Installing Vapor Recovery Units to Reduce Methane Losses

Installing Vapor Recovery Units to Installing Vapor Recovery Units to Reduce Methane LossesReduce Methane Losses

Lessons Learned Lessons Learned

from Natural Gas STARfrom Natural Gas STAR

Small and Medium Sized Producer Technology Transfer Small and Medium Sized Producer Technology Transfer WorkshopWorkshop

Bill Barrett Corporation, Evergreen Resources Inc,Bill Barrett Corporation, Evergreen Resources Inc,

Southern Gas Association and EPA’s Natural Gas STAR ProgramSouthern Gas Association and EPA’s Natural Gas STAR Program

June 29, 2004June 29, 2004

Page 2Reducing Emissions, Increasing Efficiency, Maximizing Profits

Vapor Recovery Units: AgendaVapor Recovery Units: Agenda

Methane LossesMethane Losses

Methane RecoveryMethane Recovery

Is Recovery Profitable?Is Recovery Profitable?

Industry ExperienceIndustry Experience

Discussion QuestionsDiscussion Questions


Sources of Methane LossesSources of Methane Losses

~ 5.56 Bcf methane lost from storage tanks ~ 5.56 Bcf methane lost from storage tanks each year from small and medium sized each year from small and medium sized producersproducers

Flash losses - occur when crude is transferred Flash losses - occur when crude is transferred from containment at higher pressure to from containment at higher pressure to containment at atmospheric pressurecontainment at atmospheric pressure

Working losses - occur when crude levels Working losses - occur when crude levels change and when crude in tank is agitatedchange and when crude in tank is agitated

Standing losses - occur with daily and seasonal Standing losses - occur with daily and seasonal temperature and pressure changestemperature and pressure changes

Source: EF from Inventory of U.S. Greenhouse Gas Source: EF from Inventory of U.S. Greenhouse Gas Emissions and Sinks, AF from EIA financial reporting Emissions and Sinks, AF from EIA financial reporting system (FRS)system (FRS)


Vapor Recovery UnitsVapor Recovery Units

Capture up to 95% of hydrocarbon vapors Capture up to 95% of hydrocarbon vapors vented from tanksvented from tanks

Recovered vapors have higher Btu content Recovered vapors have higher Btu content than pipeline quality natural gasthan pipeline quality natural gas

Recovered vapors are more valuable than Recovered vapors are more valuable than natural gas and have multiple uses natural gas and have multiple uses Re-injected into sales pipelineRe-injected into sales pipeline Used as on-site fuelUsed as on-site fuel Sent to processing plants for recovering NGLsSent to processing plants for recovering NGLs


Types of Vapor Recovery UnitsTypes of Vapor Recovery Units

Conventional vapor recovery units (VRUs)Conventional vapor recovery units (VRUs) Use rotary compressor to suck vapors out of Use rotary compressor to suck vapors out of

atmospheric pressure storage tanksatmospheric pressure storage tanks Require electrical power or engineRequire electrical power or engine

Venturi ejector vapor recovery units (EVRUsVenturi ejector vapor recovery units (EVRUsTMTM)) Use Venturi jet ejector in place of rotary Use Venturi jet ejector in place of rotary

compressorcompressor Do not contain any moving partsDo not contain any moving parts Require source of high pressure gas and Require source of high pressure gas and

intermediate pressure systemintermediate pressure system


Standard Vapor Recovery UnitStandard Vapor Recovery Unit

Crude Oil Stock

Tank(s)

ControlPilot

Vent LineBack Pressure

Valve

SuctionScrubber

SuctionLine

Condensate Return

BypassValve

ElectricControlPanel

Electric DrivenRotary Compressor

Gas SalesMeter Run

Gas

Liquid Transfer Pump

Check Valve

Source: Evans & Nelson (1968)Sales


Venturi Jet Ejector*Venturi Jet Ejector*

High-PressureMotive Gas(~850 psig)

Flow Safety Valve

Pressure Indicator Temp Indicator

PI TI

TI

PI

(-0.05 to 0 psig)

Low-Pressure Vent Gas from Tanks(0.10 to 0.30 psig)

PI TI

Discharge Gas

(~40 psia)

EVRUTM Suction Pressure

*Patented by COMM Engineering


Vapor Recovery with EjectorVapor Recovery with Ejector

Oil to Sales

Gas to Sales@ 1000 psig

LP Separator

Oil

Gas

Compressor

Ejector

Oil & Gas Well

5,000 Mcf/d Gas5,000 Bbl/d Oil

900 Mcf/d

Ratio Motive / Vent = 3 = 900/300

300 Mcf/d Gas

40 psig

6,200 Mcf/d

Crude Oil Stock Tank

(19 Mcf/d Incr.fuel)

281 Mcf/dNet Recovery


Example Facility for EVRUExample Facility for EVRUTMTM

Oil production:Oil production: 5,000 Bbl/d, 30 Deg API5,000 Bbl/d, 30 Deg API

Gas production:Gas production: 5,000 Mcf/d, 1060 Btu/cf5,000 Mcf/d, 1060 Btu/cf

Separator:Separator: 50 psig, 10050 psig, 100ooFF

Storage tanks: Storage tanks: 4 - 1500 Bbls @1.5oz 4 - 1500 Bbls @1.5oz reliefrelief

Gas compressor:Gas compressor: Wauk7042GSI/3stgArielWauk7042GSI/3stgAriel

Suction pressure:Suction pressure: 40 psig40 psig

Discharge pressure:Discharge pressure:1000 psig1000 psig

Measured tank vent:Measured tank vent: 300 Mcf/d @ 1,850 Btu/cf300 Mcf/d @ 1,850 Btu/cf


Emissions Before EVRUEmissions Before EVRUTMTM

CO2 EquivalentsCO2 Equivalents

Engine exhaust: Engine exhaust: 3,950 Tons/yr @ 790 Hp load3,950 Tons/yr @ 790 Hp load

Tank vents: Tank vents: 14,543 Tons/yr14,543 Tons/yr

Total CO2 equivalents:Total CO2 equivalents: 18,493 Tons/yr18,493 Tons/yr

Fuel consumption @ 9000 Btu/Hp-hr = 171 MMBtu/dFuel consumption @ 9000 Btu/Hp-hr = 171 MMBtu/d

Gas sales:Gas sales: 5,129MMBtu/d5,129MMBtu/d

Gas value:Gas value: $25,645/d @ $5/MMBtu$25,645/d @ $5/MMBtu


Emissions After EVRUEmissions After EVRUTMTM

CO2 EquivalentsCO2 Equivalents Motive gas required:Motive gas required: 900 Mcf/d900 Mcf/d Engine exhaust:Engine exhaust: 4,897 Tons/yr @ 980 Hp load4,897 Tons/yr @ 980 Hp load Tank vents:Tank vents: 0 Tons/yr0 Tons/yr Fuel consumption @ 9000Btu/Hp-hr:Fuel consumption @ 9000Btu/Hp-hr: 190 MMBtu/d190 MMBtu/d Total COTotal CO22 equivalents: equivalents: 4,897 Tons/yr4,897 Tons/yr Reduction:Reduction: 13,596 Tons/yr (73.5%)13,596 Tons/yr (73.5%) Total COTotal CO22 equivalents: equivalents: 4,897 Tons/yr4,897 Tons/yr Reduction:Reduction: 13,596 Tons/yr (73.5%)13,596 Tons/yr (73.5%) Gas sales:Gas sales: 5,643 MMBtu/d5,643 MMBtu/d Gas value:Gas value: $28,215/d @ $5/MMBtu$28,215/d @ $5/MMBtu Income increase:Income increase: $2,570/d = $77,100/mo$2,570/d = $77,100/mo EVRU cost installed:EVRU cost installed: $75,000$75,000 Installed cost per recovered unit of gas: Installed cost per recovered unit of gas: $0.68/Mcf/yr$0.68/Mcf/yr Payout:Payout: <1 month<1 month


Vapor Recovery Unit Decision ProcessVapor Recovery Unit Decision Process

IDENTIFY possible locations for VRUsIDENTIFY possible locations for VRUs

QUANTIFY the volume of lossesQUANTIFY the volume of losses

DETERMINE the value of recoverable lossesDETERMINE the value of recoverable losses

DETERMINE the cost of a VRU projectDETERMINE the cost of a VRU project

EVALUATE VRU project economicsEVALUATE VRU project economics


Criteria for Vapor Recovery Unit Criteria for Vapor Recovery Unit LocationsLocations

Steady source and sufficient quantity of lossesSteady source and sufficient quantity of losses Crude oil stock tankCrude oil stock tank Flash tank, heater/treater, water skimmer ventsFlash tank, heater/treater, water skimmer vents Leaking valve in blanket gas systemLeaking valve in blanket gas system

Outlet for recovered gasOutlet for recovered gas Access to pipeline or on-site utilitiesAccess to pipeline or on-site utilities

Tank batteries not subject to air regulationsTank batteries not subject to air regulations


Quantify Volume of LossesQuantify Volume of Losses

Estimate losses from chart based on oil Estimate losses from chart based on oil characteristics, pressure and temperature at characteristics, pressure and temperature at each location (each location (±± 50%) 50%)

Estimate emissions using the E&P Tank Model Estimate emissions using the E&P Tank Model ((±± 20%) 20%)

Measure losses using ultrasonic meter (Measure losses using ultrasonic meter (±± 5%) 5%)

Measure losses using recording manometer Measure losses using recording manometer and orifice well tester (and orifice well tester (±± 100%) 100%)


Estimated Volume of Tank VaporsEstimated Volume of Tank Vapors

Pressure of Vessel Dumping to Tank (Psig)Pressure of Vessel Dumping to Tank (Psig)

Vap

or V

ente

d fr

om T

anks

- cf

/Bbl

- G

OR

Vap

or V

ente

d fr

om T

anks

- cf

/Bbl

- G

OR

110110

100100

9090

8080

7070

6060

5050

4040

3030

1010

2020

1010 2020 3030 4040 5050 6060 7070 8080

Under 30° APIUnder 30° API

30° API to 39° API

30° API to 39° API40° API and Over

40° API and Over


Quantify Volume of LossesQuantify Volume of Losses

E&P Tank ModelE&P Tank Model Computer software developed by API and GRIComputer software developed by API and GRI Estimates flash, working and standing lossesEstimates flash, working and standing losses Calculates losses using specific operating Calculates losses using specific operating

conditions for each tankconditions for each tank Provides composition of hydrocarbon lossesProvides composition of hydrocarbon losses


What is the Recovered Gas Worth?What is the Recovered Gas Worth?

Value depends on Btu content of gasValue depends on Btu content of gas

Value depends on how gas is usedValue depends on how gas is used On-site fuel - valued in terms of fuel that is On-site fuel - valued in terms of fuel that is

replacedreplaced Natural gas pipeline - measured by the higher Natural gas pipeline - measured by the higher

price for rich (higher Btu) gasprice for rich (higher Btu) gas Gas processing plant - measured by value of Gas processing plant - measured by value of

NGLs and methane, which can be separatedNGLs and methane, which can be separated


Value of Recovered GasValue of Recovered Gas

Gross revenue per year = (Q x P x 365) + NGLGross revenue per year = (Q x P x 365) + NGL

Q = Rate of vapor recovery (Mcfd)Q = Rate of vapor recovery (Mcfd)

P = Price of natural gasP = Price of natural gas

NGL = Value of natural gas liquidsNGL = Value of natural gas liquids


Cost of a VRUCost of a VRU

Major cost items:Major cost items: Capital equipment costsCapital equipment costs Installation costsInstallation costs Operating costsOperating costs


Cost of a VRU (cont’d)Cost of a VRU (cont’d)

Capacity CompressorCaptial Costs Installation Costs O&M Costs

(Mcfd) Horsepower ($) ($) ($/year) 25 5-10 15,125 7,560 - 15,125 5,25050 10-15 19,500 9,750 - 19,500 6,000100 15 - 25 23,500 11,750 - 23,500 7,200200 30 - 50 31,500 15,750 - 31,500 8,400500 60 - 80 44,000 22,000 - 44,000 12,000

Vapor Recovery Unit Sizes and Costs

Note: Cost information provided by Partners and VRU manufacturers.


Value of NGLsValue of NGLs1 2 3 4

Btu/gal MMBtu/gal $/gal

$/MMBtu1,

2

(=3/2)Methane 59,755 0.06 0.32 5.32 Ethane 74,010 0.07 0.42 5.64 Propane 91,740 0.09 0.59 6.43 n Butane 103,787 0.10 0.73 7.06 iso Butane 100,176 0.10 0.78 7.81 Pentanes+ 105,000 0.11 0.85 8.05 Total

5 6 7 8 9 10 11

Btu/cf MMBtu/Mcf $/Mcf $/MMBtuVapor

Compostion

Mixture (MMbtu/Mcf

)Value

($/Mcf)

(=4*6)(=(8*10)/1

000)

Methane 1,012 1.01 5.37$ 5.32 82% 0.83 4.41$ Ethane 1,773 1.77 9.98$ 5.64 8% 0.14 0.80$ Propane 2,524 2.52 16.21$ 6.43 4% 0.10 0.65$ n Butane 3,271 3.27 23.08$ 7.06 3% 0.10 0.69$ iso Butane 3,261 3.26 25.46$ 7.81 1% 0.03 0.25$ Pentanes+ 4,380 4.38 35.25$ 8.05 2% 0.09 0.70$ Total 1.289 7.51$

1 Nautral Gas Price assumed at $5.32/MMBtu as on mar 5 at Henry Hub

2 Prices of Indvidual NGL components are from Platts Oilgram for Mont Belvieu, TX, March 05,2004

3 Other NGl information obtained from Oil and Gas Journal, refining Report, March 19, 2001, p-83


What Is the Payback?What Is the Payback?

Peak Capacity (Mcfd)

Installation &

Capital Costs1

O & M Costs

($/year)Value of Gas2

($/year)Annual Savings

Payback

period3

(months)

Return on

Investment4

25 26,470 5,250 34,242$ 28,992$ 11 107%50 34,125 6,000 68,484$ 62,484$ 7 182%100 41,125 7,200 136,967$ 129,767$ 4 315%200 55,125 8,400 273,935$ 265,535$ 2 482%500 77,000 12,000 684,836$ 672,836$ 1 874%

1 Unit Cost plus esimated installation at 75% of unit cost2 $7.51 x 1/2 capacity x 365, Assumed price includes Btu enriched gas (1.289 MMBtu/Mcf)3 Based on 10% Discount rate for future savings. Excludes value of recovered NGLs4 Calculated for 5 years

Financial Analysis for a conventional VRU Project


Trade OffsTrade OffsConventional Conventional

VRUVRUEjectorEjector

Fuel for electricity (Mcf/yr)Fuel for electricity (Mcf/yr) 2,2812,281 __

Fuel (Mcf/yr)Fuel (Mcf/yr) __ 6,9356,935

Operating factorOperating factor 70%70% 100%100%

MaintenanceMaintenance HighHigh LowLow

Installed cost per recovered Installed cost per recovered unit of gas ($/Mcf/yr)unit of gas ($/Mcf/yr)

$1.00$1.00 $0.68$0.68

Payback (excl. maintenance)Payback (excl. maintenance) 3 to 27 months3 to 27 months <1 month<1 month


Technology ComparisonTechnology Comparison

Mechanical VRU advantagesMechanical VRU advantages Gas recoveryGas recovery Readily availableReadily available

Mechanical VRU disadvantagesMechanical VRU disadvantages Maintenance costsMaintenance costs Operation costsOperation costs Lube oil contaminationLube oil contamination ~ 70% runtime~ 70% runtime Sizing/turndownSizing/turndown

EVRU advantagesEVRU advantages Gas recoveryGas recovery Readily availableReadily available Simple technologySimple technology 100% runtime100% runtime Low maintenance/ Low maintenance/

operation /install costsoperation /install costs Sizing/turndown (100%)Sizing/turndown (100%) Minimal space required Minimal space required

(mount in pipe rack)(mount in pipe rack) EVRU disadvantagesEVRU disadvantages

Need HP Motive GasNeed HP Motive Gas Recompression of motive Recompression of motive

gasgas


Lessons LearnedLessons Learned

Vapor recovery can yield generous returns when Vapor recovery can yield generous returns when there are market outlets for recovered gasthere are market outlets for recovered gas Recovered high Btu gas or liquids have extra Recovered high Btu gas or liquids have extra

valuevalue

VRU technology can be highly cost-effectiveVRU technology can be highly cost-effective

EVRUEVRUTMTM technology has extra O&M savings, technology has extra O&M savings, higher operating factorhigher operating factor

Potential for reduced compliance costs can be Potential for reduced compliance costs can be considered when evaluating economics of considered when evaluating economics of VRU/EVRUVRU/EVRUTMTM


Lessons Learned (cont’d)Lessons Learned (cont’d)

VRU should be sized for maximum volume VRU should be sized for maximum volume expected from storage tanks (rule-of-thumb expected from storage tanks (rule-of-thumb is to double daily average volume)is to double daily average volume)

Rotary vane or screw type compressors Rotary vane or screw type compressors recommended for VRUs where there is no recommended for VRUs where there is no source of high-pressure gas and/or no source of high-pressure gas and/or no intermediate pressure systemintermediate pressure system

EVRUsEVRUsTMTM recommended where there is gas recommended where there is gas compressor with excess capacitycompressor with excess capacity


Top Gas STAR Partners for VRUsTop Gas STAR Partners for VRUs

Top five companies for emissions reductions using VRUs in 2003Top five companies for emissions reductions using VRUs in 2003

CompanyReduction

(Mcf)Marathon Oil Company 1,333,484Kerr-McGee Corporation 633,919Chevron 532,134Union Pacific Resources Group, Inc. 403,454Burlington Resources, Inc. 299,609Source: Natural GasSTAR Program


Case Study – ChevronCase Study – Chevron

Chevron installed eight VRUs at crude oil Chevron installed eight VRUs at crude oil stock tanks in 1996stock tanks in 1996

Project Economics – Chevron

Methane Loss

Reduction (Mcf/unit/yr)

Approximate Savings per

Unit1

Total Savings

Total Capital and Installation

Costs

Payback

21,900 $43,800 $525,600 $240,000 <1 yr 1 Assumes a $3 per Mcf gas price; excludes value of recovered NGLs. Refer to the Lessons Learned for more information.


Vapor Recovery UnitsVapor Recovery Units

Profitable technology to reduce gas lossesProfitable technology to reduce gas losses Can help reduce regulatory requirements Can help reduce regulatory requirements

and costsand costs Additional value of NGLs further improves Additional value of NGLs further improves

cost-effectivenesscost-effectiveness Exemplifies profitable conservationExemplifies profitable conservation


Discussion QuestionsDiscussion Questions

To what extent are you implementing this To what extent are you implementing this BMP?BMP?

How can this BMP be improved upon or How can this BMP be improved upon or altered for use in your operation(s)?altered for use in your operation(s)?

What is stopping you from implementing this What is stopping you from implementing this technology (technological, economic, lack of technology (technological, economic, lack of information, focus, manpower, etc.)?information, focus, manpower, etc.)?

Documents

Installing Vapor Recovery Units to Reduce Methane Losses