Selection of Low Carbon Field Development Plans Based on Lifecycle Energy Modeling
Authors: Mallinson Theo 
Published: October 2011

Lifecycle energy modeling can be used as a primary design input during early project development. This requires a life of field facility model adapted to early concept design which allows operational costs and revenue collection to be considered against capital cost impact. Significant overall project savings can be discovered with this analysis even in cases where CAPEX impact is unfavorable. A design model based on a production depletion curve is used to set facility capacity requirements and to allow calculation of operational data such as yearly production achieved, fuel gas usage, carbon emissions value, and deferred production due to downtime. Production concepts can then be subjected to a quantitative analysis of external influences, such as effect of carbon emissions cost on project economics. A sensitivity case is developed using a production concept based on an all electric facility with major users (gas injection compressors and water injection pumps) employing variable frequency electric motors. Calculated carbon emissions, fuel gas usage, and expected availability for this case are compared against a base case utilizing discrete gas turbine drives. These lifecycle cost methods and analyses can supplement the conventional CAPEX focus during initial design phases of onshore and offshore facilities, a period in which some of the most important facility design decisions are made.

Introduction

Large projects in the upstream oil and gas industry are planned through a stage gate process, in which progressively more capital is appropriated as the engineering design matures and cost estimate accuracies increase. In early phases, the primary focus is on reservoir engineering activities associated with resource definition, rather than on production facilities design. Additionally, multiple different development concepts are being considered simultaneously and as a result the level of facilities engineering detail for any one concept is constrained. Nevertheless, the installed cost of production facilities and pipelines typically accounts for more than half of the overall project, so economic feasibility of a project is directly impacted by early estimates of these costs. Software tools are often used at this concept stage for assessment and selection of facility configurations, typically using peak fluid rates as the primary sizing basis and capital expense (CAPEX) as the primary selection criteria.

This CAPEX focus exists for several reasons. Notably, during the design phase upstream sector projects focus on plateau production, the maximum design rate for the facility, normally spanning the first three to five years of production. In the midstream and downstream sectors base capacities are more often enhanced over the years with revamp and expansion projects compared to upstream facilities. Secondly, in the upstream sector there is a perception there is essentially no cost for the raw hydrocarbons beyond the capital cost of the project, especially during the plateau period. Operating cost control is typically a sunset activity receiving focus after the plateau period has passed, becoming more important towards the end of field life. Contrast this to the midstream sector, essentially a tariff based business, and the downstream sector, where a daily balancing act is required between incoming raw materials, the selected product mix and the cost to process, and outgoing product pricing. Lastly, upstream projects are handed off to an operations group, often a separate legal entity, after startup. As a result, estimating and stewardship of operational costs during design is often not a primary function of the project team. Adaptation of lifecycle energy modeling techniques commonly used in the downstream sector can address each of these typical practices and enable the results to be used alongside CAPEX as a primary design input during early project development.