WIN WIN - Wind-powered water injection Industry innovation and the development of an «impossible» idea

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1 WIN WIN - Wind-powered water injection Industry innovation and the development of an «impossible» idea 1st of March 2017 Johan Slätte, Senior Engineer Ungraded 1 DNV GL November 2015 SAFER, SMARTER, GREENER

2 Presentation outline Introduction to DNV GL Background to the WIN WIN JIP Brief introduction to Floating Wind The innovation project and it s different phases Summary and conclusions Q&A Ungraded 2 DNV GL November 2015

3 Industry consolidation 3

4 Our vision: global impact for a safe and sustainable future MARITIME OIL & GAS ENERGY BUSINESS ASSURANCE SOFTWARE RESEARCH & INNOVATION 4

5 Leveraging on experience - Offshore wind industry DNV + GL + KEMA + Nobel Denton + Garrad Hassan = DNV GL Energy The world s largest certification and advisory firm in renewable energy 5

6 A number of facts 6

7 WIN WIN - Wind-powered water injection Assessing a new concept for water injection, utilizing wind power WIN WIN is a concept for a new generation of oil recovery technology currently being assessed. It comprises a floating wind turbine which supplies power to a water injection process. The concept is a fully stand-alone system that includes pumps and basic water treatment. Our ambition is that WIN WIN will reduce costs, increase flexibility, and reduce emissions. WIN WIN phase 1 main conclusions 1. Commercially competitive alternative in a range of cases 2. No technical showstoppers identified 3. Technically feasible 7

8 Background - Inspiration for the WIN WIN project Successful operation and deveopments of floating wind technology The development of EOR technology / Tyrihans Raw Seawater injection for EOR Image: Statoil Image: OTC Winter 2013/2014 Idea developed internally April 2014 Concept first presented at OTC with call for a joint industry project February 2015 Partnership formed and project started May 2016 Project results presented at OTC -> Phase 2, pilot testing and commercial project 8

9 WIN WIN (Phase 1) - A joint industry project 9

10 Phase 1 - A recognized industry effort 10

11 Renewable and O&G integration In 2015/2016 assessment Statoils Hywind demonstrator, a floating wind turbine located offshore Stavanger, Norway, has been operating since In the record year of 2011 it produced 10.1 GWh. The potential for moving the test unit to the Valemon platform has been assessed by statoil. Valemon is today supported by power from the Kvitebjørn platform, 10 km away From being able to shut down one of the two gas tubines, a reduction of tons of CO 2 could be a achieved, with associated costs. 11

12 A brief introduction to floating wind 12

13 Floating wind turbines Three key philosophies SPAR Semisubmersible TLP NREL 13

14 Key milestones for floating wind technology 14

15 Key milestones for floating wind technology 2009: Hywind demo 1 st spar buoy 15

16 Key milestones for floating wind technology 2009: Hywind demo 1 st spar buoy 2011: WindFloat demo 1 st semi-sub 16

17 Key milestones for floating wind technology 2009: Hywind demo 1 st spar buoy 2011: WindFloat demo 1 st semi-sub 2012: Kabashima/Goto Spar 1 st concrete/steel 17

18 Key milestones for floating wind technology 2009: Hywind demo 1 st spar buoy 2011: WindFloat demo 1 st semi-sub 2012: Kabashima/Goto Spar 1 st concrete/steel 2012: VolturnUS 1 st concrete semi-sub 18

19 Key milestones for floating wind technology 2009: Hywind demo 1 st spar buoy 2011: WindFloat demo 1 st semi-sub 2012: Kabashima/Goto Spar 1 st concrete/steel 2012: VolturnUS 1 st concrete semi-sub 2013: Compact Semi 1 st turbine connected to: 19

20 Key milestones for floating wind technology 2009: Hywind demo 1 st spar buoy 2011: WindFloat demo 1 st semi-sub 2012: Kabashima/Goto Spar 1 st concrete/steel 2012: VolturnUS 1 st concrete semi-sub 2013: Compact Semi 1 st of the Fukushima demonstration unit 2013: Fukushima floating substation 1 st floating substation 20

21 and then, in 2015 Source: Windpower Monthly 21

22 Looking forward, the first small projects are soon here WindFloat Atlantic 27.5 MW off Portugal s coast 30 m in funding from NER300 Operation aimed for 2018 Hywind Scotland 30 MW off Peterhead in Scotland Financed by ROCs In operation from 2017 Image: Image: Statoil 22

23 Summary Floating wind Floating wind offers a potential to reach the high energy yield sites Technology is developing Leveraging on the knowledge and competence from O&G Costs are coming down The first arrays (several units) are to be commissioned in Potential to support O&G / other applications Business cases Leading to the WIN WIN JIP Image: Knut Ronold, DNV GL 23

24 WIN WIN Integration of floating wind with O&G 24

25 Technical Functional Commercial Is oil recovery affected by variable injection rates? Will the wind-powered system function in an off-grid environment? Can WIN WIN inject the required volumes of water? How much does it cost? Is it competitive with conventional technology? 25

26 Concept options and functions I. Stand-alone system with topside equipment II.Stand-alone system with subsea equipment III. Connected to platform I. Standalone system with key equipment (pump, water treatment system) integrated with the floating structure ( Topside ) II. Standalone system with key equipment subsea (pump, water treatment system) III. Concept option I or II with power cable to production platform (i.e. system is not standalone) 26

27 Use case and system specifications Geographic location: North Sea Water depth [m]: 200 Distance from production host [km]: 30 Reservoir conditions: 1 template, 2 injection wells, normal injectivity with specified injectivity index Target injection rate [bbl/d]: Maximum injection rate [bbl/day]: Maximum pump discharge pressure [bar]: 130 Water treatment requirements: Water filtration / chemical injection 27

28 Different alternatives: Conventional vs. WIN WIN Conventional Gas Turbine System 3 MW gas turbine located on platform Subsea flowline between platform and injection well tonnes annual CO2 emission per well Average barrels of water injected per day Wind powered water injection (WIN WIN) 6 MW wind turbines and 2x2 MW pump Autonomous system, injection through riser Zero CO2 emission Average barrels of water injected per day 28

29 The system 29

30 The base case configuration and its functionality 1. A standard wind turbine is mounted to a floating foundation. This foundation also serves as a platform for the water injection system. 2. An electrical micro grid enables controlled start-up and shut-down of the system, and ensures that power demand matches power supply during operation. A battery bank ensures power to critical safety and communication functions during periods of no wind. 3. Communication with the host platform is enabled through satellite communication. A conventional control umbilical can also be used. 4. The system uses sea water, which is pumped topside using lift pumps. 5. The sea water is filtered down to 50 micron using a vertical disc filter with backwashing capability. 6. The water is treated with chemicals. Chemicals are stored on board in vessels, and refilled during other maintenance activities on the platform. 7. Water is injected into the reservoir by injection pumps. 30

31 Performance of WIN WIN The WIN WIN concept has shown that it can meet the demands in relation to set requirements Key performance issues addressed in the project include delivering required injection volumes, understanding overall availability as well as investigating start-stop cycles and downtime. For the use case considered and others, WIN WIN exceeds target injection rates over time. Injection volumes over time have been simulated based on realistic wind-data for the use case, showing that volumes exceed target rate, despite some periods of low wind. 31

32 Commercial - CAPEX Total CAPEX for the use case configuration with process equipment located topside comes to around 75 MEUR. The wind structure and marine operations and logistics are the two main CAPEX drivers, together contributing to more than 50% of CAPEX costs. The pump system and development costs are also significant in the overall investment. 32

33 Commercial - OPEX To achieve a realistic estimate of the O&M cost and performance, DNV GL has modelled the system taking into account failure rates, repair times and wind and wave data. The resulting annual average operation and maintenance costs are on the order of 4,7 MEUR. Key drivers include parts, chemicals, and vessel costs. Increased reliability of the system would positively influence maintenance frequency and scope, in particular for unscheduled maintenance, reducing operational expenditures. 33

34 WIN WIN is cost-competitive for suitable fields The use case costs have been compared with a conventional alternative where water injection is accomplished with a flowline from the host. While WIN WIN has higher operational expenditures compared to a conventional alternative, the significantly lower capital expenditure means that it comes out comparable in 20 year life-cycle comparison. WIN WIN is therefore a commercially competitive alternative in a range of cases, and especially when host platform capacity is limited or injection wells are located far away. 34

35 Develop the WIN WIN concept along four pathways Validate, Innovate, Recommend and Explore WIN WIN Phase 2 Work Packages (WP) A. Validate B. Innovate C. Recommend D. Explore A.1 A.2 B.3 B.4 C.5 D.6 Electrical system validation Detailed assessment of pump type, performance and reliability Detailed technology assessment of water treatment systems Identify and assess opportunities to improve reliability and reduce OPEX Development of guideline for design and operation of WIN WIN Identify other applications where wind power could prove a cost-effective solution for the oil and gas industry 35

36 WIN WIN - Wind-powered water injection Fruitful collaboration between the wind and oil industries 36

37 Thank you Johan Slätte SAFER, SMARTER, GREENER 37

38 Injected Volume (bbl/d) WIN WIN meets performance targets 80,000 Injected Volume Loss due to Equipment Failure Loss due to wind variation Injection Target 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 38

39 Levelized cost of water injection [EUR/bbl] WIN WIN is cost-competitive for suitable fields Lifecycle cost per barrel of water, WIN WIN vs alternative, EUR* Wells Decommissioning OPEX CAPEX $3 saved per barrel of oil tco 2 Avoided per year 0.00 WIN WIN Alternative *Only includes difference in well cost, full well cost not included. Assumed oil:water ratio of 1:20 39

40 An innovation project now entering a second Phase In the phase 1 of the WIN WIN project a technical and commercial feasibility assessment was conducted with successful results. DNV GL and its joint industry partners have now started a phase 2 to drive the concept further towards commercialization by maturing the technical solutions, reducing uncertainty and cost, and enhancing performance. Phase 1 - Benefits Feasible: The concept is, to a large extent, based on commercially off-the shelf components and systems. Many of the remaining parts are already undergoing full-scale testing. Effective: WIN WIN meets performance requirements for a wide range of injection volumes and several reservoir types. Competitive: The concept can be cost-competitive, especially when the host platform capacity is limited or the injection well is located far away. Emission: Potential to reduce emissions, reduce carbon tax, from reduced need of operating gas turbines. Flexible: The inherent flexibility of the WIN WIN concept means that more water injection locations can be targeted through easy relocation, regardless of distance to platform. Innovative: Building on the strength of two industries, oil and gas joins forces with wind to achieve something greater together, also enabling a faster commercialization of floating wind turbine technology Phase 2 - Objectives The objective for Phase 2 is to develop the WIN WIN concept towards commercialization. The project will overall on the four following pathways: Validate: Build confidence and reduce uncertainty in the technical solution developed in Phase 1 Innovate: Improve performance and competitiveness Recommend: Develop guidelines for the design and operation of WIN WIN Explore: Identify other applications where wind power can provide a cost effective solution 40