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SPE 172004-MS

Economics Of Steam Generation For Thermal EOR


Marwan Chaar, GlassPoint Solar
Milton Venetos, Wyatt Enterprises
Justin Dargin, University of Oxford
Daniel Palmer, GlassPoint Solar
Copyright 2014, Society of Petroleum Engineers
This paper was prepared for presentation at the Abu Dhabi International Petroleum Exhibition and Conference held in Abu Dhabi, UAE, 1013 November 2014.
This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been
reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society of Petroleum Engineers, its
officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Society of Petroleum Engineers is prohibited. Permission to
reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright.

Abstract
The thermal EOR steam generation projects in Gulf oilfields are on such a large scale that they affect an entire countrys
economic position. As such, the policies related to oilfield steam generation should be decided at the national level using the
cost of the marginal fuel. This paper calculates the steam cost for three methods: 1) once-through steam generator (OTSG) 2)
once-through heat recovery steam generator (OT-HRSG) and 3) solar steam generator (SSG).
We have created detailed performance and economic models of the steam generation methods and used them to calculate the
levelized cost of energy and the Fuel Break Even (FBE). We explore the environmental and economic burdens on the cost of
steam generation. The effect of fuel price on the cost of steam is also analyzed with a focus on the marginal fuel price.
The analysis shows that the fully burdened steam costs using $6/MMBTU fuel, for OTSG, OT-HRSG, and SSG are $27/ton,
$20/ton, and $17/ton, respectively. The FBE for SSG vs. OTSG is $4.95/MMBTU when the OTSG is unburdened and
decreases to $2.25/MMBTU when the environmental burden of Carbon Cost is added. The FBE for SSG vs. OT-HRSG is
$7.70/MMBTU when burdened with Power Opportunity Cost and $4.50/MMBTU when the additional burdens of Carbon
Cost and Water Opportunity Cost are accounted for.
Finally, we analyze the limitations of OT-HRSG in an isolated oilfield where the electric:thermal demand necessitiates
electricity-matched cogeneration. This limitation along with the steam cost at the marginal fuel price provides the decisionmaker with a steam supply curve.

1.1

SPE 172004

Introduction/ Global Oil Outlook

Of the remaining oil reserves in the world, only 30% is considered conventional or light oil (with API of 22 or lighter),
while the remaining 70% is heavy1. According to the IEA, boosting oil recovery of these heavier crudes could unlock around
300 billion barrels of oil.
There are three main categories of EOR: 1) thermal 2) miscible gas injection 3) chemical. Thermal methods are mainly
applicable to heavier crudes, at shallower depths, and these thermal methods represent the majority of global EOR production,
accounting for 2.3 million barrels per day in 20132.
Some of the largest Thermal EOR projects in the world are in Canada, Russia, Venezuela, Indonesia, California, Oman, and
soon to be Kuwait. The steam generated for Thermal EOR consumes 1.7 TCF per year of natural gas. Thermal EOR projects
tend to be very long-term projects by oilfield standards. In California many of the oldest steam flood projects have been
running for 40 or 50 years. The super giant heavy oilfields of the Middle East may produce for a century or more. With natural
gas becoming increasingly constrained and expensive in many parts of the world, there is a need to better understand the
economics of steam generation.
As this paper discusses the combination of traditional sources of generating steam with solar steam generation, we will focus
on countries with sufficient sunshine and constrained natural gas supply, such as Oman, Kuwait, Sauid Arabia, Bahrain, and
Egypt. The EOR potential of these countries is estimated at 475 billion barrels of oil3.
1.2

Steam Generation For Thermal EOR

We have considered three methods of steam generation:


1) Fuel-fired once through steam generator (OTSG)
2) Co-generation with a power plant using a once-through heat recovery steam generator (OT-HRSG)
3) Solar steam generator (SSG) using concentrating solar power (CSP)
The first method, OTSG, directly burns fuel to generate steam. OTSGs have the most flexible operations but are most
dependent on fuel costs.
The second method uses the gas turbines high temperature flue gas as waste heat to produce steam in a once-through heat
recovery steam generator. The OT-HRSGs steam production is linked to the GTs power production. Operators sometimes
add supplementary firing to the OT-HRSG, called Duct Burners. The steam produced from duct burning has the advantage of
re-balancing the electricity vs. thermal demand but it is directly linked to fuel price.
The third method, SSG, uses mirrors to concentrate the suns energy to generate steam. The three operating plants are: the 21Z
(2011) and Amal SSGP (2012) projects use Enclosed Trough technology and the Coalinga project (2011) uses Tower
technology. SSG has the highest CAPEX of the methods considered but consumes no fuel.

OTSG

OT-HRSG

SSG

SPE 172004

The pros and cons of these three methods are summarized below:
Method

Pros

OTSG

OT-HRSG

SSG

1.3

Low capital cost per ton of steam produced


Short construction time
Flexible and controllable steam output
Low capital cost per ton of steam produced
Increases system efficiency of simple-cycle power
4
plant
Does not consume fuel
Does not produce GHG emissions
5
Can extend field life

Cons
-

Cost of steam highly dependent on fuel price

Linked directly to power generation


Indirectly consumes natural gas
Duct burning dependent on fuel price
High capital cost
Dependent on weather

Middle East Fuel Pricing

The fuel price throughout the countries in the GCC and the broader Middle East vary greatly, but the common theme is its
subsidization. While the current cost of production in the Gulf non-associated fields is approximately $5-8/MMBTU6 the price
at which gas is sold to the end user is typically a fraction of that price, averaging just $1.50/MMBTU in the GCC region7.
Justin Dargin, has written extensively on the topic of gas pricing in the region and has argued that price reform is an essential
step to increasing availability of natural gas and improving energy efficiency in these countries.
Another factor facing these countries is the price of the marginal fuel. Countries like Oman and Kuwait are gas-constrained
and the marginal fuel is either imported LNG8 (or lower LNG exports) or diesel & other liquid fuels.
For the reasons above, we have chosen to run our economic analysis using two tiers of gas prices; the first is representative of
true gas production costs in the region for non-associated gas fields and is taken to be an average of $6/MMBTU. The second
is the LNG market price (or opportunity cost9), taken to be $13/MMBTU10. In addition to pricing, the region is facing a
shortage of fuel availability.
1.4

Economic & Environmental Concerns

There are two significant concerns of fuel-fired steam generation. The first is the broader nationwide implication of diverting
natural gas from steam generation to economic development. An increase in the amount of gas available for domestic use will
allow for investments in industry and subsequent job creation. The second concern is the environmental impact of greenhouse
gas emissions. These two concerns are addressed in the Economic Burden and the Environmental Burden sections below.
2.1

Economics Of Steam Generation

The first step in analyzing the cost of steam generated from the various methods is to calculate each on a stand-alone basis. We
have chosen to compare the methods using the real Levelized Cost Of Energy (LCOE) of the steam produced, as calculated by
the Solar Advisor Model (SAM):
LCOE real = NPV(Total Cost Of Ownership) nominal discount rate / NPV(Total Energy Produced) real discount rate
The inputs to the numerator include cost data (CAPEX, OPEX, and fuel cost) as well as economic and environmental burdens
(discussed in Sections 2.1.1 & 2.1.2 below). The input to the denominator is the steam produced, which is dependent on the
performance of the method chosen (discussed in Section 2.2 below). A fair comparison between the three methods of steam
production can only be achieved if all methods are fully burdened. The burdens considered are economic and environmental.
2.1.1

Economic Burden

The economic burden considered for the OT-HRSG is the opportunity cost of the waste heat from the GT exhaust. The
decision maker may assume that waste heat into the OT-HRSG is free. This is not accurate. In reality, the OT-HRSG is
dependent on the price of natural gas by its direct connection to power generation. The waste heat has an economic value that
is equal to the opportunity cost of producing more power and water in an optimized plant configuration.

SPE 172004

Fig. 1: Energy Flow For Different Scenarios Of Electricity Production

Electricity''
34%!
Fuel!
100%!

Steam!
44%!

Electricity''
55%!
Fuel!
100%!
Water'!
35%!

Waste!
22%!
Energy flow for SC w. OT-HRSG

Waste!
10%!
Energy flow for CC w. Water desalination

Fig. 1 above illustrates the energy flow for two different scenarios of fuel use. On the left, a Simple Cycle (SC) power plant is
connected to the OT-HRSG to produce steam. On the right, a Combined Cycle (CC) power plant produces more power for the
same fuel consumption and it can also produce water with no additional energy use.
The Power Opportunity Cost is calculated by comparing the economic value created with the more efficient CC power plant
(PP) with the SC configuration using an OT-HRSG. This Opportunity Cost is a result of two factors: 1) the LCOE of power
generated by a CC PP (LCOECC) is lower than that of a SC power plant (LCOESC) and 2) for the same amount of fuel, the CC
PP will produce more electricity than SC, calculated by the inverse of the Heat Rate (1/HR). Thus, the formula for the Power
Opportunity Cost is:
Power Opportunity Cost = { (LCOE SC LCOE CC) * (1/HR CC 1/HR SC) } * Fuel Consumed SC
The Water Opportunity Cost is calculated by comparing the Cost of Water (CW) produced by a combined water and power
plant using a thermal desalination method, such as Multi-Effect Distillation (MED), with an independent water plant using an
electrical desalination method, such as Reverse Osmosis (RO). We assumed that the MED plant will replace the condenser in
the CC PP and is sized accordingly. We then compared the CW of the cogeneration MED plant with a stand-alone RO plant
where its cost of electricity is LCOESC. The difference in the CW for the two configurations is then multiplied by the total
potential water production in the combined water and power plant configuration to calculate the Water Opportunity Cost for
the Fuel Consumed. Thus, the formula for the Water Opportunity Cost11 is:
Water Opportunity Cost = (CW RO CW MED) * (Water Produced in Combined Water & Power Configuration)
Another indirect benefit of displacing natural gas from steam generation is the direct and indirect jobs it creates. This has not
been considered here. No economic burdens have been applied to the OTSG.
2.1.2

Environmental Burden

The environmental burden considered is the Carbon Cost and it is applied to the OTSG and OT-HRSG methods. The
emissions are calculated using the Emission Factors as defined in (EPA AP42)12. For the OT-HRSG, since fuel is burned (and
carbon emitted) in the GT, it is necessary to allocate the emissions fairly between power and steam. We assume that in the
cogeneration plant (GT/OT-HRSG) the emissions allocated to electricity production are calculated using the emissions
intensity of a more efficient CC PP (tons CO2 per MWh). Therefore, the emissions allocated to steam production are the
difference between the total emissions of the SC PP and the calculation mentioned above. Thus, the formula for the OT-HRSG
Carbon Cost is:
OT-HRSG Carbon Cost = { Emissions SC (Power SC * Emissions Intensity CC) }* (Carbon Cost per Ton)
The OTSG Carbon Cost is simply the Emissions & Carbon Cost per Ton.
We have used a carbon cost of $40 per ton/CO2, based on the range of internal carbon prices used by the oil majors (Total:
$34, Shell & BP: $40, Exxon Mobil: $6013).

SPE 172004

2.2

Performance Models

The denominator of the LCOE calculation is the total energy produced by the various methods. To accurately calculate the
LCOE of the various steam generation methods, it was necessary to build performance models that take into account regional
weather data.
The combined cycle power plant and OT-HRSG systems analyzed in this paper both rely on heavy duty gas turbine engines
from General Electric to obtain the waste heat they utilize to generate steam. Gas turbine performance is heavily dependent on
the prevailing ambient conditions, particularly ambient temperature. The tables below show the impact of ambient temperature
on the performance of the GE 9E.03 (PG9171E) and 9F.05 engines that were chosen for our analysis:

15C
Net Power

GE 9E.03 Performance Data


40C

130,000.0

108,506.0

Heat Rate (LHV)

10,403.0

10,933.0

Heat Cons. (LHV)

1,352.4

Exhaust Flow

1,496.8
541.7

560.0

Exhaust Temperature

15C
Net Power

kW

59F

104F

130,000.0

108,506.0

kJ/kWh

9,860.0

10,362.0

BTU/kWh

1,186.3

GJ/hr

1,281.8

1,124.4

MMBTU/hr

1,330.7

x10^3 kg/hr

3,300.0

2,934.0

x10^3 lb/hr

Deg. C

1,007.0

1,040.0

Deg. F

GE 9F.05 Performance Data


40C

104F

299,000.0

235,660.0

299,000.0

235,660.0

Heat Rate (LHV)

9,295.0

9,880.0

kJ/kWh

8,810.0

9,364.0

BTU/kWh

Heat Cons. (LHV)

2,779.2

2,328.2

GJ/hr

2,634.2

2,206.7

MMBTU/hr

Exhaust Flow

2,400.2

2,075.9

x10^3 kg/hr

5,292.0

4,577.0

x10^3 lb/hr

643.5

657.2

Deg. C

1,190.0

1,215.0

Deg. F

Exhaust Temperature

kW

59F

kW

kW

The 9E.03 was chosen as the prime mover for the OT-HRSG due to its use in similar projects around the world and its ability
to produce about 6,000 TPSD of 100 bar, 80% quality EOR steam. The 9F.05 was chosen as the prime mover for our reference
2 x 1 combined cycle power plant since it represents a power plant with a net LHV efficiency of just over 58%, which is
comparable to the efficiency of recently built combined cycle plants in the GCC region.
As a result of the impact that ambient conditions have on gas turbine power, heat rate, exhaust flow rate and exhaust
temperature a model that can predict the response of the whole plant is needed to accurately assess plant performance on an
annual basis. We used the EBSILON Professional heat and mass balance software14 from STEAG Energy Services in
Germany in conjunction with the VTU Energy OEM Gas Turbine library add-in15 for EBSILON to build steady state heat and
mass balance models of an OT-HRSG boiler and a 2 x 1 combined cycle power plant. These models were then run to predict
fuel consumption, electricity output, steam production and other key parameters for every hour of a year using hourly TMY3
format ambient condition data for Amal, Oman. We chose Amal as the reference point because we have SSG performance data
from that site and wanted to make sure all methods of steam generation are compared at the same location. The following key
results were obtained from these model runs:
Annual Fuel Consumption

9,378,095

MMBtu/yr

Annual Steam Production

2,192,081

metric tons/yr

Annual Net Electricity Production


Net GT Average Annual Net LHV Efficiency
GT Average Net LHV Heat Rate

882,079
32.4
10,538

MWhe/yr
%
Btu/kW-hr

OT-HRSG Heat Balance Model Results GT @ 85% Load

The results above are for 100% availability. In the LCOE model, we applied an availability of 92% bringing the total annual
steam production down to 2,016,715 metric tons, or 5,525 tons per day. Also, the OT-HRSG model assumes an operation at
85% load, which is common practice in the oilfield. We also ran the OT-HRSG model at 100% load and the results are shown
in Endnotes16.
The OT-HRSG model is an unfired system with a low pressure economizer section and recirculation to keep the stack
temperature above the sulfuric acid dew point. The design point was chosen so that the boiler could produce 75.7 kg/s of 100

SPE 172004

bar 80% exit quality steam with 5C ambient air and 55C produced water from the oil field. The EBSILON process flow
diagram from the model is shown below:

Fig 2. EBSILON Model of EOR OT-HRSG

The EOR OT-HRSG model incorporates assumptions listed in the Endnotes.17


An EBSILON heat and mass balance model of an unfired, 2 x 2 x 1 (2GTs/2HRSGs/1ST) combined cycle power plant was
constructed based upon GEs 9F.05 300 MWe class heavy duty gas turbine engines. The plant utilizes two, unfired, 3 pressure
level (High Pressure (HP), Intermediate Pressure (IP) and Low Pressure (LP)) reheat Heat Recovery Steam Generators
(HRSGs) to raise steam for a single, 305 MWe condensing steam turbine with once through sea water cooling. Basic design
parameters for this plant were chosen from experience and some GE Reference (GER) papers18,19 on GEs Steam and Gas
(STAG) power plant product line.
Annual Fuel Consumption
Annual Net Electricity Production

42,689,075

MMBtu/yr

7,147,863

MWhe/yr

Plant Average Annual LHV Net Efficiency

57.12

Plant Average Annual Net LHV Heat Rate

5,974

Btu/kW-hr

2 x 1 9F.05 Based CCGT Heat Balance Model Results

The plants process flow diagram is shown in the Endnotes20. The CCGT model incorporates the assumptions shown in the
Endnotes21.
The SSG performance model is built off GlassPoints proprietary model and operating experience at the SSGP plant in Amal,
Oman22.
2.3

LCOE Models

The LCOE models for the OTSG, OT-HRSG, and SSG have been built to provide a fair comparison of the methods. One
factor affecting the LCOE is the size of the project. We have assumed the SSG and OTSG are built to match the size of the
OT-HRSG, which, as discussed above, produces 5,525 TSPD, on an annual average. Also, the same macro-economic
assumptions were used for all methods of steam generation, such as nominal discount rate (8%), inflation (3%), and project
life (25 years).

SPE 172004

2.3.1

SSG Model

To match the steam generated by the OT-HRSG, we require 32 blocks of GlassPoint solar steam generators. We assume an
availability of 99% based on GlassPoints experience at SSGP. The CAPEX used is based on GlassPoints estimate of a
project this size.
The SSG steam LCOE was calculated to be $17 per ton of steam.
2.3.2

OTSG Model

We have assumed each OTSG has a firing rate of 85MMBTU/h, which corresponds to 800 TSPD. To match the steam
generated by the OT-HRSG and to account for an availability of 90%, we require 8 OTSGs. The OTSG efficiency is assumed
to be 85%.
The OTSG steam LCOE was calculated with and without the environmental burden of Carbon Cost and the results are
displayed in Fig. 3 below:

Cost of Steam (LCOE - $/ton)

70

Unburdened
+ Carbon Cost

60

SSG

50
40
30
20
10
0
0

10

12

14

16

18

20

Fuel Cost ($/MMBTU)


Fig. 3: LCOE Of OTSG Steam Generation

2.3.3

OT-HRSG Model

The OT-HRSG CAPEX was based on estimating software and a premium added for installation at an oilfield (due to higher
costs of HSE and logistics).
The OT-HRSG LCOE model is also affected by the power plant models generated for the SC and CC configurations (Power
Opportunity Cost). For the power plants, heat rates were taken from the EBSILON Professional heat balance models built for
this study. Overnight capital costs were from various press releases on similar projects and from EIA's April 2013 Capital
Cost Estimates for Utility Scale Electricity Generating Plants Report23. Fixed and Variable Operations & Maintenance costs
were also taken from the EIA report. CAPEX and OPEX for the SC/OT-HRSG plant were escalated to account for higher
installation and operation costs at the oilfield. Capacity factors were from our models or EIAs Annual Energy Outlook 201424.
The PP LCOE calculated is the real LCOE calculated using the National Renewable Energy Lab (NREL) method25.
This LCOE calculation neglects taxes, tax incentives, government subsidies and capital expenditures not directly related to the
cost to procure and install the plant equipment. It represents the minimum price at which energy from the project must be sold
in order for the project to cover its costs. It is a useful metric for fairly comparing one project to another.
Also, the OT-HRSG LCOE is affected by the water model, described in the Water Opportunity Cost and whose input is taken
from the Fichtner MENA Regional Water Outlook.
The OT-HRSG steam LCOE was calculated with and without the economic and environmental burdens and the results are
displayed in Fig. 4.

SPE 172004

Fuel Price = $6/MMBTU

Fuel Price = $13/MMBTU


35

25

19.0

20

19.8

19.8

15.1
15

10

30
Cost of OT-HRSG Steam (LCOE $/ton)

Cost of OT-HRSG Steam (LCOE $/ton)

30.5

30.5

28.8

24.9
25

20

15

10

5.0
5

5.0
5

Fig. 4: OT-HRSG Steam Generation Cost

We also calculated the OT-HRSG burdened and unburdened steam costs across a range of fuel prices as shown in Fig. 5.
45

Unburdened
w. Power Opp. Cost
+ Carbon Cost
+ Water Opp. Cost
SSG

Cost of Steam (LCOE - $/ton)

40
35
30
25
20
15
10
5
0
0

10

12

Fuel Cost ($/MMBTU)


Fig. 5: OT-HRSG Steam Generation Cost vs. Fuel Cost

14

16

18

20

SPE 172004

2.4

Summary Of LCOE Results

Fig. 6 shows a summary of the fully burdened LCOE for the three methods of steam generation and their relationship to the
fuel price.
70"

OT-HRSG"
OTSG"
SSG"

60"

Cost%of%Steam%(LCOE%/%$/ton)%

Gas

Diesel

LNG

50"
40"
30"
20"
10"
0"
0"

2"

4"

6"

8"
10"
12"
Fuel%Cost%($/MMBTU)%

14"

16"

18"

20"

Fig. 6: LCOE vs. Fuel Cost

What is clear in Fig. 6 is that the question of which method of steam generation is best? is answered only by another
question what is the fuel cost? These questions should be considered at the countrywide level using the marginal fuel. As
mentioned in Section 1.3 many countries in the Gulf region have multi-tiered and subsidized fuel costs, which do not reflect
the true economic value. If a country is subsidizing gas to, say, $1.50/MMBTU and is also importing LNG at $13/MMBTU,
the fuel price that should be used in decision making should be the marginal cost, which is LNG.
From Fig. 6, we can see that at current market prices of diesel26, the fully burdened costs of steam from an OTSG and OTHRSG are $58 per ton and $38 per ton respectively. At current market prices of LNG, these costs are $45 and $31 per ton for
the OTSG and OT-HRSG, respectively. The cost of steam from SSG is independent of fuel price and is $17 per ton of steam.
The LCOE for all scenarios are shown in the Table below:
Scenario
SSG
Fuel Price: $6/MMBTU

Fuel Price: $13/MMBTU

2.5

Unburdened
w. Power Opp. Cost
+ Carbon Cost
+ Water Opp. Cost
Unburdened
w. Power Opp. Cost
+ Carbon Cost
+ Water Opp. Cost

LCOE ($/ton)
OTSG
20
27

17

38
45

OT-HRSG
5
15
19
20
5
25
29
31

FBE Models

A useful economic indicator that allows a decision maker to compare the fully burdened cost of steam from the mentioned
methods is the Fuel-Break Even price, or FBE. This fuel price is where the total cost of ownership from the fuel-fired steam
generation method (either OTSG or OT-HRSG) is equal to that of the SSG. The FBE allows a decision maker to compare the
economics of the various methods of steam generation based on the marginal cost of fuel.

10

SPE 172004

The FBE for SSG when compared with a fully burdened OTSG is only $2.25/MMBTU and the FBE for SSG when compared
with a fully burdened OT-HRSG is $4.5/MMBTU. The FBE for various burden scenarios is shown in the Table below:
Scenario

FBE ($/MMBTU)
SSG v. OTSG
SSG v. OT-HRSG

Unburdened

4.95

w. Power Opp. Cost

7.70

+ Carbon Cost

2.25

+ Water Opp. Cost

4.90
4.50

Note: As discussed above, the unburdened OT-HRSG has no dependence on fuel price therefore it is not possible to calculate
its FBE. Similarly, the OTSG does not have Power or Water Opportunity Costs so they were not calculated.
2.5.1

Factors Affecting The Economics Of Steam Generation

The economic calculations above are all based on the specified assumptions. However, the economics of steam generation is
dependent on various inputs ans sensitivities should be calculated in order to refine the output. Some of these factors include:
OTSG

3.1

OT-HRSG

SSG

Marginal Fuel Price

Solar Radiation

Carbon Price

Project Size

Oilfield energy requirements

Once the economics of the various methods of steam generation are calculated, it is necessary to determine the mix of the
various methods of steam generation. To do so, the decision maker needs to understand the energy requirements and
limitations at the oilfield. Mike Welch summarized the decision-making process for steam generation methods as follows:
a gas turbine cannot exactly match the electrical load required and provide all the heat required. This gives the
Operator a choice of whether to install a heat-matched system or an electricity-matched system. In a heat-matched system,
the Gas Turbine is selected on the basis of its ability to provide all the heat required, which means that it is likely to
generate far more electrical power than the production facilities themselves require. This necessitates the export of surplus
electrical power to the local power network. In an electricity-matched system, the Gas Turbine is selected to provide just
the power required by the production facilities, while the shortfall in steam is made up by installing additional
conventional fired boilers.27
3.2

Macro-Economic Planning

The analysis of the economics of steam generation has to be considered in the broader macro-economic policy and planning of
a government or its national oil company. The first step is to understand the decision-makers marginal fuel cost, which will
specify the preferable method of steam generation. The next step is to understand the limitations to producing steam from the
OT-HRSG. By definition, steam from cogeneration is linked to electricity production, which is constrained by the oilfield
power demand or the ability to export power to the grid.
It is necessary for the decision maker to analyze the combination of steam generation methods using two different lenses: 1)
Isolated Oilfield or 2) Connected Oilfield.
3.2.1

Isolated Oilfield

In this scenario, the ability to generate steam using an OT-HRSG is limited by the total power requirement in the oilfield. This
necessitates an electricity-matched system.
The isolated oilfields energy split between thermal and electrical demand is highly dependent on the type of field (how much
heavy oil vs lighter crude) and its boundary (how many reservoirs are operated within the field boundary). For a stand alone
heavy oilfield upstream electricity demand may be only 2% of total energy demand during a steam flood. In an electricitymatched system, the power plant is sized to deliver the power required by the field. The Electrical:Thermal energy split
delivered by a cogeneration plant is approximately 1:1.528. To illustrate the limitations of the isolate oilfield, we have assumed

SPE 172004

11

that 10% of the fields energy requirements is electric29. Fig 7 illustrates this scenario where the cogeneration plant is
electricity-matched (delivers all electric energy demand) and delivers an additional 15% of total energy demand as thermal
energy. Thus, the cogeneration OT-HRSG delivers 17% of thermal energy demand. The remaining 83% of thermal demand
must be satisfied with another method of steam generation, either OTSG or SSG.
Fig. 7: Electricity-matched Cogen System

100%

100%

90%

80%

Thermal

83% of
Thermal

70%
60%
50%
40%

Field Energy Demand

Field Energy Demand

90%

80%
70%
60%
50%
40%
30%

30%
20%

17% of Thermal

Electric

20%
10%

10%
100% of Electric

0%

0%
Demand

3.2.2

Cogen

OTSG /SSG

Demand

Cogen

Connected Oilfield

In this scenario, we assume that the entire country (or region) is connected to the same power grid as the oilfield. The oilfield
can use a heat-matched system and export the surplus power to the grid.
Brandt and Unnasch have studied30 the energy requirements at various California thermal EOR fields and found that the
average operator generates only 40% from its steam from cogeneration using OT-HRSG. The implementation of large-scale
cogeneration for thermal EOR in a grid-connected oilfield has macro-economic implimcations that should be studied further
and should be considered the topic of another paper.
3.2.3

Mukhaizna Case Study

Fig. 8: Mukhaizna Is Located Far From Power Demand

Muscat$

The Mukhaizna oilfield in Oman, operated by Oxy,


produces roughly 120,000 BOPD in one of the largest
steamflood projects in the world. Steam is produced using
a combination of OT-HRSGs and OTSGs. There are two
types of OT-HRSGs at Mukhaizna: (Note: estimates are
based on public domain data and may not be an accurate
representation of the current field facilities and operations)
1) Two NEM OT-HRSGs, each connected to a GE Frame
9E GT, capable of delivering about 6,000 TSPD each from
cogeneration, in addition to about 10,000 TSPD from Duct
Burners31. These GTs deliver power to a central grid.

500$km$

Mukhaizna$

2) Approximately 10 En-Fab OT-HRSGs, each connected


to a Solar Titan 130 GT, capable of delivering about 1,100
TSPD each32. The Solar Titan GTs have a total capacity of
roughly 100MW, which is used within the field (no export
of power). The Mukhaizna field has the ability to import
surplus power from the grid.
In addition to the OT-HRSGs, Mukhaizna also has over
seventy OTSGs.

350$km$

Salalah$

OTSG

12

SPE 172004

Mukhaiznas cogeneration steam production is limited to roughly ~30% of total steam demand because of the mismatch
between thermal and electrical energy demand. Mukhaizna has the advantage of being connected to the grid, allowing it to use
a higher fraction of cogeneration steam. If it was an isolated oilfield, the OT-HRSG steam would be limited to ~15% of
thermal energy demand.
3.3

Hybrid Steam Generation

Steam produced by SSGs is inherently dependent on solar radiation and will produce variable output. Two SPE papers out of
Petroleum Development Oman33 and Stanford34 studied the effect of rate injection rate variation on oil production and
concluded that the recovery rate and ultimate recovery is not affected. However, night-time steam is required for two primary
reasons: 1) Health & Safety: to prevent backflow of H2S. 2) Maintenance & Lifetime: limit thermal cycling of well casings.
Without the use of storage, the requirement of night-time steaming implies a limit to the total solar fraction, roughly 80% in
the Gulf region.
The decision-maker is faced with three different steam supply sources and has to select a combination of them to suit the
energy needs of the oilfield. We can create a hypothetical example based on the discussion above for an electricity-matched
Isolated Oilfield, where the marginal fuel cost is $6/MMBTU. The decision-maker will always select the most economic
source of steam to fill as much of their supply as possible. At $6/MMBTU, the SSG is the lowest cost at $17/ton; next is the
fully-burdened OT-HRSG at $20/ton; and, finally the OTSG is most expensive at $27/ton and will supply the remaining steam
demand. This is shown in Fig 9.
!30!!
OT-HRSG Isolated Oilfield 17% Limit

Steam Cost (LCOE $/ton)

!25!!
SSG 80% Limit
!20!!

OTSG

!15!!
OTHRSG

!10!!
SSG
!5!!

!"!!!!

0%

50%

80%

100%

Fig. 9: Steam Supply Curves for $6/MMBTU fuel price

4.1

Solar For EOR Vs. Solar For Power Generation

Several countries in the Gulf region have announced targets for solar power, for example Kuwait is aiming for at leat 15% of
its power needs from renewable sources by 203035. Similarly, Saudi Arabia is aiming to install 25GW of CSP by 203236.
CSP is more effective in producing steam than it is for power generation. The capital expenditure in solar EOR for each unit of
gas saved is significantly lower than solar for power generation. This analysis should be considered in further works.

SPE 172004

4.1.2

13

Solar For Electricity Production


400"
350"

Gas%

LNG%

Diesel%

LCOE%($/MWh)%

300"
250"
200"
150"
PV%

100"
50"
0"
0"

5"

10"
15"
Fuel%Price%($/MMBTU)%

20"

25"

37

Fig. 10: Economics of power generation in the oilfield

PV has benefits for power production in the oilfield. At current market prices for PV, its electricity generated is cost
competitive with fuel prices as low as $5/MMBTU.
5.0

Conclusions

Thermal EOR projects provide very good ultimate recovery and increase production. However the fuel gas consumption is a
problem. The thermal EOR steam generation projects in Gulf oilfields are on such a large scale that they affect an entire
countrys economic position. The field development may entail steam injection for many decades. Thus the power / gas
requirements have an important impact at a national level. Proper consideration of full economic cost, and the future impact on
gas consumption is essential.
Furthermore, the costs of the three methods of steam generation considered should be fully burdened to accurately account for
the true macro-economic implications. At a fuel price of $6/MMBTU, SSG is the cheapest method of steam generation at
$17/ton. Next is the fully burdened OT-HRSG at $20/ton. The most expensvie source is the fully burdened OTSG, which is
$27/ton.
Finally, the limitations of OT-HRSG steam as a result of the oilfields electric:thermal demand ratio will determine the ideal
steam supply curve based on the marginal fuel cost.

14

SPE 172004

References/Endnotes
1

Kovscek, A., Stanford Thermal Oil Recovery course, August 2013

Kokal, S. and Al-Kaabi, A., Enhanced oil recovery: challenges & opportunities, World Petroleum Council, 2010

Manaar Consulting, EOR and IOR in the Middle East,


http://www.manaarco.com/images/presentations/Fleming%20Gulf%20Manaar%20EOR%20Abu%20Dhabi%20March%202013.pdf
(accessed 30 October 2013)
4

A Simple Cycle power plant is ~30-35% efficient. When an OT-HRSG is added the system efficiency increases to ~75-80%.

Production from a thermal EOR reservoir doesnt stop when there is no more oil. Instead, production is shut-in when the oil is no longer
economic to produce. Since fuel for steam purchase is the largest component of operating costs in a heavy oil field, eliminating fuel costs
extends the economic life of the field. Simulations show that the ultimate recovery fraction can be increased by 12% of Original Oil in Place
(OOIP) if 20% of the steam for the field is produced from solar.
6

Dargin, J. 2013. Development and Industrialization in the Arabian Gulf Region. Harvard Journal of Middle East Politics and Policy

Dargin, J. and Vladimirov, M. 2012. Energy intensity: a time bomb for the Middle East? Energy in the Middle East.

According to the IEA, Kuwait imported as LNG 25% of its gas consumption in 2011.

9
The opportunity cost for countries such as Oman that are LNG exporters is the decrease exports that will result in a decrease in gas
availability in the country. The assumed LNG export price is the Asia spot market.
10

Used Asia spot price from BG Group http://www.bg-group.com/480/about-us/lng/global-lng-market-overview-2013-14/ (accessed August


20 2014).
11

The assumptions for the CW calculations were taken from Fichtner, MENA Regional Water Outlook, Part II Desalination Using
Renewable Energy, March 2011. Calculation Results: at $6/MMBTU fuel price, CWRO = $1.07/m3 and CWMED = $0.77/m3.
12

http://www.epa.gov/ttnchie1/ap42/

13

CDP North America, Use of internal carbon price by companies as incentive and strategic planning tool, December 2013.

14

http://www.steag-systemtechnologies.com/ebsilon_professional+M52087573ab0.html

15

http://www.vtu-energy.com/1_PDFs_2009/ENVTUEnergyGasTurbineLibrary.pdf

16

Annual Fuel Consumption

10,598,238

MMBtu/yr

Annual Steam Production

2,332,579

metric tons/yr

Annual Net Electricity Production

1,040,334

MWhe/yr

Net GT Average Annual Net LHV Efficiency

33.8

GT Average Net LHV Heat Rate


10,104
Btu/kW-hr
EOR OT-HRSG Heat Balance Model Results GT @ 100% Load
17

Feedwater for EOR OT-HRSG is always 55C. EOR OT-HRSG exit quality is always 80%. Water leaving the EOR OT-HRSGs
economizer section is recirculated to its inlet to maintain an economizer water inlet temperature of 135C in order to prevent sulfuric acid
condensation on the economizer tubes. No preheating of incoming natural gas. Fuel to the gas turbine is sour natural gas with 4 PPM H2S
and the following composition:
Constituent
Methane CH4
Ethane C2H6
Propane C3H8
n-Butane C4H10
n-Pentane C5H12
n-Hexane C6H14
Nitrogen N2
Carbon Dioxide CO2

Mol %
79.0
12.0
5.0
1.5
0.35
0.15
2.0
0.01

SPE 172004

15

18

http://site.ge-energy.com/prod_serv/products/tech_docs/en/downloads/ger3767c.pdf

19

http://site.ge-energy.com/prod_serv/products/tech_docs/en/downloads/ger3574g.pdf

text

NATURAL
GAS
C

D
FUEL PREHEATER

Stack

GT

HP FROM HRSG2
F
F
HOT REHEAT
FROM HRSG2

COND TO HRSG2

AMBIENT AIR

COLD REHEAT
TO HRSG2

LP FROM HRSG2

HPST

IPST

LPST
WATER
COOLED
CONDENSER

SEA WATER

20
21

Main steam conditions of 1815 psia / 1050F or 125 Bara / 565C. Hot Reheat steam conditions of 390 psia / 1050F or 27 bara / 565C.
Design point condenser pressure of 2 in. HgA or 68 mbar. Natural gas to gas turbines is preheated to 365F / 185C. Cooling water
temperature for the CCGT plant's condenser was assumed to be ambient temperature + 10C unless that would put it over 35C or under 20C
in which case it was pegged to either 20C or 35C. Design point cooling water temperature rise of 20F / 11C. Natural gas composition for the
CCGT model was the same as that for the EOR OT-HRSG model. the plant performance at ISO conditions (15C, 60% relative humidity and
1.013 bara) is as follows:
Plant Net Output
890 MWe
Plant Net Heat Rate (LHV)
5865 BTU/kW-hr
Plant Net Efficiency (LHV)
58.2 %
22

Palmer, D. and ODonnell, J. 2014. Construction, Operations and Performance of the First Enclosed Trough Solar Steam Generation Pilot
for EOR Applications. SPE 169745-MS.
23

http://www.eia.gov/forecasts/capitalcost/pdf/updated_capcost.pdf

24

http://www.eia.gov/forecasts/aeo/electricity_generation.cfm

25
From http://www.nrel.gov/analysis/tech_lcoe_documentation.html: Levelized Cost of Energy (LCOE, also called Levelized Energy Cost
or LEC) is a cost of generating energy (usually electricity) for a particular system. It is an economic assessment of the cost of the energygenerating system including all the costs over its lifetime: initial investment, operations and maintenance, cost of fuel, cost of capital. A net
present value calculation is performed and solved in such a way that for the value of the LCOE chosen, the project's net present value
becomes zero.
26

Diesel market price taken as $2.80/gallon based on NYMEX No. 2 Heating Oil as of September 9, 2014.

27

Welch, M. 2011. Greener EOR: Employing Cogeneration to Improve the Energy Efficiency of Thermal EOR projects. SPE 144224

16

SPE 172004

28

Assumption based on the Frame 9E/OT-HRSG modeled in this paper.

29

Sigworth, H.W., Horman, B.W., and Knowles, C.W. 1983. Cogeneration Experience in Steam EOR Applications. SPE 12196

30

Brandt, A. and Unnasch, S., Energy Intensity and Greenhouse Gas Emissions from Thermal Enhanced Oil Recovery, Energy Fuels, 2010

31

http://www.nem-group.com/EN/projects/hrsgs/2/mukhaizna_/9/

32

http://www.en-fabinc.com/en/project_oman1.shtml

33

Van Heel, A.P.G., van Wunnik, J.N.M., Bentouati, S., and Terres, R. 2010. The Impact Of Daily And Seasonal Cycles In Solar-Generated
Steam On Oil Recovery. SPE 129225-MS.
34

Sandler, J., Fowler, G., Cheng, K., and Kovscek, A. 2012. Solar-Generated Steam for Oil Recovery: Reservoir Simulation, Economic
Analysis, and Life Cycle Assessment. SPE 153806
35

http://www.oxfordbusinessgroup.com/economic_updates/kuwait-new-renewable-energy-project-works

36

KA CARE, Saudi Arabias Renewable Energy Strategy and Solar Energy Deployment Roadmap

37

Based on 2014 US PV projects including adjusted to Gulf conditions weather and cost.