Solco/Halliburton's Methanol Production Ship could provide a solution for gas production on Statoil's Norne Field.
A means of turning natural gas into methanol on the high seas is at hand, which could revolutionize field development economics. In April Statoil is due to indicate whether it intends to use Solco and Halliburton's Methanol Production Ship (MEPS) on the Norne Field. A similar decision is pending from the licensees of a West African field.
A shortlist has been drawn up of seven shipyards - six European and one Far Eastern - capable of building both the vessel and the process plant, and one of these yards has been selected to build both facilities if the decisions are positive. Per Sjursaether, Solco's general manager, does not at this stage wish to identify the yard.
While MEPS presents a latch-on solution for fields like Norne for which oil production plans are already in place, it is in fact a spin-off of Solco's concept for whole-field production: the Total Energy Preservation System (TEPS). TEPS, which makes it possible to produce both oil and gas without needing a gas export pipeline, is the brain-child of Solco's Arne Soland, the father of pioneering concepts in the fields of dynamic positioning, well stimulation vessels and drilling rig design. Development of the concept was supported by the NTNF research foundation, Amerada Hess, Simrad Norge, Ulstein International and Merpro Process Technologies. While oil production ships are already a reality, the breakthrough represented by TEPS resides in the ability to process the gas into an exportable revenue-earning product. In the absence of a gas export pipeline, current solutions for gas - either re-injecting it, as Norne initially will do, or flaring it - represent a cost.
If it proves successful, the new technology could dramatically improve the production prospects for both marginal and remote oil fields. Its benefits would be even greater in a country like Norway where carbon dioxide emissions are penalized. Solco's search for a solution to offshore gas started back in 1987, when it examined a number of possible products, including LNG, LPG and synthetic oil. The choice fell on methanol, not least because it does not need to be kept in pressurized tanks at low temperatures, like LNG and LPG, and is less than flammable than synthetic oil.
From a market point of view, methanol is also attractive. Its average price in the last 10 years has been $155 a tonne. This is well above the break-even price of $60 a tonne for a TEPS vessel, and $85 for a MEPS vessel, with 2,700 tonnes methanol capacity or more. And methanol demand is expected to strengthen in coming years as new markets emerge for methanol as feedstock for olefin production, and as the fuel in high-efficiency fuel cells. The addition of methanol as a revenue-earning product could transform a field's economics. According to Sjursaether, in some scenarios the income from the methanol would be sufficient to more than pay for the oil production costs. And while the leasing rate for an oil FPSO increases as its oil production capacity increases, Solco estimates that the leasing rate for a TEPS facility, assuming that the gas is supplied free and that methanol production is seen as a subsidy for oil production, would actually be smaller, the higher its oil production rate.
Having developed the basic TEPS concept, Solco entered a 50:50 partnership with Halliburton to market it. If a project opportunity arises, each partner has the right to a 50% participation. If one declines, the other is free to carry on. This structure was chosen to give both partners the maximum freedom to enter into projects, Sjursaether explains. The gas process technology used in TEPS and MEPS was developed by the Danish company Haldor Topsoe, which owns the patent for it. Solco and Halliburton have the exclusive right to use this technology offshore.
At the heart of the process is the Topsoe Convection Reformer (TCR). This uses maximum temperatures of 600-850C, well below that of alternative systems. The natural gas is mixed with steam, and then converted to syngas with the aid of a catalyst. The syngas is compressed, and then put through a reactor containing another catalyst to make raw methanol. The raw methanol is then passed through several stages of distillation to make methanol with 99% plus purity. The TCR system is a safe one for offshore application, unlike alternative processes which use much higher temperatures and large volumes of pure oxygen. It is also clean, in that the emissions to air are relatively small and contain no toxic gases.
Building the process plant is expensive, and this means that a minimum production rate of 600-1,000 tonnes/day is required to make it economic. The corresponding volume of gas required is 540,000-900,000 cum. The Norne MEPS, if it goes ahead, will have a methanol capacity of 2,700 tonnes/day, the same size as a world-scale land plant. The storage capacity will be close to 60,000 cum for methanol and water, which will allow for 18 days of full production.
The process plant can be placed on either a shipshape vessel or a barge, such as the Barbox design developed by Halliburton subsidiary Brown & Root. While North Sea conditions would necessitate the use of a ship, a barge, which would be cheaper to build, would be appropriate in calmer waters, such as the African application now being studied.
The distillation columns are 40 metres high, and the reformers, of which 10-12 are required, about 18 metres high. On a barge all the process equipment would be placed on the deck, but on a ship some of the taller equipment would be inside the hull, to provide better support, reduce its exposure to the wind, reduce the centre of gravity and generally improve the vessel movements.
Although the TEPS' oil process plant is compact - like that on the Crystal Sea test production vessel which was also conceived by Arne Soland - the main limiting factor for the shipshape facility is storage. According to Sjursaether, the maximum practical production capacity would be around 100,000 b/d of oil and 2,700 t/d of methanol. This level of production would require approximately 150,000 cum of storage, depending on the shuttle tankers' cycles.
The TEPS vessel would have similar proportions to a conventional oil FPSO. Typical dimensions would be 230 metres length, 40 metres width, 22 metres height of hull, and 12-14 metres draft. Sjursaether is confident that TEPS and MEPS will fly in 1996, and Solco and Halliburton are already looking at a potential of 8-10 applications in the North Sea and some 20 in Africa and the Far East.
This spring Solco plans to make a shares issue to raise fresh funds for the TEPS and MEPS projects. It also intends to broaden its in-house expertise by taking on board an experienced FPSO and rig operator as shareholder and board member.
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