Creative solutions offer both efficiency and lower emissions

The emirate’s aim to increase its output of crude oil from 2.8m to 3.5m barrels per day (bpd) by 2017 and its target of raising recovery rates to 70% are accelerating the long-anticipated development of enhanced oil recovery (EOR). This trend is providing increasing opportunities for international and domestic companies with experience in EOR technology. These technically challenging projects are in their early days, but have the benefits of increasing production and freeing up valuable natural gas for use in other industries, while trimming Abu Dhabi’s carbon footprint.

Salem Al Mansoori, the general manager of ADNOC Linde Industrial Gases Company, more commonly known as Elixier, which provides industrial gases to the oil, gas, petrochemicals and other industry sectors, told OBG, “The petrochemicals and oil refining sectors in Abu Dhabi have expanded dramatically with the commissioning of the [Abu Dhabi Polymers Company] Borouge 3 project and the new refinery in Ruwais. These two new projects will create an opportunity for Elixier to supply Borouge and the Abu Dhabi Oil Refining Company with all the industrial gases to meet their needs.”

EOR

The Abu Dhabi National Oil Company (ADNOC) defines EOR as “recovery of oil using means other than natural depletion or secondary methods (e.g., waterflooding)”. This includes a range of techniques either for extracting oil from geologically difficult reservoirs, or extracting particularly viscous oil, or both. With new oil discoveries slowing, the company and its partners are increasingly focusing on enhancing extraction at operating oilfields to maintain production levels, or at least decelerate their decline. As such, they are increasingly looking to deploy EOR in the emirate.

While the need for such methods is not pressing, as Abu Dhabi has ample resources that are extractable using conventional techniques, ADNOC and its partners are keen to pilot, test and develop EOR in the emirate over the coming years to boost output and prepare for a time when they will rely more on heavier and harder-to-extract crude. ADNOC has set a target of lifting 70% of the emirate’s available oil reserves by 2055. To achieve this, the company aims to raise the average rate of recovery from its producing assets from 30% to 70%. This will involve large-scale implementation of EOR, requiring huge investment, and harnessing the technology and expertise of global leaders in the sector, as well as homegrown research and development.

As worldoil.com wrote in August 2014, “[Abu Dhabi] accounts for about 7% of global oil resources, there is clearly a huge potential for additional value creation”. “The role of the international oil companies (IOCs) will be to bring expertise, innovation and technology to the local oil and gas industry,” Abdulkarim Al Mazmi, general manager and chief representative of BP UAE, told OBG. “This will help increase production and meet the 70% recovery rate that the government is pursuing.”

Hatem Nuseibeh, the president of Total UAE, told OBG, “Maximising oil recovery is the most significant challenge faced by Abu Dhabi. That is why the continued presence of international majors is so important. Their experience in a host of different countries, which are confronted by various production challenges, affords them the strongest likelihood of being able to improve recovery rates here in Abu Dhabi.”

Improvement of existing infrastructure has also been cited as a factor that could help increase recovery rates. Ali Al Jarwan, CEO of ADMA-OPCO, told OBG, “There is a need to replace aged oil pipelines in the offshore fields with the objective of mitigating potential environmental risks and sustaining production capacity. That is why we have begun the Phase 1 of the Zakum Oil Lines Replacement Project, which also includes the modification of wellhead towers.”

Technical Aspects

The form of EOR that is gaining the most traction in Abu Dhabi is CO 2 injection. CO 2 EOR is a form of tertiary oil extraction. Primary extraction relies on the natural pressure of an oilfield to bring crude to the surface, but can leave 80-90% of the resource underground, according to the US-based National Enhanced Oil Recovery Initiative, an industry group that promotes EOR. Secondary production is the use of water to repressurise underground formations and flush the oil towards the wells. It can leave 50-70% of oil still underground. Tertiary extraction entails using an injectant that mixes and reacts with the oil, altering its properties and making it easier to extract.

CO 2 injection generally works by mixing the gas with oil in an underground formation, making it lighter, separating it from the rock surfaces, allowing it to move freely and pushing it toward production wells. This is a “closed-loop process” in which the CO 2 that comes to the surface with the oil is separated and reinjected, but most remains in the formation. While most CO 2 used in EOR is naturally occurring and found in underground domes, in Abu Dhabi the emphasis is on using captured, man-made CO 2 from industry that will then be compressed and delivered to oilfields via pipeline.

Benefits

CO 2 injection has a number of benefits. Most obviously, as a form of EOR it can bolster output from oilfields, sustaining long-term production and increasing extractable reserves. Secondly, using CO 2 instead of hydrocarbon gas for injection into oil wells preserves the latter for more useful deployment elsewhere in the economy. The UAE has the world’s seventh-largest gas reserves, mostly in Abu Dhabi, but the country is a net importer of gas, partly because so much is used in the oil industry.

Around 26% of the gross natural gas the UAE produced from 2003 to 2012 was reinjected into oilfields as part of EOR processes, according to the US Energy Information Administration. Demand for natural gas in Abu Dhabi is growing strongly from the power sector, industries such as petrochemicals that are central to the emirate’s diversification strategy, and for domestic and vehicular use. Substantial amounts are also exported as liquefied natural gas. Using this valuable resource in the oil industry when another option is available is economically questionable. Thirdly, in CO 2 there is an alternative that is a polluting emission and a waste product from the growing industrial sector. By capturing CO 2 from heavy industries such as steel and aluminium plants and injecting it into subterranean reservoirs as part of the EOR process, Abu Dhabi can also cut down its greenhouse gas emissions. Neri Askland, the country representative for Norway’s Statoil, told OBG, “Going forward, a delicate balance will have to be maintained between the maximisation of oil recovery by using the latest technological capabilities, and carefully monitoring the environmental impact of EOR mechanisms.”

This is a priority for the emirate and will help it meet its obligations under the Kyoto Protocol on climate change. The International Energy Agency estimates that globally as many as 100 carbon capture projects will be needed by 2020, rising to 3000 by 2050, to slow the pace of climate change. “Not only is carbon capture and storage technology a valuable method for boosting oil production in mature fields, it is also an energy-efficient solution that can reduce emissions and costs,” Al Mazmi told OBG. “Storing CO 2 lessens the impact on the environment and increases plant compliance with stringent environmental legislation.”

Due to the resulting need for natural gas, in 2011 ADNOC and Germany’s Linde Group formed a joint venture, Elixier, in order to construct two major air separation plants in Mirfa. The plants now produce around 670,000 cu metres of nitrogen per hour for injection into onshore gas reservoirs located in Habshan, while its byproducts, a mixture of krypton and xenon, are exported to Germany. Many firms have focused on CO 2 reinjection, but Elixier has also experimented with N2. Under its Enhanced Gas Recovery process, N2 can be reinjected into natural gas reservoirs in order to increase pressure, resulting in higher yields. While CO 2 can be an economical alternative in some areas when sourced from underground wells, N2 can be recovered almost anywhere from atmospheric air. N2 also requires less compression, and therefore less is needed to create high pressure in natural gas reservoirs.

Projects Underway

The Abu Dhabi Company for Onshore Petroleum Operations (ADCO) has established a road map to define the process of implementing EOR. Firstly, technical screening studies are carried out to assess fields for eligibility, including laboratory studies on fluid and rock and computer simulation of the oil recovery process. Further analysis is carried out to understand the impact of CO 2 on surface infrastructure and to assess the economic viability of projects.

ADCO launched the first CO 2 injection pilot in the Middle East at Rumaitha’s North-East Bab Field in 2009, using CO 2 supplied by Masdar. The two-year project saw 60 tonnes of CO 2 injected every day to monitor reservoir behaviour. The results were positive, and now the partners are developing the next step: the first carbon capture EOR project in the Middle East. In November 2014 ADNOC and Masdar launched Al Reyadah, a cutting-edge carbon capture, utilisation and storage (CCUS) joint partnership, to develop projects.

The network includes all phases of the CCUS process, from capture to transport to injection into the oil reservoir and sequestration. In the initial pilot phase, 800,000 tonnes of CO 2 a year will be captured from the Emirates Steel mill at Mussafah and transferred to the Rumaitha North field by a 50-km pipeline. Contractors include the Dubai-based Dodsal Group, which was awarded a $123m contract for the engineering, procurement and construction (EPC) of the carbon capture, compression and transportation parts of the chain, and Abu Dhabi’s ALSA Engineering & Construction for the EPC of the field operations stage. Operation is expected to start in 2016. According to Masdar, the two firms have made much progress on activities related to project execution. The facility will capture almost 800,000 tonnes per year of CO 2 -rich emissions from the Emirates Steel Phase 1 and 2 lines. The feed stream from the plant will contain 90% CO 2 , and this will be condensed to deliver a CO 2 stream of 98% purity.

Proprietary Technology

The expected increase in EOR usage is one of the reasons that ADNOC wants its partners to bring more proprietary technology to Abu Dhabi as part of their equity participation agreements. The desire to see greater application of cutting-edge methods may lead the structure of the next ADCO concession – announced in February 2015 – to differ from the previous model. Similarly, ADMA-OPCO’s offshore concession is up for renewal in 2018. These renewals could bring changes, as more Asian oil companies have secured new concessions. Representatives of several IOCs told OBG they are reluctant to share proprietary technologies with their operating partners under existing structures, which can involve several IOCs working together on a project. As a result, ADNOC is considering a new contracting structure.

Many of ADNOC’s partners (and former ADCO shareholders) have relevant experience. ExxonMobil, Shell, BP and Total have all used CO 2 for EOR and have deployed carbon-capture technologies, while Statoil, Maersk, Occidental Petroleum and the Japan Oil Development Company have all conducted research on CO 2 reinjection for oil recovery. “We will explore several EOR technologies, including BP’s patented LoSal technology, CO flooding and many other options,” said Al Mazmi. LoSal uses low-salinity water to flush oil reservoirs, the lower salt content helping to loosen oil from sandstone surfaces – contrary to previous understanding that low salinity would reduce recovery rates. According to BP, it could improve the effectiveness of water-flooding by 5-10% at a cost of as little as $3 a barrel.

Moving Forward

The time has come to push forward with sophisticated recovery technology. This is a necessity for Abu Dhabi’s goal of productive sustainability and lifting average daily output considerably in the next three years. Having launched the first CO EOR pilot in the Middle East, by 2017 it will commence a large-scale project using carbon capture, hoping to capitalise on the environmental benefits of emission reduction, as well as increased recovery rates and the preservation of more of its natural gas. ADNOC’s partners have long made a vital contribution to Abu Dhabi’s hydrocarbons sector. Those that have the ability and are willing to invest in EOR stand to benefit from the development of one of the world’s biggest oil reserves.

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The Report: Abu Dhabi 2015

Energy chapter from The Report: Abu Dhabi 2015

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