Economic Benefits of Implementing Alternative Energy: A Heavy Oil Fields Case Study
- Mohammad Al-Yatama (Kuwait Oil Company) | Abdulaziz Al-Khulaifi (Kuwait Oil Company) | Fernando J. Gomez (Kuwait Oil Company) | Rachid Ghouti (Kuwait Oil Company) | Sameh Afifi (Shell)
- Document ID
- Society of Petroleum Engineers
- SPE International Heavy Oil Conference and Exhibition, 10-12 December, Kuwait City, Kuwait
- Publication Date
- Document Type
- Conference Paper
- 2018. Society of Petroleum Engineers
- 4.1.5 Processing Equipment, 7.4.5 Future of energy/oil and gas, 7.4 Energy Economics, 5.4.6 Thermal Methods, 7 Management and Information, 7.1.6 Field Development Optimization and Planning, 7.1 Asset and Portfolio Management
- Economic Evaluation, Heavy Oil, Cost Improvement, Risk, Alternative Energy
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The cost per barrel is higher for Heavy Oil developments, and particularly thermal developments than for Conventional. Specific attention needs to be paid to the cost of Heavy Oil developments to ensure economic viability. The current cost basis for the heavy oil project shows that energy costs constitute some 45% of Unit Technical Cost and more than 65% of the OPEX per barrel. An OPEX cost improvement plan has been conceptualized to reduce the cost per barrel. Hence, the improvement plan focusses on Alternative Energy sources for steam generation.
In addition to the cost optimization, those initiatives will contribute heavily in achieving HH the Emir of Kuwait vision to cover 15% of Kuwait’s peak load with renewable energy by 2030". Based on current field development plans a feasibility study was carried out to determine the maximum practical and economic fraction of energy that can be contributed by renewables in heavy oil development. The bulk of the work was executed developing a model to study the supply-demand balance, as well as the gas prices ranges within the alternative energy solutions are viable.
To optimize the fuel gas consumptions two options were studied by utilizing the alternative energy solutions (solar steam and cogenerations) to generate steam instead of conventional boilers. On the power optimization side the study focused on the solar photovoltaic and wind energy. The lowest cost solution is to use direct solar steam and allow the steam injection at a variable rate - this may require some upgrades to allow fully- automatic flow control throughout the steam distribution system. With this method (and a typical weather year) solar fractions of approximately up to 40% may be possible. It may be possible to increase this further if the requirements for minimum steam flow in the steam distribution network can be reduced. With the use of thermal storage, the solar fraction can be increased to approximately 60-80%, however steam from storage is likely to cost significantly more than direct steam, especially as direct molten-salt coupled with oilfield- quality water has not yet been proven commercially.
As renewable power alone will not be able to meet the full demand of Heavy Oil field development, hence the utilization of cogeneration will be a feasible solution in order to supply the required steam demands in addition to solar and also to supply the required power in addition to solar PV. The redundant power generated by the cogeneration may be supplied to the Electrical Grid. The economics analysis illustrates that all renewable options considered have positive NPV. The economics for both PV and wind are robust, where maximum deployment is advised, subject to grid connection constraints. For solar steam, the economics are partially affected by the once-through steam generators (OTSG) CAPEX already spent, but still show positive NPV. Anticipated costs reductions for solar steam technology as a consequence of greater deployment of the technology over the next few years could further improve the NPV. Including the cogeneration, solar steam and less conventional steam generators in the future projects will maximize the NPV of the heavy oil.
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