Produced Water for Cooling A Case Study San Juan Generating Station

Transcription

1 Produced Water for Cooling A Case Study San Juan Generating Station Advanced Cooling Technologies EPRI Workshop Presented by Michael N DiFilippo, Consultant July 08, 2008

2 Produced Water for Cooling A Case Study San Juan Generating Station

3 San Juan generating Station s Water Issues.. San Juan Generating Station (SJGS) consumes 22,000 acre-feet of water per year (467,600 BPD or 13,640 gpm) from the San Juan River. SJGS is a base-loaded plant and needs a reliable source(s) of water to operate. Researchers at the University of Arizona predict an extended drought for the region possibly lasting 40 to 50 years. SJGS is a long-term energy production site and will be there 25 years or more. PNM has negotiated short-term and long-term water contracts to ensure supply, however if a severe a drought develops water contracts are irrelevant. If SJGS uses less water through conservation and obtains alternative supplies (e.g. produced water), more water will be available for other beneficial uses.

4 One drought scenario.. SJGS has to reduce power by 10% for an entire year. SJGS has a long-term take-or-pay fuel contract, i.e. PNM must pay for fuel whether it uses it or not. SJGS will have to purchase power from other generators (most likely gas-fired combined cycle plants). The financial impact for this scenario could be in excess of $45 million per year. PNM has looked at scenarios where water reductions approach 30%. The basis for this project was to provide supplemental water to avoid or minimize the financial impact of such a scenario...

5 Produced Water

6 For every barrel of oil, 8 to 10 barrels of water are brought to the surface...

7 Onshore Produced Water Generation mgd mgd mgd mgd mgd 0 gpm gpm 700-7,000 gpm 7,000-70,000 gpm 70, ,000 gpm 0 AF/yr 0-1,120 AF/yr 1,120-11,200 AF/yr 11, ,000 AF/yr 112, ,000 AF/yr

8 DOE US-Russia Energy Working Group, April 2003

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10 Project Setting

11 San Juan Basin Farmington Santa Fe Albuquerque New Mexico Utah Arizona SJGS Farmington Fruitland Petroleum System Colorado New Mexico San Juan Basin San Juan Geologic Basin

12 Colorado New Mexico San Juan Generating Station 64 Fruitland Petroleum System Boundary Kirtland San Juan River Farmington Animas River Aztec Bloomfield 550 San Juan River Township Grid Navajo Reservoir N 32N 31N 30N 64 29N San Juan County Rio Arriba County 28N 27N 16W 15W 14W W 12W 11W 10W 9W 8W 7W 6W 5W 4W 3W Base Map of Study Area (~2,200 sq miles) 20 miles

13 Total Produced Water = 61,775 BPD Colorado New Mexico Each circle represents a production well or well cluster 550 N 32N Aztec Animas River Navajo Reservoir 31N 64 SJGS Kirtland Farmington San Juan River 30N 64 San Juan River Bloomfield 29N San Juan County Rio Arriba County 28N 27N W 15W 14W 13W 12W 11W 10W 9W 8W 7W 6W 5W 4W 3W Produced Water Project Extent of Production New Mexico Oil Conservation Division, miles Fruitland Petroleum System In the Four Corners area almost all of the produced water is trucked to disposal...

14 McGrath SWD (Salt Water Disposal) Facility McGrath is a large SWD near Farmington, New Mexico. Produced water generated at the wellhead is transported by tanker trucks to SWDs. At the SWD, oil is separated from the produced water. The water is then filtered and injected into a non-producing formation at depths that sometimes reach 5,000 feet. In some locations, injection pressures exceed 1,500 psi. There are 53 SWDs in the San Juan Basin.

15 CO 2 Gas Line Hart Canyon Line Extension (new) Produced Water Pipeline (new) High Volume Area Fairway Colorado New Mexico 32N San Juan Generating Station Animas River 31N 64 San Juan River Kirtl and High-Volume Production Areas Fairway Close-in Tri-City Total 20,680 BPD 12,520 BPD 2,760 BPD 39,560 BPD Close-in Farmington Produced Water Collection Center Tri-City Aztec 550 Bloomfield Township Grid San Juan River Navajo Reservoir 13W 12W 11W 10W 9W 8W 7W 6W 5W 4W 3W San Juan County Rio Arriba County SWD Injection Well N 30N 64 29N 28N 27N Produced Water Generation High-Volume Areas New Mexico Oil Conservation Division, miles ,560 BPD = 1,154 gpm

16 Life-of-project recoverable water... 3,000 Likely Recoverable Water PNM - Produced Water Project - SJGS Water Recovery Cases Likely Recoverable Water, AF/yr 2,500 2,000 1,500 Scenario 3 6% Declination Total Resource 90% Case 5 80% Case 4 70% Case 3 Likely Recovery Range 1, Project Year

17 Project Implementation Cost sharing with the oil & gas producers reduced overall costs...

18 The project would be implemented in two phases... Phase 1 An 11-mile pipeline would be build to collect water from Close-in producers (exclusively CBM production). Producers would inject filtered water into the line. Producer disposal costs would be reduced by $0.25/bbl. Phase 2 PNM would extend the pipeline an additional 17.5 miles to Bloomfield. Burlington resources would refurbish two existing pipelines and install satellite collection stations to gather theirs and other producer s water in areas of heavy tanker-truck traffic. PNM would build a collection Center in Bloomfield to accept and pretreat water gathered by Burlington Resources. Producer disposal costs would be reduced by up to $1.00/bbl. Some SWDs could be put on stand-by and the life of costly injection wells ($1.5 to $2.5 million per well) would be extended.

19 Phase 1 Phase 2 Burlington Resources SJGS Satellite Collection Stations SWD Direct Injection Fairway Produced Water Produced Water Treatment System 11 miles 17.5 miles Produced Water Pipeline Lift Station Tri-City Produced Water Produced Water Collection & Pretreatment Hart Canyon Line CO 2 Gas Line Close-in Produced Water Pipeline Charge Pumps (Bloomfield) New Intertie & Extention Dugan Production Richardson Operating Prax Air BHP Billiton Produced Water Collection & Conveyance Schematic PNM Produced Water Project - SJGS

20 Produced Water Treatment

21 25,000 Produced Water Salinity Burlington Resources, McGrath SWD 20,000 TDS, mg/l 15,000 10,000 5,000 4/4/03 4/9/03 4/14/03 4/19/03 4/24/03 4/29/03 5/4/03 5/9/03 Sample Date

22 Skimmed Oil 40,000 BPD Produced Water Grit Float Produced Water Receiving Tanks (2) Gravity-Coalescing O/W Separators (2-100%) Gas Floatation Units (2-100%) Off-spec Backwash DP Pipeline Charge Pumps (4-33%) 2-Day Equalization Basin Bloomfield Collection Center PNM Produced Water Project - SJGS AE AE Cond Turb Rinse Walnut Shell Filters (2-100%)

23 Ca(OH) 2 Na 2 CO 3 Produced Water Coagulant Aide H 2 SO 4 NaOCl Vent Overflow Air Reactor-Clarifier & Thickener Thickened Sludge to Scrubbers Backwash & Spent Regenerant Weak-Acid Cation Exchanger (WAC) Degassifier NaOH NaHSO 3 Permeate to Reuse Permeate to Filter BW & WAC Regen Reject to Evaporators Reverse Osmosis HERO System Process Schematic San Juan Generating Station

24 Gas Release Demisters Recirculating Brine Vapor Vapor Acid Packing Feedwater Deaerator Film Flow & Vapor Release Detail Tube Antiscalant RO Reject Feedwater Recirculating Brine Vapor Compressor Distillate Condenser Feedwater Heat Exchanger Waste Brine Recirculation Pump Seed Tank Brine Concentrator Process Schematic

25 Evap & Drift Plant Service Water Boiler Blowdown San Juan River Cooling Towers (4 units) Blowdown Plant Drains Steam Losses Water Lost to Disposal Ash System (4 units) Recycle to Limestone Prep Overflow (occasional) Spent Regen Process Wastewater Ponds Coal Pile Runoff (occasional) Boiler Make-up Demins Distillate Limestone Prep FGDs (4 units) Water Loss to Flue Gas Brine Brine Concentrators (2) Water Lost to Disposal Slurry Dewatering FGD Purge Water Boiler Cleaning (occasional) Simplified Water Balance San Juan Generating Station Evaporation Ponds (75 acres)

26 Evap & Drift Plant Service Water Boiler Blowdown San Juan River Cooling Towers (4 units) Blowdown Plant Drains Wastewater to Evap Ponds Produced Water Treatment Water Lost to Disposal Ash System (4 units) Recycle to Limestone Prep Overflow (occasional) Spent Regen Process Wastewater Ponds Steam Losses Coal Pile Runoff (occasional) Produced Water Treatment Wastewater Rerouted FGD Purge Water Limestone Prep Water Lost to Disposal Boiler Make-up FGDs (4 units) Slurry Dewatering Demins Water Loss to Flue Gas FGD Purge Water Distillate Brine Brine Concentrators (2) Boiler Cleaning (occasional) Treated Produced Water Reuse Points San Juan Generating Station Evaporation Ponds (75 acres)

27 Economic Analysis 2004 Basis

28 Capital Costs Incurred by PNM Capital Costs Incurred by PNM Collection 14-inch HERO + Total Center Pipeline BC 3 Project Capacity, BPD 34,000 60,000 53,000 Peak Conditions, BPD 30,670 44,710 48,130 Equipment & Installation $5,200,000 $12,900,000 $11,800,000 $29,900,000 Contingency 15% $780,000 $1,940,000 $1,770,000 $4,490,000 NMGRT (1) 6.125% $320,000 $790,000 $720,000 $1,830,000 PNM G&A (2) 5.5% $290,000 $710,000 $650,000 $1,650,000 Total Project $6,590,000 $16,340,000 $14,940,000 $37,870,000 Notes.. 1. NMGRT is the New Mexico Gross Receipts Tax. 2. G&A is a "general and admistrative" charge applied to all PNM projects.

29 Infrastructure Costs Incurred by PNM & Oil Producers Total Project Capital Costs BR Gathering system to Collection Center $5,000,000 Dugan Inject into pipeline $100,000 Richardson Inject into pipeline $100,000 PNM Collection Center, pipeline & treatment $37,900,000 Total Project $43,100,000 Notes Installation costs for Dugan and Richardson are most likely high.

30 Escalated Annual Op Cost Millions $7.0 $6.5 $6.0 $5.5 $5.0 PNM Operating Costs PNM - Produced Water Project - SJGS Scenario 3 6% Declination Project Year Water Recovery Cases 90% Case 5 80% Case 4 70% Case 3 Likely Recovery Range

31 Annual Tax Credit Millions $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Annual Tax Credit PNM - Produced Water Project - SJGS Likely Recovery Range Project Year Water Recovery Cases 90% Case 5 80% Case 4 70% Case 3 Scenario 3 6% Declination PNM was planning to qualify for a State of New Mexico for a tax credit of $1,000/AF for watersavings infrastructure. The tax credit would have an annual limit and life-time cap...

32 Escalated Annual Revenue Millions $12 $10 $8 $6 $4 $2 Total Annual Project Revenue PNM - Produced Water Project - SJGS Scenario 3 6% Declination Water Recovery Cases 90% Case 5 80% Case 4 70% Case 3 Likely Recovery Range $ Project Year Revenue to PNM would be generated by reducing producer disposal costs...

33 $4,000 $3,500 $3,000 Life-of-Project Cost of Water PNM - Produced Water Project - SJGS PNM Share of Producer Savings 0% 25% 50% 75% $2,500 Cost of Water, $/AF Net $2,000 $1,500 $1,000 Likely Recovery Range 6% Compound Decline 4% 2% $500 $0 -$500 with Tax Credit -$1,000 40% 50% 60% 70% 80% 90% 100% Water Recovery Producer participation significantly influenced the cost of this water resource...

34 Project Economics... Produced water project economics are based on capital and operating costs as well as a revenue stream. PNM s operating costs include treatment chemicals, power, labor, materials, maintenance and capital recovery costs. Revenue streams offset PNM operating costs. The first revenue stream would be a tax credit of $1,000/AF provided by the State of New Mexico (the tax credit would have an annual limit and life-time cap). The second revenue stream would be a share of the oil-producer savings derived from reduced disposal of produced water and deferred costs of injection wells. Depending on the revenue scenario, the 20-year, life-of-project costs would vary as follows: Share of producers savings with the New Mexico tax credit Share of producers savings without the tax credit No revenue streams $720 to $970/AF ($125 to $150/AF)* $1,200 to $1,500/AF ($160 to $200/AF) $2,500 to $3,000/AF ($260 to $330/AF) $1.3 to $1.7 million/year $2.0 to $2.6 million/year $4.3 to $5.1 million/year *Blended water costs San Juan $75/AF plus treated produced water.

35 PNM Project Benefits.. Conserve river water for other beneficial uses in New Mexico. Enable the San Juan Generating Station to be more drought resistant. Avoid costly fuel-delivery penalties and power purchase costs. Oil & Gas Producer Benefits... Reduce the volume of produced water that must be handled and injected. Establish an infrastructure to minimize produced water injection in the San Juan Basin. Establish area-wide opportunities to reduce produced water handling and injection costs.

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