONAL PURPOSES ONLY

information. Wärtsilä expressly disclaims any responsibility for, and does not
guarantee, the correctness or the completeness of the information. The calculations
and assumptions included in the information do not necessarily take into account all
the factors that could be relevant.

Nothing in this document shall be construed as a guarantee or warranty of the

performance of any Wärtsilä equipment or installation or the savings or other benefits
that could be achieved by using Wärtsilä technology, equipment or installations instead
of any or other technology.

All the information contained herein is confidential and may contain Wärtsilä’s
proprietary information and shall not be distributed to any third parties without
Wärtsilä’s prior written consent.

2 © Wärtsilä 27 January 2016 K. Punnonen

 Alternative Fuels for Oil and Gas Industry

AGENDA:
1. Company Profile
2. Oil Field and Side Streams
3. Power Need at Oil Field
4. Alternative Solution
5. Conclusions

3 © Wärtsilä 27 January 2016 K. Punnonen

 Wärtsilä Corporation

Power Solutions for Africa & Middle East:

Total: 53,7 GW Output: 11,9 GW
Plants: 4689 Plants: 856
Engines: 10584 Engines: 2254
Countries: 169

Marine/
Power Generation offshore

Ship
Power
Power
Plants

• Listed in Helsinki
Services
• 4.9 billion € turnover (2012)
• 19.000 Professionals

4 © Wärtsilä 27 January 2016 K. Punnonen

Oil &Gas Industry - Fundamentals

Oil Industry’s MWh is BBL

Blue Barrel [bbl]
Launched in 1870s
by Standard Oil
of John D. Rockefeller

The basic unit of

Oil Industry

Steel barrel
42 gallons, exactly
about 159 liters

5-25 kWh/bbl
Alternative Fuels For O&G Industry – Kari Punnonen
 On-Shore Oil Production

Global Oil Production by Location

Oil Production by 2030: 120

Offshore Onhsore

 Total Oil Production to reach: 100

100 MMBBL/D 80

mmbbl/ d
 On-Shore Oil to reach 75% of 60

total production 40

20

6 © Wärtsilä 27 January 2016 Alternative Fuels For O&G Industry – Kari Punnonen
On-Shore Oil Production

-Declining oil production and increasing demand are

expected to be replaced by production from New Fields
-Growth expected from Middle East and North America

On-Shore Oil Production - Source MMBBL/D On-Shore Oil Production-Region MMBBL/D

Note:
(1) Oil includes gas liquids.
(2) FIP - Field in Production, FUD - Field under Development, FUA - Field under Appraisal, YTF - Yet to Find, Other - Unknown status

Source: IHS
Alternative Fuels For O&G Industry – Kari Punnonen
 Oil Field and Side-Stream

A Case Study was done to evaluate a Power

Generation Strategy of an Oil Field

There is no Free Fuel in This World…

8 © Wärtsilä 27 January 2016 Alternative Fuels For O&G Industry – Kari Punnonen
 Oil Field and Side-Stream

Case Study - Oil Field:

 Reservoir Size: One Billion BBL
 CRO Production: 166 MBBL/D
 NG Production: 120 MMSCF/D
 30 year Operation
 In Middle East Context

Plateau Level Production only 9 years out of 30 year operation

9 © Wärtsilä 20 January
27 February2016
2012 Alternative Fuels For O&G Industry – Kari Punnonen
 Typical Oil Field Structure
Main Field Parameters – Water re-injected
– Water cut (initial): 10% – Hydrocarbon Side-Streams re-injected
– Gas - Oil Ration: 1160 scf/BBL – No flare

Oil Wells
Central Processing Facility

Well Pad
Group 1 Flash Gas
Oil Well
Compressor

CRO Treatment Water

Separation
Gas Processing
& Liquefaction
Handling
Well Pad
Oil Well Group 2

Water re- Side Stream Gas re-

Oil Storage Product injection Product Gas Power Plant
injection Re-injection
Pump Oil Pump Compressor Compressor
Pump
INTERNAL USE ONLY

Well Pad
Oil Well Group 3

Product Export Facility

Gas to
Gas Consumers
Oil pipeline
pipeline Infrastructure

CRO Terminal Personnel

Oil Tanker Camp

Alternative Fuels For O&G Industry – Kari Punnonen

 Typical Oil Field Structure: Central Processing Plant

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 Flow Balance at Central Processing Facility
Central Processing Plant
Raw Oil Flow from Well
Flash Gas
Oil (CRO) Compressor

Associated Gases (AG)

Contaminants
Water Gas Processing
Oil Processing & Side-Streams Handling
Sand

Water re- Product Condensate Product Gas

injection Oil Pump Re-injection Compressor
Pump Pump

Water Re-Injection CRO Production Side-Stream Re-Injection Natural Gas Production

MBBL/D MBBL/D MMSCF/D MMSCF/D
At Plateau Level 20 At Plateau Level 166 At Plateau Level 37,9 At Plateau Level 120

Questor and Hysys Simulation

12
Alternative Fuels For O&G Industry – Kari Punnonen
 Standard Oil Field Structure: Power Confiquration

Central Processing Plant

Power Deman: 5,4 MW
Flash Gas Installed ISO Power: 7,7 MW
Product Capacity Compressor Mech. Drive

CRO 166 mBB/D

NG 120 mmScf/D
Gas Processing
Oil Processing & Side-Streams Handling
Power Deman: 10 MW
Installed ISO Power: 21,8 MW
El. Power Generation

Water re- Product Side-Stream Product Gas

injection Oil Pump Re-injection Compressor Power Plant
Pump Pump

Power Deman: 10,7 MW Power Deman: 10,7 MW

Power Deman: 2,7 MW Power Deman: 2,3 MW
Installed ISO Power: 15,3 MW Installed ISO Power: 15,3 MW
El. pump El Drive
Mech. Drive Mech. Drive
Electrical Power Demand: 10 MWe, total Power Demand 36,9 MW
Total Power Need
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Alternative Fuels For O&G Industry – Kari Punnonen
 Gas Turbine Derating at Site Conditions

1,05

1
Derating factor

Aeroderivate Gas turbine

0,95

0,9

0,85
Industrial Gas turbine
0,8
15 20 25 30 35 40 45
Ambient temperature [C]

1,1

1,05
Power Unit Selection: 1
Derating factor

 Dimensioned for Plateau output

0,95
Industrial Gas turbine
0,9

 Ambient Derating: starts at 15C 0,85

0,8

 Generator Power factor 0,75

0,7
 Next size available 0,65
Aeroderivate Gas turbine

0 500 1000 1500 2000 2500 3000

Altitude [m]

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Alternative Fuels For O&G Industry – Kari Punnonen
 Power Unit Selection at Central Processing Facility

Duty Duty Power Needed ISO Selected ISO Load Factor

Need MW Power MW Power MW %
Electricity 10 16,9 21,8 46%
Production
Mechanical 26,9 37,5 38,3 70%
Drives
Total 36,9 54,4 60,1 61%
Power

Alternative Fuels For O&G Industry – Kari Punnonen

15 / 31 © Wärtsilä
© Wärtsilä 27 January 2016 K. Punnonen Doc.ID: Revision: Status:
 Lifetime Average Power Unit Load Factor

Lifetime Average Production:

 Reservoir Size: One Billion BBL
 CRO Production at Plateau:
166 MBBL/D
 30 year Average: 95 MBBL/D
 Average Production: 57%

Duty Duty Lifetime Selected ISO Average

Power Average Power Power MW Lifetime Load
need MW need MW Factor %
El. Power 10 7 21,8 28,3%
Mechanical Power 26,9 16,14 38,3 41%
Total 36,9 23,14 60,1 37,8%

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Alternative Fuels For O&G Industry – Kari Punnonen
 Gas Turbine Efficiency in the Class <10MW

Gas Turbine Efficiency (Heat Rate) at 100% load Gas Turbine Efficiency at Partial Load
50
35
45
30
40 25

Efficiency [%]
Efficency [%]

35 20
Gas Turbine
30 15 (Source
EEA/ICF)
10
25
5
20
0 2 4 6 8 10 0
0 50 100
Power [MW] Load [%]

Gas Turbine Efficiency:

 Efficiencies referring to ISO conditions at 15C ambient conditions
 Efficiencies given with ISO 5% tolerance
 Values given for clean new units at 100% load
 Gas Turbine Efficiency is strongly depending on operational load

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Alternative Fuels For O&G Industry – Kari Punnonen
 Power Unit Lifetime Efficiency and Fuel Consumption

Duty Lifetime Average Average Lifetime Average Lifetime

Power MW Load Factor % Efficiency %
El. Power 7 28,3 <20%
Mechanical Power 16,14 41 <20%
<20%
Total Values 23,14 37,8
>18.000 kJ/kWh

Duty/Gas Consumption Gas Consumption Gas Consumption Gas Consumption

MMSCF/DAY MMSCF/Year MMSCF/Lifetime

Tot. Gas Consumption 9,86 3 450 103 530

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 Alternative Solution

Alternative Solution for Oil

Field Power Generation
Based on: Internal
Combustion Engines (ICE)

19 © Wärtsilä 27 January 2016 Alternative Fuels For O&G Industry – Kari Punnonen
 Alternative Solution for Power Generation

Industrial Standard Solution based on Gas Turbines

Central Processing Facility

Flash Gas
Mech. Drive
Compress
or N+0

Gas Processing
Oil Processing & Liquefaction Handling

El. Power
Generation
N+1

Water re- Product Condensate Product Gas

injection Re-injection Compressor Power Plant
Oil Pump
Pump Pump

Fuel to Power Plant

& Mech Drives
Mech. Drive El. Pump,
Mech. Drive Mech. Drive
N+0 supplied by
N+0 N+1
Power plant

CRO to Sales Gas to Sales

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Alternative Fuels For O&G Industry – Kari Punnonen
 Alternative Solution for Power Generation
Central Processing Plant

Flash Gas
Compressor

Central Processing Plant

Gas Processing
& Liquefaction Handling
Oil Processing
Flash Gas
Compress Electrical
or Drives

Gas re-
Water re- Product injection Product Gas
injection Oil Pump Compressor Compressor
Pump

Gas Processing ICE based

Oil Processing & Liquefaction Handling
max. Size power plant
For oil field power
Water Re-
Injection Oil pipeline
Gas Re- Gas pipeline
production
Injection

Water re- Product Product Gas

Concept Change: injection Oil Pump
Side-Stream
Re-injection
Compressor
Pump Power Plant
-all drives electrical
-ICE as prime movers Fuel to
-fuel: Side-Stream Power Plant

Electrical Electrical Electrical Electrical

Drives Drives Drives Drives

CRO to Sales Gas to Sales

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Alternative Fuels For O&G Industry – Kari Punnonen
 Wärtsilä 20V32GD Generating Set

22 © Wärtsilä 27.1.2016 Alternative Fuels For O&G Industry – Kari Punnonen

 Wärtsilä 32GD, Summary

GD Engine Features
-Internal Combustion Engine (ICE)
-Power Output: 8,9 MW per unit
- Multi-Fuel Principle
- Liquid Fuel: LFO, HFO, CRO
- Gas Fuel: Natural Gas, Associated Gases
- High thermal efficiency
- Fast load response

dimension A B C D E Engine Genset

weight weight
mm / tonnes 12890 3300 4243 1825 2418 89 132

23 © Wärtsilä 27.1.2016 Alternative Fuels For O&G Industry – Kari Punnonen

 Driver efficiency in the class <10MW

Gas Turbine vs. ICE Efficiency at 100% load Gas Turbine vs. ICE Efficiency at Partial loads
50
50,0
45 45,0
40,0
40

Efficiency [%]
35,0
Efficency [%]

30,0
35 25,0
30 20,0
15,0
25 10,0
5,0
20 0,0
0 2 4 6 8 10 0,0 20,0 40,0 60,0 80,0 100,0
Power [MW] Load [%]

ICE Engine Gas Turbine

ICE Technology - Highest Single Cycle Efficiency – ISO Cond. Up to 50%

Gas Engine Produces over 40% Efficiency at Partial Load
Pakistan 146 MW Bangladesh 120 MW
Brazil 48 MW

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 ICE Power Units Lifetime Fuel Consumption

Comparison Gas Turbine Combustion

Solution Engine Solution
Max. Power need (MW) 36,9 43
Lifetime ave. Power need (MW) 23,1 28,8
Load Factor (LF) % 60 80
Lifetime ave. Load Factor (%) 37,8% 90%
Lifetime ave. Efficiency (%, kJ/kWh) <20% (18.000) >40% (8570)

Gas Turbine Combustion

Solution Engine Solution
Total Gas Consumption (MMSCF) 103.530 57.337

Russia MW Sudan 30 MW Hungary 30 MW

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 Lifetime Evaluation – Additional Gas Sales

Value from Additional Gas Sales to Pipeline

Parameter Unit Gas ICE Production Rates:
Turbine Solution
Max. Power Need MW 36,9 43  CRO Production: 166 MBBL/Day
Lifetime Average Power MW 23,1 28,8  NG Production: 120 MMSCF/Day
Lietime aver. efficiency % <20 >40  GT Fuel Cons.: 9,8 MMSCF/Day
Central Processing
Plant

Flash Gas
Compressor

Power Supply to Field

Gas Processing
43 MW
Oil Processing
& Liquefaction Handling

Additional Income From Gas Sales

with various gas prices
Gas re- Product
USD/MMBTU
Water re- injection Gas

ADDITIONAL GAS
Product
injection Oil Pump Compress Compress
or
Pump or
Gas Price : Gas Price : Gas Price :
Unit
4 10 15
REVENUE
Water Re-
MUSD
Injection
Oil
pipeline
Gas Re-
Injection
Gas
pipeline Gas Sales/Day 0,037 0,093 0,14
Field Power Plant: Gas Sales/Year MUSD
13 32,5 48,8
-fuel: Side-Stream
MUSD
Lifetime Gas Sales 390 975 1.464

Considerable Revenues even in a National Level Cash Flow Analyse

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Alternative Fuels For O&G Industry – Kari Punnonen
 Lifetime Evaluation – Reduced Foot CO2 Print

Environmental Benefits due to better Efficiency (Heat Rate)

Production Rates:
 CRO Production: 166 MBBL/Day
 GT Fuel Cons.: 9,8 MMSCF/Day
 ICE Fuel Cons.: 5,4 MMSCF/Day

Income From Gas Sales

Gas Price: 10 USD/mScf

GT Solution ICE Solution

Unit Diff.
NG as fuel Side-Streams
CO2 FOOT PRINT
mmScf/d
Fuel Consumption 9,3 5,4 3,9
1000 Ton
CO2 Emission/Year 7 928 4 392 3 536
3,5
CO2/BBL of CRO kg/bbl 7,9 4,4
(-44%)

Single most effective measure to reduce Oil Field CO2 Foot Print
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Alternative Fuels For O&G Industry – Kari Punnonen
 Lifetime Evaluation – Value Potential

Total Value for adapting Combustion Engine Solution

Lifetime Total Potential Value
ICE Solution
BENEFIT Unit
Side-stream as Fuel

Additional Gas Sales MUSD 1 464

Lower CO2 Foot Print kg/BBL -44%

Revenue benefits: 1,4 Billion USD

-improved Oil Field Reliability (electrical drives, multi-unit power plant)
-more effective Energy Utilization (efficiency from <20% to 40%)

28 © Wärtsilä 1/27/2016 Alternative Fuels For O&G Industry – Kari Punnonen

 Capture Efficiency By utilizing Associated Gas as fuel

Oil Field Power plant - Ecuador

Flare Before
Flare Reduction Project

Type: Field power plant

Engines: 8 X Wärtsilä 18V32GD generating sets
Fuel: Associated gas (Flare Gas), Crude Oil
as back-up fuel

70 MW Wärtsilä CRO fired power plant in

Eden-Yuturi oil field in Eastern Ecuador

June 2010 Wärtsilä converted four

engines into Wärtsilä GD, gas-diesel engines
Flare After to burn Associated Gases as fuel.

To improve the plant’s environmental

impact and financial performance:
-sell 1.200 BBL of CRO more per day
-worth 120.000 USD/Day
-worth 42 Million USD/Year
/ 31 © Wärtsilä 27 January, 2016 PV Gas - Vietnam Doc.ID: Revision: Status:
Alternative Fuels For O&G Industry – Kari Punnonen
 Final Words

 Considerable improvements in lifetime revenues can

be achieved by:
 Choosing Internal Combustion Engines (ICE)
 Utilizing Side-Streams as Fuel
 Utilizing Less Fuel due to Better Efficiency

 Large CO2 Foot Print reductions can be achieved by

utilizing High Efficiency ICE Technology

O&G Industry has its lifetime change to up-grade itself

from a low efficiency industry to front runner in in the
efficiency race – and making more money while doing it...

30 © Wärtsilä 27 January 2016 Alternative Fuels For O&G Industry – Kari Punnonen
WARTSILA.COM

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