White Paper - Utilizing Gas Turbines To Consume Stranded Ethane 2013-10-07[3][2]
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Utilizing Gas Turbines To Consume Stranded Ethane Edward Woods, Consultant Many gas processing facilities that strip natural gas liquids (NGL's) from wet gas are finding themselves unsure of what to do with stranded ethane as a result of an increasing glut, minimal growth in market demand and no costCeffective transport options. Gas processing operators are looking at the possibility of holding stranded ethane, limiting their ability to process gas. By extension, their customers face an unattractive prospect of shuttingCin production and/or curtailing drilling programs. Combustion turbines, located onsite, can consume ethane, power gas processing facilities, provide heat to gas fracturing towers and allow continued gas production. Situation Growth in shale gas fields and unconventional plays has significantly contributed to our nations natural gas reserves. The Marcellus Shale is one example of this booming market. In the western Marcellus, gas coming out of the ground is ‘wet’ – having a mix of natural gas and NGL's. Constituents within NGL's include ethane, propane, butane and pentanes. To meet market requirements, the NGL's need to be separated, or stripped, from the methane to ensure the natural gas sent to consumers has a consistent BTU content. This ‘stripping’ process requires heat to crack the gas and electricity to drive circulation pumps and compressors. The majority component of the NGL's is ethane, which is used in the manufacture of plastics, antiC freeze and detergent to name a few. Development in the Marcellus and other fields has led to an oversupply of ethane in the market, depressing prices to $0.23/gallon ($3.45/mmBTU). Transport of ethane is costly and can exceed the value of the product if it needs to be moved more than a couple hundred miles to market. As a result, operators of stripping plants are ‘rejecting’ as much ethane as possible back into the pipeline as one alternative to manage the oversupply. Limits on BTU content of pipeline gas restrict the amount of rejected ethane. Complication Expanded drilling programs and no new demand for ethane are on the horizon. It is predicted that an additional 200,000 bbls of ethane per day will be entering the market next year, putting additional downward price pressure on the commodity for the foreseeable future. If the ethane distribution system is maxed out, and there is no home for subCspec gas or excess ethane, operators will not be able to dispose of the commodity 1 and be forced to limit gas production 2 . Stripper plants located any distance from a market have to deal with stranded ethane. These facilities, due to their location, have high electricity costs and frequent power outages due to storms and high demand on the grid. Faced with not being able to transport ethane into the market has the knockCon effect of the stripping facilities not being able to process gas, leading to shutCin wells and reduced drilling programs. As a result, owners of stripping plants are looking at new ways to utilize ethane and in the process, optimize their operations. Options / Considerations The current market price of ethane at $0.23/gallon ($3.45/mmBTU) is on par with that of natural gas, making it attractive as a fuel. Using it as a fuel at the point of stripping from the gas stream for onsite power generation and the benefits multiply. The ability to operate without being impacted by restrictions in the ethane disposal market, allows customers to continue with gas field development activities and it becomes a very attractive proposition. 1 Midstream Energy Group, EIA NGL Workshop. 2012C06C06 2 The State Journal, “Chesapeake: Lack of market for ethane is limiting gas production” 2013C03C23
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Transcript of White Paper - Utilizing Gas Turbines To Consume Stranded Ethane 2013-10-07[3][2]
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Utilizing(Gas(Turbines(To(Consume(Stranded(Ethane(Edward&Woods,&Consultant&
Many&gas&processing&facilities&that&strip&natural&gas&liquids&(NGL's)&from&wet&gas&are&finding&themselves&unsure&of&what&to&do&with&strandedðane&as&a&result&of&an&increasing&glut,&minimal&growth&in&market&demand&and&no&costCeffective&transport&options.&&Gas&processing&operators&are&looking&at&the&possibility&of&holding&strandedðane,&limiting&their&ability&to&process&gas.&&By&extension,&their&customers&face&an&unattractive&prospect&of&shuttingCin&production&and/or&curtailing&drilling&programs.&&Combustion&turbines,&located&onsite,&can&consumeðane,&power&gas&processing&facilities,&provide&heat&to&gas&fracturing&towers&and&allow&continued&gas&production.&&Situation(Growth&in&shale&gas&fields&and&unconventional&plays&has&significantly&contributed&to&our&nations&natural&gas&reserves.&&The&Marcellus&Shale&is&one&example&of&this&booming&market.&&&&In&the&western&Marcellus,&gas&coming&out&of&the&ground&is&‘wet’&–&having&a&mix&of&natural&gas&and&NGL's.&&Constituents&within&NGL's&includeðane,&propane,&butane&and&pentanes.&&To&meet&market&requirements,&the&NGL's&need&to&be&separated,&or&stripped,&from&the&methane&to&ensure&the&natural&gas&sent&to&consumers&has&a&consistent&BTU&content.&&This&‘stripping’&process&requires&heat&to&crack&the&gas&and&electricity&to&drive&circulation&pumps&and&compressors.&&The&majority&component&of&the&NGL's&isðane,&which&is&used&in&the&manufacture&of&plastics,&antiCfreeze&and&detergent&to&name&a&few.&&Development&in&the&Marcellus&and&other&fields&has&led&to&an&oversupply&ofðane&in&the&market,&depressing&prices&to&$0.23/gallon&($3.45/mmBTU).&&Transport&ofðane&is&costly&and&can&exceed&the&value&of&the&product&if&it&needs&to&be&moved&more&than&a&couple&hundred&miles&to&market.&&As&a&result,&operators&of&stripping&plants&are&‘rejecting’&as&muchðane&as&possible&back&into&the&pipeline&as&one&alternative&to&manage&the&oversupply.&&Limits&on&BTU&content&of&pipeline&gas&restrict&the&amount&of&rejectedðane.&&Complication(Expanded&drilling&programs&and&no&new&demand&forðane&are&on&the&horizon.&&It&is&predicted&that&an&additional&200,000&bbls&ofðane&per&day&will&be&entering&the&market&next&year,&putting&additional&downward&price&pressure&on&the&commodity&for&the&foreseeable&future.&&If&theðane&distribution&system&is&maxed&out,&and&there&is&no&home&for&subCspec&gas&or&excessðane,&operators&will¬&be&able&to&dispose&of&the&commodity1&and&be&forced&to&limit&gas&production2.&&Stripper&plants&located&any&distance&from&a&market&have&to&deal&with&strandedðane.&&These&facilities,&due&to&their&location,&have&high&electricity&costs&and&frequent&power&outages&due&to&storms&and&high&demand&on&the&grid.&&Faced&with¬&being&able&to&transportðane&into&the&market&has&the&knockCon&effect&of&the&stripping&facilities¬&being&able&to&process&gas,&leading&to&shutCin&wells&and&reduced&drilling&programs.&&As&a&result,&owners&of&stripping&plants&are&looking&at&new&ways&to&utilizeðane&and&in&the&process,&optimize&their&operations.&&Options(/(Considerations&&The¤t&market&price&ofðane&at&$0.23/gallon&($3.45/mmBTU)&is&on&par&with&that&of&natural&gas,&making&it&attractive&as&a&fuel.&&Using&it&as&a&fuel&at&the&point&of&stripping&from&the&gas&stream&for&onsite&power&generation&and&the&benefits&multiply.&&The&ability&to&operate&without&being&impacted&by&restrictions&in&theðane&disposal&market,&allows&customers&to&continue&with&gas&field&development&activities&and&it&becomes&a&very&attractive&proposition.&
&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&1&Midstream&Energy&Group,&EIA&NGL&Workshop.&2012C06C06&2&The&State&Journal,&“Chesapeake:&Lack&of&market&forðane&is&limiting&gas&production”&2013C03C23&
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Ethane&is&a&‘hot’&gas,&with&an&energy&content&of&1,783&BTU/scf3.&&It&has&a&fast&flame&front&and&produces&high&exhaust&temperatures.&&Reviewing&prime&movers,&and&their&ability&to&burnðane&to&produce&power&and&heat&finds&few&available&options:&Reciprocating&Engines.&&GaseousCfueled&reciprocating&engines&are&built&in&a&wide&range&of&power&outputs,&making&them&easy&to&size&for&the&power&demand.&&High&compression&ratios&of&reciprocating&engines&and&internal&components&such&as&pistons,&valves&and&heads&would&rapidly&wear&due&to&high&combustion&and&exhaust&gas&temperatures&associated&with&usingðane&as&a&fuel.&&One&project&to&fuel&engines&at&a&gas&processing&plant&with&up&to&88%ðane&was&initiated&in&20114,&but&there&is&no&other&mention&of&the&project&that&would&indicate&success.&Combustion&Turbines.&&Combustion&turbines&are&ideally&suited&for&powering&gas&processing&plants.&&Both&are&designed&for&continuous&operation&with&minimal&intervention&and&low&maintenance.&&The&majority&of&combustion&turbines&configured&for&oil&and&gas&applications&are&simpleCcycle&machines&with&high&pressure&ratios&between&incoming&air&and&the&combustion&stage.&&The&high&pressure&ratio&of&approximately&14:1&found&in&most&simpleCcycle&turbines&is&to&reduce&emissions&and&increase&thermal&efficiency.&&This&pressure&ratio&limits&the&BTU&range&of&fuels&used&in&the&turbine&to&pipeline&gas&and&wellhead&gas&(900C1400&BTU/scf).&&Use&of&highCenergy&fuels,&such&asðane,&can&rapidly&damage&combustion&components&within&the&turbine.&Developments&in&Combustion&Turbine&Technology.&&Low&pressure&ratio&turbines&are&able&to&operate&on&a&wide&range&of&fuels&up&to&1,900&BTU/scf5,&but&have¬&been&widely&accepted&due&to&their&poor&efficiency.&&Recent&developments&with&low&pressure&ratio&turbines&include&the&use&of&a&recuperator&to&improve&thermal&efficiency.&&A&recuperator&is&a&heat&exchanger&mounted&in&the&exhaust&stream&that&transfers&heat&energy&to&combustion&intake&air.&&Efficiencies&of&low&pressure&ratio&turbines&with&recuperators&rival&that&of&high&pressure&ratio&turbines&and&are&considered&a&proven&technology.&These&technological&developments&result&in&a&low&pressure&ratio&turbine&with&a&recuperator&can&operate&onðane&or&natural&gas,&whichever&is&more&economical&with&the&efficiency&of&their&high&pressure&ratio&counterparts.&&These&turbines&can&be&fueled&withðane,&allowing&them&to&be&a&power&source&at&gas&processing&facilities.&&Two&turbine&platforms&that&utilize&these&technologies&are&the&FlexEnergy&MT&and&DresserCRand&KG2.&&Solution(The&glut&ofðane&for&the&foreseeable&future&will&place&continued&price&pressure&on&the&product.&&Transportation&costs&of&moving&the&product&to&market,&if&there&is&one,&will&rapidly&negate&any&expectation&of&revenue&when&it&is&sold.&&Usingðane&as&a&fuel&in&combustion&turbines&at&the&point&of&extraction&from&the&gas&stream&is&a&viable&solution&and&supports&upstream&development&activities.&&Combustion&turbines&with&an&integrated&heat&recovery&system&using&onsite&fuel&can&reduce&operational&costs&and&has&the&potential&to&reduce&emissions&when&replacing&older&onCsite&boilers6.&&With&that&being&said,&one&now&would&need&to&determine&how&to&maximize&this&opportunity.&&To&take&advantage&of&the&onsite&fuel&and&reap&the&economic&benefits,&the&combustion&turbine&package(s)&will&need&to&be&sized&to&power&requirements&of&the&facility,&have&acceptable&installation&costs,&connect&to&the&fuel&supply,&and&interface&with&the&grid.&&Overall,&these&items&may&seem&complicated,&but&when&looking&at&the&details,&they&are¬.&Sizing&for&Power&Requirements.&&To&improve&reliability&and&be&able&to&rotate&turbines&during&annual&maintenance,&it&is&recommended&that&at&least&two&turbines&be&used&to&power&a&gas&processing&facility.&Turbine&Installation.&&Installation&costs&can&vary&from&site&to&site.&For&this&reason,&it&is&recommended&that&the&turbine&package&be&designed&for&outdoor&operation&and&&skidCmounted.&&A&skidCmounted&turbine&package&will&allow&for&placement&on&a&level&gravel&pad.&&Should&operational&requirements&change,&the&skidded&turbine&can&be&hoisted&onto&a&trailer&and&transported&elsewhere.&
&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&3&http://www.engineeringtoolbox.com/heatingCvaluesCfuelCgasesCd_823.html&4&http://www.bizjournals.com/pittsburgh/blog/energy/2011/03/KeystoneCmidstreamCethaneCfuelCengines.html&5&http://www.flexenergy.com/pdfs/FlexEnergy_MT333_Spec_Sheet.pdf&6&http://www.cleaverCbrooks.com/uploadedFiles/Internet_Content/Reference_Center/Insights/Boiler%20Emissions%20Guide.pdf&
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Fuel&Supply&Connections.&&Temperature&and&pressure&ofðane&can&vary,&depending&on&the&fractionation&process&and&where&in&the&system&it&is&tapped&to&fuel&the&turbine.&&One&needs&to&identify&these¶meters&when&selecting&a&fuel&gas&pressure®ulator&for&the&turbine.&&In&extreme&instances,&a&fuel&heater&may&be&required&to&bring&the&fuel&temperature&above&minimum&turbine&requirements.&Hot&Fluid&Circuit&Connections.&&Hot&fluid&systems&used&at&gas&fractionating&facilities&can&benefit&from&utilizing&exhaust&heat&from&the&turbine.&&On&a&turbine&with&an&integrate&hot&water&system,&connections&to&the&existing&facility&hot&water&loop&are&completed&by&incorporating&the&turbine&hot&water&with&the&facility&hot&water&loop.&&In&some&instances,&a&heat&exchanger&may&need&to&be&used&to&isolate&systems.&Electrical&System&Connections.&&Most&utilities,&and&the&state&public&utilities&commission&they&operate&under&have&‘net&metering’&rules.&&These&are®ulations&and&guidance&for&interfacing&with&the&grid.&&Should&a&stripping&plant&operator&choose&to&export&excess&power&to&the&grid,&the&rules&and®ulations&are&designed&to&prevent&damage&and&risk&to&health&of&maintenance&personnel&working&on&power&lines.&&To&properly&interface&with&the&grid,&a&utility¶lleling&switchgear&will&be&required.&&A&switchgear&in&this&configuration&will&allow&the&turbines&to&power&the&facility&and&if&needed,&draw&any&additional&from&the&grid.&&In&the&event&of&excess&power&and&a&resell&agreement&is&in&place,&it&can&be&configured&to&allow&export&to&the&grid.&Renewable&Energy.&&Some&states&offer&incentives&for&distributed&power&generation&and&CHP.&&Depending&on&the&state,&the&turbine&and&its&configuration,&the&CHP&system&may&qualify&for&tax&credits,&renewable&energy&credits&or&both7.&&&What&would&an&ideal&system&look&like?&&To&maximizeðane&consumption,&combined&output&power&of&the&turbines&would&match&the&maximum&electrical&load&of&the&facility.&&Heat&recovered&from&the&turbine&exhaust&will&generally&equal&or&exceed&heat&requirements&for&the&gas&fractionation&process.&Placement&of&the&skidCmounted&turbine&packages&will&be&in&close&proximity&to&the&electrical&distribution&system&and&facility&boilers.&&A&packed,&level&gravel&pad&is&sufficient&for&turbine&placement.&&A&concrete&foundation&will&suffice&as&well.&Upon&connecting&fuel&lines,&electrical&cables&and&communications,&the&turbines&undergo&commissioning&to&confirm&performance.&&After&startCup,&the&system&can&be&monitored&for&service&needs&and&operational&abnormalities.&&Factory&Certified&Technicians&will&be&readily&dispatched&should&the&need&arise.&&Normal&turbine&maintenance&is&1x/year&to&change&air&filters&and&gearbox&oil.&&( (
&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&7&http://www.dsireusa.org&
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Project(Example(Facility:&Gas&Stripping&Plant,&PA&
• Incoming&gas:&14%ðane&• 6C7mmcfd&flow&• 570&kw&electrical&load&• Power:&$0.09/kwh&
• 1&mmBTU/hr&gas&to&boiler&• 10&days&annual&outage&• Ethane&deduct&on&NGL&• Excess&BTU&waiver&on&gas&
Turbines&• 2xMT333&(333kw&ea)&• Outdoor&configured&• Skid&base&–&Mounted&on&gravel&pad&
• Integrated&heat&recovery&• Utility&Parallel&Switchgear&• Ethane&compatible&gas®ulator&
Project&• Net&Metering&• 8&hour&annual&maintenance&
• Microturbine&Tax&Credit&*&• Section&179&Tax&Credit&**&
Benefits&• Energy&Security&• Electricity&Savings&• No&Boiler&Fuel&Spend&• Lower&overall&site&emissions&• Net&Metering&Revenue&
• Margin&–&High&Value&NGL's&• Tax&Credit&–&Microturbine&*&• Tax&Credit&–&Section&179&**&• Renewable&Energy&Source&***&• Continued&ability&to&process&gas****&
Payback:(Less(than(2.5(Years(&Summary(Strandedðane&can&be&used&in&select&turbines&as&a&fuel&to&provide&power&and&heat&to&stripper&plant&operations.&&When&properly&configured,&combustion&turbines&are&costCeffective,&add&value&and&provide&multiple&benefits.&&&&&&&&About&the&author.&&&Edward&Woods&has&over&20&years&experience&in&business&development,&marketing,&product&development,&product&management&and&value&creation&in&power&generation&and&emissions&technologies&in&the&oil&&&gas&and&power&generation&industries.&&His&work&with&Fortune&100&and&MidCCap&companies&as&well&as&portfolio&holdings&of&equity&firms&has&resulted&in&accurately&identifying&new&market&opportunities&and&customer&needs&and&the&concerted&development&of&new&products,&technologies,&associated&marketing&and&sales&strategies.&&&Ed&earned&a&Bachelors&in&Mechanical&Engineering&Technology&and&Masters&of&Science&in&Management&from&Purdue&University&and&an&MBA&from&Tilburg&University&in&Holland.&&&He&is&a&member&of&the&Purdue&University&College&of&Technology&Industrial&Advisory&Committee,&and&has&been&awarded&numerous&patents&for&power&generation&and&emissions&reduction&technologies.&Ed’s&nonCwork&activities&include&skiing,&mountain&biking,&cooking&and&wine.&Email:&[email protected]& Skype:&Energy_Optimized& Phone:&765C409C2191&&This'paper'was'written'under'contract'to'Keystone'Drill'Services,'Somerset,'PA'www.keystonedrill.com'&*&&&Customer&to&consult&with&tax&advisor&for&applicability.&&http://www.irs.gov/irb/2008C34_IRB/ar10.html#d0e2049&**&Customer&to&consult&with&tax&advisor&for&applicability.&&www.section179.org&***&http://www.dsireusa.org&****&Not&included&in&payback&analysis( &
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Utilizing(Gas(Turbines(To(Consume(Stranded(Ethane(&Discussion(Points(Glut&of&Ethane&
• Growing&production&of&gas&translates&into&growing&production&ofðane.&• No&newðane&demand&for&the&foreseeable&future.&• Increasing&production&and&no&corresponding&increase&in&demand&may&drive&prices&lower.&• Pipeline&companies&may&pull&highCBTU&/ðane&waivers.&• Processing&plants&may&see&discounts&on&subCspec&gas&• With&no&market&demand&to&drive&takeaway,&disposal&ofðane&may&be&an&issue.&
Upstream&Impact&• If&gas&processors&cannot&process&gas&due&to&restrictions&on&disposal&ofðane,&upstream&
producers&may&be&restricted&on&amount&of&gas&they&can&produce.&• Restrictions&on&gas&production&may&lead&to&deferment&of&drilling&programs&or&shutCin&wells.&
Ethane&Is&A&‘Hot’&Gas&• As&a&‘hot’&gas,&the&number&of&‘prime&movers’&that&can&burn&the&fuel&is&very&limited.&• Burning&pureðane&in&reciprocating&engines&rapidly&damages&heads,&valves&and&other&
engine&parts.&• Burning&pureðane&in&high&pressure&ratio&turbines&damages&combustors&• There&are&two&known&turbine&platforms&with&lowCpressure&systems&and&patented&
recuperators&can&burn&pureðane.&• Difficult&to&transport&due&to&handling&requirements.&• Costs&mount&for&each&mile&it&is&transported.&• Usingðane&at&‘Point&of&Extraction’&from&gas&stream&is&most&economical.&
Stripper&Plants&Can&Benefit&From&Onsite&Turbines&• Use&of&onsite&turbines&to&burnðane&can&utilize&a&stranded&product&• Turbines&can&provide&onsite&power&and&power&security&• Integrated&heat&recovery&systems&on&turbines&can&be&used&to&replace&onsite&boiler,&reducing&
natural&gas&consumption.&• In&some&states,&a&turbine&configured&with&heat&recovery&is&considered&a&Renewable&Power&
source&*.&Stripper&Plants&Benefit&From&Onsite&Power&Generation&
• Utilizes&a&stranded&fuel&• Eliminates&power&outages&due&to&high&uptime&• Can&Replace&/&Supplement&boilers&• Operators&have&ability&to&process&gas&without&restriction&or&worry&of&no&takeaway&• NGL’s&and&processed&natural&gas&may&receive&a&higher&price&due&to&lowðane&• Net&metering&revenue&is&excess&power&is&exported&• Short&payback&at&today’s&prices&
&&&&
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