Beyond the pilot phaseMay 11, 2017
TOGY talks to Hussein Shehab, GlassPoint’s Kuwait country chairman, about the company’s work on the Oman solar EOR pilot and how the pilot’s success has translated into project goals in Kuwait. GlassPoint is known for designing and manufacturing solar steam generators for EOR.
GlassPoint Solar provides solar steam generators for the oil and gas industry to facilitate EOR. Hussein Shehab, GlassPoint’s Kuwait country chairman, talks to TOGY about the country’s strategy for diversifying its energy sources in the wake of depressed oil prices. While Kuwait has one of the lowest global recovery prices, the country was not immune to the effects of the mid-2014 fall in barrel prices. Glasspoint plans to provide steam EOR operations in Kuwait because of the expanded oil production target of 4 million bopd from Kuwait Petroleum Corporation and the need for international expertise and knowledge to enhance reservoir production.
• On steamflooding: “To enter the Kuwait market, companies cannot afford to rely on outside sources of LNG. They should have their own. If the day comes when gas is no longer available, then at least there should a solar option. In addition, the cost of the LNG may go up.”
• On the pilot project: “Our 7-MWth [7-thermal-MW] pilot project is fully operational and has successfully been producing steam since late 2012. The pilot was delivered safely, on time and on budget, and exceeded all performance targets, producing 50 tonnes of emissions-free steam per day. The system has been operating successfully for more than four years and continues to achieve 98% uptime and has proven its ability to produce rated steam even during severe dust and sandstorms.”
Shehab also discussed the innovation behind Glasspoint’s technology and the need to optimise resources. Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with Hussein Shehab below.
Are GlassPoint’s solar technologies unique to the market?
GlassPoint’s solution is the only technology that was built from the ground up to meet the unique needs of the oil and gas industry. With our proven technology, solar energy can economically produce emissions-free steam needed to produce oil.
In Oman, natural gas used for oil production accounts for almost a quarter of total gas consumption and this continues to grow. Burning one precious commodity to produce another precious commodity is inefficient when it can be used for higher-value applications. GlassPoint’s solar steam generators can reduce gas used for thermal EOR by up to 80%.
Our pilot project with Petroleum Development Oman (PDO) has been successfully running for four years now and through it we have showed the massive benefits solar energy can bring to further enhance oil production in a much reliable and environmentally friendly manner. The pilot has also established that our technology is purpose-built to withstand harsh desert climates during severe weather conditions.
As a result, we were contracted by PDO to build Miraah, which will be one of the world’s largest solar plants upon completion. This project will deliver more than 1 GW of peak thermal energy, generating 6,000 tonnes of steam per day. The steam will be used in PDO’s thermal EOR operations to extract heavy and viscous oil at the Amal oilfield in southern Oman.
Does this method use electricity generated by its own panels or is an external source needed?
Our solar technology produces thermal energy in the form of steam. It provides a zero-emissions alternative to steam produced by burning fuel, harnessing the sun’s free and renewable energy to produce steam for thermal EOR. We do use a small amount of electricity to run our plant, about 1 MW to produce more than 100 MW of steam. That electricity can come from the grid or from photovoltaic panels.
What is the completion percentage of your solar EOR project in Oman?
Construction of Miraah, which will be one of the world’s largest solar plants upon completion, is progressing faster than planned and is currently under budget. The project consists of 36 greenhouse blocks and is on track to deliver steam from the first four greenhouses before the end of 2017.
Once complete, Miraah will save 5.6 trillion Btu of natural gas each year. The project is also expected to reduce carbon emissions by more than 300,000 tpy, which is equivalent to permanently taking 63,000 cars off Omani roads.
How large will the Kuwaiti project be compared to the Omani one?
Given Kuwait’s target of significantly boosting heavy oil production within the next two decades, Kuwait offers one of the biggest market opportunities for solar powered oilfields. Depending on the scope and plans of KOC [Kuwait Oil Company], it may involve multiple locations and stages.
Our technology has the potential to cut the amount of steam required for their projects in half where there is solar energy, creating substantial savings and allowing natural gas to be directed towards higher value applications such as LNG exports, power generation, desalination and industrial development.
How economically viable is the current amount of LNG needed to sustain the heating of water?
In Kuwait, the leading method of producing heavy oil is steamflooding, which burns large volumes of imported natural gas and other costly fuels to produce steam. This has an effect on export revenues and other gas dependent industries, subsequently contributing heavily to carbon emissions and domestic energy consumption.
To meet both The emir’s vision of achieving 15% of Kuwait’s energy capacity through renewables by 2030, and also KPC’s vision to achieve 15% of its own energy requirements through renewables by 2020, the amount of overall LNG burned will need to be cut. Solar offers a viable and effective solution to boost both heavy oil production and the use of renewable energy.
What can you tell us about the research that has been done on solar?
Research has mainly focused on cost reduction to make solar energy an overall more viable option for use domestically. The reason there is such a focus on solar today is that we can no longer depend on a single source for energy.
The new investment trend of converging renewable energy with conventional oil production is coming of age in many regions around the world and is now a mandatory move for Kuwait to secure its future in both the oil and renewables sectors.
We have our own research centre in Silicon Valley, California, where we are always trying to improve on our proprietary solar technologies. Our pilot plant in Oman provided us with significant key learnings that in turn helped us continue to improve our technology and reduce costs. We anticipate an even greater reduction in costs once we apply everything we have learned in Kuwait.
What key lessons were learned from the pilot project in Oman?
Our 7-MWth [7-thermal-MW] pilot project is fully operational and has successfully been producing steam since late 2012. The pilot was delivered safely, on time and on budget, and exceeded all performance targets, producing 50 tonnes of emissions-free steam per day. The system has been operating successfully for more than four years and continues to achieve 98% uptime and has proven its ability to produce rated steam even during severe dust and sandstorms.
The pilot has validated the fact that our technology works in harsh oilfield conditions even during severe weather conditions as well as the viability of using steam generated from solar energy for heavy oil production. Compared to typical solar thermal designs with exposed reflectors, our novel enclosed structure enables us to use a fraction of the raw materials throughout the entire system.
This has a cascading effect on cost – from reduced material and installation costs, to using smaller, off-the-shelf motors and drive systems used to track the sun. Since our reflectors are low-cost, we pack them much closer together to achieve the highest ground efficiency of any solar thermal system. This is particularly important for steam generation on oilfields, where area is limited by active wells, roads and transmission lines.
The success of the pilot paved the way for the development of Miraah with every lesson we learned being applied in every aspect of Miraah’s design, construction and development.
What target does Kuwait have in terms of renewables?
His Highness the Emir of Kuwait has set a target of achieving 15% of energy capacity through renewables by 2030 as part of Kuwait’s efforts to combat climate change and global warming. Kuwait’s electricity consumption relies almost entirely on oil products and natural gas for power generation.
The country is facing rapidly growing energy demand. As a response to these shortages, Kuwait is planning to increase power generation capacity in the next decades with plans to capitalise on its wind and solar energy potential. Kuwait has also set energy efficiency targets to reduce energy consumption by 10% in the residential and industrial sector, as well as to improve power generation efficiency by 5% in the utility sector.
What is KOC doing to reach its heavy oil production goals of 60,000 bopd by 2018 and 270,000 bopd by 2035?
I cannot speak on behalf of KOC but I can assure you that they are doing their utmost to reach their production targets. As production of heavy oil in Kuwait has yet to be done on a massive scale, the first phase will be a learning experience for all stakeholders involved. Whatever projects are undertaken will offer us the unique opportunity to learn, identify ways of improving, and explore other methods of enhancing production levels.
KOC knows that they have to start taking action and with time they will find better and more cost-effective ways to do it.
How do companies in Kuwait deal with lower oil prices? Is it ever an option to stop production?
Oil is Kuwait’s main source of revenue and will play an important role in the nation’s economic future given the wealth of resources remaining in its oilfields. As a result, stopping production is neither a viable nor a realistic option economically.
In the current economic climate with the price of crude still considerably low, KPC may optimise production or cut costs in other ways. However, they will not stop projects related to the maintenance of existing facilities or build new facilities to enhance the production, given the immediate and long-term impact that would have on Kuwait.
I remember when I was in KOC and the prices dipped to USD 8 per barrel, we did not stop. We did not alter our projects, because they were all long-term. Stakeholders are looking at the situation with an eye on the future to ensure the continued prosperity of the nation 10, 20 and even 30 years from today.
How soon do you think a complete shift to solar EOR can occur? Is it possible?
Due to the flexibility and cost-effectiveness it provides, solar EOR could well take off sooner than expected. KOC has always been keen to investigate and innovate with solar projects. It is also part of the vision of the emir of Kuwait.
While things may be moving a bit slowly at the moment, once it catches on, things could start moving a lot faster. That is completely dependent though on the stakeholders involved and what they consider to be the best way forward for Kuwait’s oil and gas industry. They are definitely interested, but keen to figure out the best strategy to apply to Kuwait.
To that end, we have hosted many executives and engineers in Oman looking to learn more about solar EOR and how we can apply it in Kuwait.
One of the ambitions of Kuwait’s solar projects has always been to save natural gas. Do you think Oman is similarly motivated?
Both Oman and Kuwait have large reserves of heavy oil and import a lot of natural gas to extract it. Deploying solar EOR in Oman would reduce the amount of subsidised gas allocated to oil production, which could then be redirected to the private sector, create thousands of direct and indirect jobs, in addition to having a lasting impact on economic growth.
What are some of the reasons why Kuwait is such an attractive target for GlassPoint?
Kuwait has tens of billions of barrels of heavy crude in its oilfields. According to KPC’s Kuwait strategy, Kuwait plans to tap into its heavy oil reserves to increase oil production capacity to 4 million barrels per day by 2020. Given Kuwait’s joint dedication to increasing production while subsequently focusing on renewables, the nation offers a major opportunity to deploy solar on its oilfields.
Our technology is a perfect fit given its ability to harness the power of solar to produce heavy oil, cut natural gas consumption in oilfields and operate in harsh desert environments.
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