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SPECIAL REPORT

Next Generation Back-Up Power Solutions Key Factors to Consider When Choosing Back-Up Power Solutions for Modern Oil and Gas Projects Cutting Costs: Can Oil Production Stay Financially Sustainable? Safety Net: How Back-up Power Can Be a Lifeline The Cost of Doing Business A Look at the Future: The Next Generation of Power Supply

Sponsored by

Published by Global Business Media


BORN FROM THE INDUSTRIAL REVOLUTION

LEADING THE ENERGY EVOLUTION

With many years of experience in the design, manufacture and implementation of UPS systems for the Oil, Gas and Petrochemical industries, AEG Power Solutions offers innovative UPS systems and excellent customer service with a truly global reach. We specialize in delivering standard and customized AC and DC systems with dedicated on-site services complimenting your projects unique requirements. AEG Power Solutions delivers maximum up-time and energy efficiency, guaranteeing lower operating costs.

More information: www.aegps.com Telephone +971 4 6091 290 aegps@aegps.com


SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

SPECIAL REPORT

Next Generation Back-Up Power Solutions Key Factors to Consider When Choosing Back-Up Power Solutions for Modern Oil and Gas Projects

Contents

Cutting Costs: Can Oil Production Stay Financially Sustainable? Safety Net: How Back-up Power Can Be a Lifeline The Cost of Doing Business A Look at the Future: The Next Generation of Power Supply

Foreword 2 Tom Cropper, Editor

Key Factors to Consider When Choosing Back-Up Power Solutions for Modern Oil and Gas Projects

3

Dominik Pawlik, Product Line & Marketing Communication Manager Industrial Power Solutions, AEG Power Solutions www.aegps.com Sponsored by

Published by Global Business Media

Published by Global Business Media Global Business Media Limited 62 The Street Ashtead Surrey KT21 1AT United Kingdom Switchboard: +44 (0)1737 850 939 Fax: +44 (0)1737 851 952 Email: info@globalbusinessmedia.org Website: www.globalbusinessmedia.org Publisher Kevin Bell Editor Tom Cropper Business Development Director Marie-Anne Brooks Senior Project Manager Steve Banks Advertising Executives Michael McCarthy Abigail Coombes Production Manager Paul Davies For further information visit: www.globalbusinessmedia.org The opinions and views expressed in the editorial content in this publication are those of the authors alone and do not necessarily represent the views of any organisation with which they may be associated. Material in advertisements and promotional features may be considered to represent the views of the advertisers and promoters. The views and opinions expressed in this publication do not necessarily express the views of the Publishers or the Editor. While every care has been taken in the preparation of this publication, neither the Publishers nor the Editor are responsible for such opinions and views or for any inaccuracies in the articles.

Š 2014. The entire contents of this publication are protected by copyright. Full details are available from the Publishers. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical photocopying, recording or otherwise, without the prior permission of the copyright owner.

Introduction Achieving Continuity Long Life Design Features Quality Management Global Service Example Project: Sadara Petrochemical Facility Industry Knowledge

Cutting Costs: Can Oil Production Stay Financially Sustainable?

7

Tom Cropper, Editor

The Future of Oil Demand An Uncertain Future The Role of Power

Safety Net: How Back-up Power Can Be a Lifeline

9

Jo Roth, Staff Writer

The Dangers of Power Failure Preparing For Disaster Environmental Considerations Looking to the Future

The Cost of Doing Business

11

James Gooding, Staff Writer

The Move from Diesel and Gas Effective Back-Up Future Developments

A Look at the Future: The Next Generation of Power Supply

13

Tom Cropper, Editor

Pushing Technology Further Renewables Alternatives to Diesel Power from the Shore

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SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

Foreword I

N THE Gulf of Mexico, Chevron are preparing

give an example of one feature that makes a difference

to start operations on board one of the largest

– parallel operation. It concludes with details of the

deep water oil rigs in the region. They call it Bigfoot

Sadara Project in Saudi Arabia. This is the world’s

– a 500ft high tower, with decks the size of football

largest integrated chemical facility ever built in a

fields. Powering this behemoth requires an on-

single phase and AEG Power Solutions has been

board power plant which could provide electricity

selected as the sole supplier of back-up AC and DC

for a small city. Keeping the lights on here is a major

UPS systems and batteries for the project.

undertaking in itself.

The second piece looks at what is required from

In fact, delivering power anywhere is becoming

any back-up power system: affordability, security

a major challenge. Oil exploration is increasingly

and robustness to withstand on-rig environments.

taking place in remote areas, deep water and

We’ll then go on to focus on the challenges of

harsh environments. Power requirements are on

safety and commercial sustainability presenting the

the up as are the risks of failure and power outages;

industry. Estimates suggest there remain substantial

however the consequences are also more severe.

oil resources in the Earth’s crust to meet our energy

Delivering secure, uninterruptible power with robust

needs for the next few decades. However, the

redundancy measures and back up to cover peak

commercial case for extraction is marginal at best,

respite is crucial.

with many larger operators writing off smaller and

However, with the commercial case tightening,

unconventional fields as commercially unviable.

this also has to be done in a more affordable way

In the final two articles of the Report we look at the

which is why considerable investment is being

recent developments in power supply, as the industry

sunk into developing more efficient, smaller, and

moves away from old fashioned diesel and gas DC

lower cost main and back-up power applications for

generators and adopts more efficient AC/DC solutions.

offshore installations.

However, as we move into the future, we’re increasingly

The opening article in this Special Report discusses

looking at new methods such as renewables, micro-

the importance to the oil and gas industry of highly

turbines, fuel cells and on shore power supply, which

reliable electrical power with 100% availability, as even

have the potential to reduce the use of diesel, thereby

the smallest interruption in electrical supply can be

not only cutting costs, but also reducing emissions.

dangerous and costly. It is vital, therefore, that backup systems are designed to cope with extremes of temperature and humidity, while being protected against the damaging effects of dust, particulates, acid and other hazardous materials. The article goes on to

Tom Cropper Editor

Tom Cropper has produced articles and reports on various aspects of global business over the past 15 years. He has also worked as a copywriter for some of the largest corporations in the world, including ING, KPMG and the World Wildlife Fund.

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SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

Key Factors to Consider When Choosing Back-Up Power Solutions for Modern Oil and Gas Projects Dominik Pawlik, Product Line & Marketing Communication Manager Industrial Power Solutions, AEG Power Solutions www.aegps.com How UPS and electrical power systems can achieve the reliability required for harsh environments

Introduction Oil and gas consumption fuels the world’s economies, and demand for fossil energy and petrochemical products continues to grow. To meet this demand, companies are exploring new alternatives such as oil sands and more challenging oil fields such as deep water, with more emphasis on high quality, reliability and safety to ensure production availability and protect the environment. Whether they are in the up-, mid- or downstream segments, mission-critical applications in the oil and gas andpetrochemical industry all need highly reliable electrical power, with 100% availability. Even the smallest interruption in electrical supply can lead to dangerous outcomes, and costly damage. This reliability must be achieved for critical installations in hazardous environments, and can only be accomplished with expert

support, planning and project lifecycle management services.

Achieving Continuity How can you go about ensuring you get the best electrical power systems in place, to get the highest levels of reliability that can ensure the continuity of business operations? Firstly, a system must obviously include appropriate AC and DC power supply components. You need an Uninterruptible Power Supply (UPS) that has the correct specification to provide power if the main supply goes down, and you need the right solutions around it: inverters, rectifiers, chargers, DC systems and power supplies. All of these products must meet the most stringent international safety standards, and must comply with legislation on Electromagnetic Compatibility (EMC).

BORN FROM THE INDUSTRIAL REVOLUTION

LEADING THE ENERGY EVOLUTION More information: www.aegps.com Phone +971 4 6091 290 aegps@aegps.com

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SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

Even the smallest interruption in electrical supply can lead to dangerous outcomes, and costly damage

The back-up power systems need to be designed to cope with extremes of temperature and humidity, and in particular the high temperatures likely to occur in the field. They must also be protected against the damaging effects of dust and particulates, and of acid and hazardous materials. Corrosion resistance must be sufficient to ensure the products can last for decades, not just a few years.

Long Life With the right product, you’ve got the best chance of achieving high reliability and maximizing mean time between failure (MTBF). Predictive, pro-active maintenance will help ensure that each system works to its best potential, and that any problems can be solved before they impact availability. This is particularly true for remote and automated UPS systems that are designed to operate in unstaffed locations. Of course, you don’t just need the best product today – you need it for many years in the future. To ensure this, your supplier must take appropriate steps. For example, AEG Power Solutions manufactures its printed circuit boards (PCBs) in house, so it is not vulnerable to third party obsolescence. It also develops software in house, so it can be maintained and supported over a 20-year product lifetime.

Design Features With the correct design, back-up power solutions can achieve the best capacity, performance and reliability in the field. 4 | WWW.OFFSHORETECHNOLOGYREPORTS.COM

Reliability and redundancy must always be in the designers’ minds, with no single points of failure. Products must be highly customizable, and offered in a wide variety of configurations. This can include options such as different alarm systems and communications interfaces including RS232 / RS485, Modbus J-bus, Profibus DP, TCP / IP and IEC 61850 protocol. Cabinets may include a heater to cope with low temperatures or high humidity, and could be rated up to IP65 against intrusion. Systems should also have a small footprint to make the most of limited space. Let’s look at one example of a design feature that makes a difference: parallel operation. AEG PS uses flexible Multi M a s t e r Te c h n o l o g y a n d C A N b u s communication to enable up to 8 UPS to be connected in parallel with individual batteries or a central battery. This means that there is increased power, and more redundancy – which means higher reliability. Three microprocessors are used for the control system. Designed to provide troublefree power, the microprocessors continuously monitor and control the rectifier, inverter and static switch units. The UPS system includes N+1 fans – with a number of fans per UPS (depending on the power), and one redundant extra. Dual power sources are provided for control boards, and the entire system is provided in a robust industrial chassis with easy access. Fundamentally, UPS and power systems for harsh industrial applications – such as oil and gas – need to be far more robust than those


SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

designed for data centres and commercial environments. They need to be more reliable, with a higher degree of redundancy.

Quality Management High levels of quality in electrical back-up products are needed to ensure reliability, and to drive down total cost of ownership. But quality isn’t just about inspection and service – it starts with design. A commitment to quality is required throughout research and development, qualification, manufacturing and process testing. Continuous improvement can be ensured with a quality information system to track test data and conduct ongoing yield analyses. To give one example, AEG PS uses the quality management module of its SAP corporate information systems to monitor and guarantee quality in procurement and production, throughout the product life cycle. Additionally, a supplier measurement system ensures ISO standard performance of suppliers and sites worldwide. Effective testing is also vital. For example, AEG PS subjects its power units to simulated seismic events, which enable it to measure stress and potential weak points. The results are then fed back into the product design process, to ensure that the power protection systems meet or exceed specified seismic characteristics.

Global Service The quality of electrical products is not enough on its own. It must be backed up by highly effective service, anywhere in the world, which

delivers both scheduled maintenance and fast, 24/7 response to any problems. For example, AEG Power Solutions has a global network of services centres supported by over 150 field engineers and more than 100 certified service partners around the world. This kind of capability is essential to provide fast response times and expert troubleshooting, keeping systems up and running around the clock.

Example Project: Sadara Petrochemical Facility Sadara Project is the world’s largest integrated chemical facility ever built in a single phase. Now under construction in Jubail Industrial City II, on Saudi Arabia’s Arabian Gulf coast, Sadara is a joint venture between Saudi Arabian Oil Company and The Dow Chemical Company. When finished, it will include 26 integrated manufacturing plants. AEG Power Solutions is helping to ensure an efficient, reliable and easily manageable back-up power solution for all of the project’s production units. In 2010, it was selected as sole supplier of back-up AC and DC UPS systems and batteries for the Sadara Project. So far, AEG PS has supplied over 145 complete AC systems and 114 complete DC systems to the project, providing power security to the whole site. While the requirement is for 208/120V 60 Hz AC power, Sadara also calls for low power UPS with 125V DC batteries OpzStype including battery rack on stainless steel drip pans, bypass transformers, AC and DC isolation devices, top side cable entry and other customer adaptations.

BORN FROM THE INDUSTRIAL REVOLUTION

LEADING THE ENERGY EVOLUTION More information: www.aegps.com Phone +971 4 6091 290 aegps@aegps.com

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SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

AEG Power Solutions manufactures its printed circuit boards (PCBs) in house, so it is not vulnerable to third party obsolescence

AEG PS’ solution is based around its Protect 8 UPS line. Adapted to the project specifications, the modular architecture of Protect 8 enables AEG PS to rapidly customize each UPS to the specific requirements of each application within the project. Each EPC can create their own solution, using the same basic Protect 8 building blocks.

Industry Knowledge Overall, it is essential to talk to a power protection company that is experienced and experienced in delivering large international engineering projects. Finding a supplier who understands that safety, risk management, business continuity and

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operational excellence are the key elements of your business. Your electrical supplier must be able to demonstrate world-class front-end engineering and design (FEED), engineering, logistics, planning, execution and service. With the right back-up partner, you will be able to grow your business without concern for electrical energy supply. Highly efficient, user-friendly power backup solutions with high power density and outstanding performance will enable you to reduce your electricity, cooling, space and maintenance costs – while maximizing reliability, ensuring high levels of safety, and controlling your environmental impact.


SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

Cutting Costs: Can Oil Production Stay Financially Sustainable? Tom Cropper, Editor How the increasing costs of production is combining with a shaky economic outlook to make a challenging environment for oil producers.

T

HE OIL industry faces a difficult question: how much is out there and can we afford to extract it? Demand for oil and gas looks set to continue in the short to medium term, but with existing sources running dry the only options are to discover new sources, and tap unconventional wells. This is likely to explode the power requirements of drilling facilities. Before we understand the challenges being faced by new main and back-up power solutions, we need to look at the economic backdrop against which they are working.

The Future of Oil Demand Debate has raged for several years about the scale of long term growth for oil demand. BP expects a business as usual scenario which will see us hit 104 million barrels of oil per day in 20301. Analysts at Citi, meanwhile, believe it could peak within just a few years at 92 million barrels2, depending on developments in cleaner fuels, hybrid technology and renewable energies. All scenarios, though, agree that demand will continue to increase in the short to medium

term. The scale will simply depend on the pace of recovery in the west, thirst for oil in developing economies and the viability of alternatives. Most experts agree that there are sufficient oil reserves in the Earth’s crust, but doubts remain over whether or not it is economically viable to extract it. This debate has been contested most keenly this year in Scotland’s independence referendum. Proponents claimed that oil production in the North Sea would be enough to fuel Scotland’s economy, while critics responded that the North Sea has gone far beyond its peak. The Economist points out that production fell by 6% a year on average between 1999 and 20103. Since then it has dived by 40%. Conversely, though, others believe that tapping unconventional sources could spark a new gold rush in the region. The N56 business body, founded by Dan McDonald to promote a ‘Yes’ vote in the referendum believes techniques such as fracking could almost double estimates about the amount of oil which could be recovered in the area from 24 billion barrels to 45 billion barrels.

BORN FROM THE INDUSTRIAL REVOLUTION

LEADING THE ENERGY EVOLUTION More information: www.aegps.com Phone +971 4 6091 290 aegps@aegps.com

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SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

Proponents claimed

8% over the past three years against the S&P’s rise of 40%. Meanwhile other producers such as Royal Dutch Shell have experienced a fall of 2%. It all indicates a market in which the jittery investor holds sway. The increased costs of oil production have been enough to persuade major oil giants to abandon small and hard to reach pockets of oil. This, in turn, presents a considerable market opportunity for smaller companies, but their ability to capitalise depends greatly on whether or not they can make it pay.

that oil production in the North Sea would be enough to fuel Scotland’s economy,

The Role of Power

while critics responded that the North Sea has gone far beyond its peak

N56 advisor, Graeme Blackett said: “These finds are reminiscent of the early North Sea discoveries from over 40 years ago, such as the Brent Field, and would propel Scotland towards the top of the global league table in terms of oil and gas production.”

An Uncertain Future Critics, though, point out that accessing these sources, is and will remain, uneconomical due to the cost implications involved with extraction. The question of whether these reserves can indeed be tapped represents a major obstacle to the industry. Tapping resources means considerable costs in exploration, maintenance of aging equipment, advanced drilling techniques and operating at increased cost. This has forced drilling companies to take a close look at the figures. With the cost of production on the rise, oil producers are coming under additional pressure on the price at which they can extract oil. Speaking to the Financial Times, John Watson of Chevron notes that “$100 dollars per barrel is becoming the new $20 in our business.” The requirement to head into ever more challenging oil reserves, claims the article, means that the industry may need an oil price of at least $100 for a barrel of oil. Although the price of Brent crude oil currently at $1104 – up from the $20 mark it hit in the 90s, the future is not so good. Future prices show Brent crude at $91 per barrel which suggests the price pressures on oil producers are only going to intensify. Shares in most oil companies have also been lagging behind the S&P index. Chevron and Exxon have only risen

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Much of the answer to this question will rest with how an oil rig is powered. The electrical demands of an oil rig can be immense with the larger operations generating enough electricity to power a small city. This power must run constantly, have back-up capacity to cope with outages and peak consumption and be able to exceed its rated operating capacity. In analysing solutions, suppliers typically factor in at least a 10% overload capacity. Tapping unconventional or hard to reach sources will place a strain on the power capacity of rigs. Drilling at extreme depth will require bigger and more powerful equipment; gas injection to unlock heavy oil supplies, fracking, horizontal drilling – all these techniques will require increased power, which will come at increased cost. There is considerable scope for savings. Diesel and gas powered turbines are inefficient, especially when operating below optimal output. Environmental standards place an emphasis on a lower carbon footprint, while safety is paramount. Power outages have led to evacuations and hydrocarbon leaks in the past – if these occur in extreme environments, clean-up operations could be difficult or indeed outright impossible. Addressing these issues has seen the development of more efficient electrical generation units, power from the shore initiatives, renewables and advanced power cells. Each new development succeeds in producing increased functionality and efficiency. However, as the uncertainty among oil speculators demonstrates, the commercial case for future oil production remains unproven. Whether these new power supply technologies can be implemented in a cost effective way will determine the future shape of oil supply.


SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

Safety Net: How Back-up Power Can Be a Lifeline Jo Roth, Staff Writer The safety implications of power failure on board a rig can be severe, which is why back up power solutions are so important.

B

ACK-UP POWER generators are those things that you never want to need, but if you do, you’ll be glad you’ve got them. The consequences if you don’t have them can be severe. Equipment on board an oil rig faces an incredible range of challenging conditions including corrosion from water, salt air, corrosive chemicals, impact damage and general wear and tear. They may have to cope with a range of temperatures from extreme heat in tropical climates to ice and sub-zero conditions in arctic regions. The threat of extreme weather in the form of storms or hurricanes is ever present, while the need to provide continuous uninterrupted power make effective back-up solutions crucial in ensuring the safety of all crew aboard the rig.

The Dangers of Power Failure Continuous power outages were a problem for BP’s Deepwater Horizon rig in the months and weeks before the explosion which contaminated vast stretches of coastline. According to testimony from an engineer during the investigation, there is a high possibility that alarms and other safety equipment, which could have avoided the disaster, were not functioning5. Other power failures have led to near misses. In March 2014 the Helix Producer 1, a former Baltic Sea carrier which had been converted into a floating oil platform, experienced total power failure including back-up power. It began to drift and had to perform an emergency disconnect to seal off the production pipelines to avoid a major spill. Fortunately, the disconnect succeeded, but had it not done so, it could have resulted in a severing of the pipe and another major spill. In August, Shell announced that it had evacuated 148 people from the Nelson oil platform operating within the North Sea after a power outage. The decision to evacuate was taken after attempts to restart power failed. Shell took the decision to remove workers

from the rig, while a core crew of key personnel6 remained on board to restore power. The incident was not considered dangerous; the outage occurred at a time when the rig was already shut down for maintenance; the evacuation was simply part of the normal response to such situations, but outages such as these are far from isolated occurrences.

Preparing For Disaster The environments in which oil rigs operate are often severe. For example, let’s look at some of the oil platforms operating in the North Atlantic. Here they face extreme depths, rough seas, cold water temperatures, unpredictable weather and the occasional iceberg. Those operating in the Gulf of Mexico, for example, have to regularly evacuate and power down during the hurricane season, while those pushing forward into polar regions must cope with the freezing of equipment and extreme sub-zero temperatures. In all these regions, not only is the climate severe, but the remote location makes rescue and clean-up operations extremely challenging. As such, effective continuous operation, plus reliable back-up are essential. A key part of this involves rigorous testing of components to ensure they are rated up to and beyond the conditions they are expected to face. AEG Power Solutions, for example, subject equipment to rigorous simulated seismic events which measure the stresses and weak points of any infrastructure. These results can then be used in the design to provide updated products which can be considered fit for purpose. In doing this there is a considerable amount of customisation involved for the particular environments likely to be faced. For example, ice proofing may be necessary for cold climates while equipment must continue to function even in extreme heat found in tropical conditions. Even so, all the testing in the world may not be enough, which means contingency planning is crucial in the event of total equipment failure. For this reason AEG PS continues to

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SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

A key part of this involves rigorous testing of components to ensure they are rated up to and beyond the conditions they are expected to face

run after-sales support with a world-wide network of customer service centres and engineering staff who are capable of addressing equipment failure. As well as emergency back-up generators, though, battery back-up charging is crucial. This charges batteries during regular operation on board the rig, which provides redundancy capacity in the event of mains power failure. This allows time for equipment shut down and the evacuation of personnel from the rig.

Environmental Considerations The energy efficiency of the standard diesel and gas powered generators used on board rigs is poor and when generators operate at reduced capacity, their conversion becomes even less effective, heightening the cost and carbon footprint of the operation. Power options which can make use of excess well head gas, meanwhile, can reduce the need for flaring, a major source of carbon emissions. Solid oxide fuel cells are being developed which run on fossil fuels such as gas, jet fuel and propane. Their energy conversion is significantly higher than with conventional diesel generators. The emissions are only water vapour and carbon dioxide, eliminating nitrogen oxide pollutants from the atmosphere. These can be used as a more efficient way

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to generate power for those fields which are off the grid while those which are connected to the grid can use these as back-up power solutions selling energy back to the grid as it generates it. Other solutions focus on renewable energies through wind power and solar PV. These have historically been considered too fragile for the hazardous environments of oil platforms. However, manufacturers are now developing new solutions designed to meet certain power demands of a platform. Every KW that can be generated through renewables reduces the amount of diesel burned and as such improves the carbon footprint of the rig.

Looking to the Future If the future of oil production lies in deep water and unconventional exploration, the risks inevitably multiply. Any power supply needs to be uninterruptable and to continue functioning in the most extreme of environments. EPC contractors are rising to the challenge of delivering improved products and more rigorous testing and analysis tools to create a new world of high performance, durable and efficient power supplies. However, it is impossible to plan for all contingencies. This means that when things do go wrong it is essential to have a plan in place.


SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

The Cost of Doing Business James Gooding, Staff Writer The latest developments in electrical power generation are focusing on providing greater power output at a reduced cost.

R

ACING DRIVERS often receive this unwelcome piece of advice: “go faster but don’t crash,” as if doing one didn’t exponentially increase the chances of the other. In the business world, the mantra in tough economic times is “to do more with less” and it’s this challenge that now concerns the major oil companies. In order to sustain economic growth, demand for oil is continuing to rise, especially from fast developing economies in China, India, Brazil and Africa. Production will therefore have to continue on an upward curve despite reserves becoming increasingly scarce. Power generators will therefore have to increase their output, operate in increasingly harsh conditions and meet increasingly stringent environmental requirements. At the same time, their safety credentials must be impeccable with the ability to ensure continuous running, and safe redundancy in all climates. All the while, the profit margin for crude oil is contracting while the price of production is growing. In order to square the commercial circle, generators must be safer, cleaner, more powerful and less expensive. It’s a difficult brief to meet.

The Move from Diesel and Gas Conventional approaches have, in the past, relied on diesel and gas to power turbines which generate a DC electrical current for drilling machinery, safety equipment, lighting, heating, air conditioning and general operational features within the rig. DC current is preferred by rig operators because it has significant advantages over AC current in operating heavy duty drilling equipment. The capacity to deliver high levels of torque at low RPM means the driller can easily control. With remote switches on his control panel the driller can deliver power from the various generators wherever it is required. However, these old fashioned generators can be inefficient, take up considerable deck space, require regular maintenance and can be prone to failure. With operating budgets coming under pressure, every minute of downtime lost results in a significant impact on a company’s bottom

line. In addition, these systems have high CO2 and NOX emissions especially when operating at below 100% capacity. With authorities placing an emphasis on the need to reduce platform emissions, and drilling operations requiring increased power output, the strain is being felt in available deck space and, in particular, the cost efficiency of generator output. Partly because of this, investment in exploration is lower than it could be and oil is no longer seen as the cast iron banker that the stock market once thought. Areas such as the North Sea, and Gulf of Mexico have potentially enormous reserves of oil located at deep water and in unconventional sources, but extracting this in a cost effective way is a challenge. For this reason, recent years have seen most oil rigs migrate to hybrid AC/DC systems. This starts with an AC generator, which has advantages over DC because it can produce more power for a comparatively small footprint compared with equivalent DC generators. AC current also has advantages in that it is easier to distribute across the system. Current is produced by the AC generators which is then converted to DC through an SCR control panel which contains banks of banks of siliconcontrolled rectifier semiconductors. This can then be used to drive heavy duty equipment such as the mud pumps, draw-works and the top drive.

Effective Back-Up Such as system can improve the power output and efficiency of the system, but to truly deliver a step change, solutions are being developed which decrease the down time required through maintenance and repair. For this reason, many current systems, especially in deep water, include multiple generators sets running in parallel to produce the power needed for operations on board the rig. These replace individual generators and ensure that power continues to be delivered even with failure in one or more of the generators. These can be powered down for maintenance and repair while other generators can take up the slack.

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SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

Many current systems, especially in deep water, include multiple generators sets running in parallel to produce the power needed for operations on board the rig. These replace individual generators and ensure that power continues to be delivered even with failure in one or more of the generators

This configuration also enables greater efficiency by only using those generators which are needed to satisfy power outputs at any one time. Therefore, there are not individual generators operating at half capacity for half the time – instead you have a few generators operating at maximum output and therefore maximum efficiency to produce only the power required at any one time. As part of this system, redundancy capacity is provided through chargeable banks of batteries which ensure uninterruptable power supply, even in the event of complete systems failure. When this happens, there will be enough power remaining to continue operating mission critical systems, and to allow for safe and controlled power down of the entire site. On the Kasaghan oil field, for example, power is provided by four 1,500KW power generators, one 860KW back-up generator, with emergency power available through a 420KW diesel driven generator7. These can provide additional power output if necessary and also ensure mission critical operations continue to function in the event of shut down.

Future Developments However, while the sophistication of power solutions has improved over the last few years,

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operators are still looking for places where they can save money. Some of this comes in nonelectrical components such as the design of energy efficient living quarters which reduce power demands for heat or air conditioning through ergonomic design. Increasingly, though, some operators are beginning to feel that the future may lie in a hybrid solution incorporating at least some form of renewable power to ease fuel consumption. Solar panels and wind turbines have long presented opportunities, but have often been seen as being too fragile to operate in harsh conditions. Now though, providers are coming up with rugged and effective solutions to cope with offshore environments. This enables a portion of the power requirements to be taken without burning costly diesel or gas. Where this will have particular benefits is in opening up small oil reserves which had previously been considered uneconomic to tap. It enables small producers to swoop in and power small platforms to extract these sources. Doing this requires a range of high tech solutions, many of which are contained in the final article within this report focusing on the next generation of power solutions.


SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

A Look at the Future: The Next Generation of Power Supply Tom Cropper, Editor A need to cut cost and reduce a carbon footprint is shaping the way the next generation of back-up power solutions is developing.

W

HILE MODERN power supply systems have come a long way in reducing emissions and cost at the same time as improving efficiency and power output, oil and gas companies are still scrambling to achieve further gains. As such, the next generation of mains and back-up power solutions are pushing the boundaries further than ever before.

Pushing Technology Further The key feature of the latest generation of uninterruptable power solutions is robustness. Conditions in the extreme and harsh environments of deep water exploration are uniquely hazardous. Any solution will have to withstand impact damage, corrosive conditions, extreme temperatures and weather conditions. This is the ethos behind AEGPS’s latest Protect 8 range of UPS converters. They have been reinforced to be tough enough to withstand the rigours of operation on board an oil and gas rig. These can be used in parallel to produce a reliable uninterruptible power supply, with a reduced

footprint and improved efficiency over conventional generators. However, as the industry pushes forward, there are attempts to look at options beyond diesel based generators with ideas such as renewables and shore-based power attracting growing attention.

Renewables AEG PS themselves have been pushing renewables in a variety of applications. At the recent Intersolar conference8 they were showcasing their integrated power solutions, known as the ‘Power Island’, which make the most of both PV renewables and diesel. The feature can be used to power small villages or industrial complexes which are off the grid and has some potential in providing back-up power for an oil facility, while reducing the amount of diesel used. However, applying such technology for the oil and gas industry means ensuring it is robust enough to withstand the rigours of life on board the platform. Many renewable energy products have hitherto been considered too fragile to work

BORN FROM THE INDUSTRIAL REVOLUTION

LEADING THE ENERGY EVOLUTION More information: www.aegps.com Phone +971 4 6091 290 aegps@aegps.com

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SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

Overall, the project expects to make 35million euros of savings in investment costs and save 5.5 million euros in operating costs

in harsh and extreme environments, but an increasing array of renewable solutions are being put forward. Some operators are looking to use solar power to generate electricity for advance drilling operations9 such as steam injection to force heavy oil deposits to the surface. Currently, most steam injection units use natural gas to generate the power, but by using specially constructed glass solar panels, the costs and emission of this process can be reduced. In doing so, they help to make heavy oil reserves that had previously been considered uneconomical more viable. This is of particular interest to small oil companies which are looking to exploit those small heavy oil reserves which have been left behind by larger oil corporations. Shell are already employing this approach with small unmanned platforms known as monotowers10 to access these small reserves. Each is powered solely by renewables with wind turbines and solar panels generating just 1.2KW, which is sufficient to power operations. This compares with diesel or gas powered generators which would have provided more than 30KW of power, dramatically reducing the power footprint of these towers. The first platform of this kind was the Cutter platform which started operating in 2006, and since then Shell as added six more across the North Sea.

Alternatives to Diesel Another option which promises to reduce costs and emissions comes through micro-turbines. They have a substantially smaller footprint for similar power output compared with diesel generators and can be fuelled off waste wellhead gases. Therefore, they simultaneously reduce emissions through flaring and also save money on diesel costs. Furthermore, they possess only one moving part which means they require less regular maintenance, resulting in reduced downtime for repair and replacements. They can operate both in tandem with the primary power supply, providing relief during peak periods and switching into standalone mode11 once an outage has occurred, while they can also operate as a back-up only option connecting through an alternate terminal to swing into action once the outage has already occurred. By providing a more affordable, smaller and more efficient approach, they single handedly satisfy the demands of space saving, cost reduction and reduced emissions. However, this represents early stage

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technology, and doubts remain over its ability to function within extreme environments.

Power from the Shore Other operators hope to eliminate the need for on-platform power generation entirely. Norway is leading the way in on-shore power12 in a bid to reduce the emissions from on-site generation. As Rahul Chokhawala, Strategy Manager for HVCD at GE Global Research, stated in a 2008 paper. “Simple-cycle GTs (gas turbines) have remarkably low energy conversion efficiencies, particularly when operated at less than full capacity, which is often the case… A platform with a generating capacity of 100MW would typically release over 500,000 tons of CO2 per year, combined with the emission of about 300 tons of nitrogen oxide, a gas corrosive to both the environment and to people’s health.” Back-up power generation capabilities will still be required on board the rigs in case of interruption of power supply from the shore, but this approach promises considerable cost and emissions savings. One of the most interesting projects in this region is BP’s Valhall platform where they say they expect to all but eliminate carbon emissions from the platform. It uses 292km of HVDC (high voltage direct current) IRC maritime cable running from the shore to the oil rig in the North Sea. A separate optical fiber cable has been connected to it, adding to the delivery of superfast communications from onshore control centers. Overall, the project expects to make 35million euros of savings in investment costs and save 5.5 million euros in operating costs. The ability to replace noisy generators reduces vibration and noise levels contributing to a more benign working environment. Fire and explosion risks are reduced while removing the need for on-site power generation instantly produces substantial CO2 and NOX emissions reductions. The entire project is part of BP’s oil field of the future program. It boasts a high speed communications system that facilitates operation of the platform from the shore, reducing the numbers of permanent on-platform crew. However, a redundancy contingency does still exist to transfer control capacity to the oil rig in the event that the link to the shore fails. The effort invested in next generation power solutions illustrates the scale of the challenge that lies ahead: to produce reliable uninterrupted power which is clean, efficient and affordable – all within an extremely harsh environment.


SPECIAL REPORT: NEXT GENERATION BACK-UP POWER SOLUTIONS

References: Energy Outlook 2030: http://grandemotte.wordpress.com/2013/03/18/energy-outlook-2030/

1

Is peak oil demand just around the corner?

2

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/09/is-peak-oil-demand-just-around-the-corner/ Running on fumes:

3

http://www.economist.com/news/britain/21597890-scottish-nationalists-are-right-charge-britain-has-mismanaged-north-sea-oil-unionists Big oil counts the cost of tapping new sources:

4

http://www.ft.com/cms/s/b7861cc8-a51b-11e3-8988-00144feab7de,Authorised=false.html?_i_location=http%3A%2F%2F www.ft.com%2Fcms%2Fs%2F0%2Fb7861cc8-a51b-11e3-8988-00144feab7de.html%3Fsiteedition%3Duk&siteedition=uk&_i_referer=#slide0 5

Oil rig engineer testifies about power outages: http://www.americanscientist.org/science/pub/-860

6

Helix floating production platform loses power: http://gcaptain.com/helix-producer-loses-power-emergency-disconnect-talos-energy/

7

Kashagan offshore oil field project: http://www.offshore-technology.com/projects/kashagan/

8

AEG Power Solutions showcases products: http://www.aegps.com/en/news/press-releases/news/article/890/

9

The solar powered oil rig: http://breakingenergy.com/2011/07/14/the-solar-powered-oil-rig/

10

Wind and sun power one legged platform: http://www.shell.com/global/future-energy/innovation/inspiring-stories/monotower.html

11

Microturbines: http://www.capstoneturbine.com/company/faq.asp#ap3

12

Onshore power for offshore platforms: http://www.offshore-technology.com/features/featureonshore-power-for-offshore-platforms-4330517/

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BORN FROM THE INDUSTRIAL REVOLUTION

LEADING THE ENERGY EVOLUTION

With many years of experience in the design, manufacture and implementation of UPS systems for the Oil, Gas and Petrochemical industries, AEG Power Solutions offers innovative UPS systems and excellent customer service with a truly global reach. We specialize in delivering standard and customized AC and DC systems with dedicated on-site services complimenting your projects unique requirements. AEG Power Solutions delivers maximum up-time and energy efficiency, guaranteeing lower operating costs.

More information: www.aegps.com Telephone +971 4 6091 290 aegps@aegps.com


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