Overview of the gas and oil industry

Professor Antal Tungler

2004

Topics of the module

1. Exploration of gas and oil1. Origin, Exploration, Reservoir Engineering, Forecasts, Deep Drilling

and Production Engineering2. Composition and Classification of Crude Oil and Natural Gas3. Transportation and Storage of Crude Oil and Natural Gas

2. Oil refining 1. Crude oil distillation2. Chemical conversion processes in refineries3. Integrated refinery structures4. Environmental protection in refineries

3. Modern fuels, high-tech lubricants, utilisation of refinery products, alternative fuels

4. Automotive exhaust gas purification catalysts, hybrid drive, fuel cells

1. Exploration of gas and oil

Occurence, composition, origin, reserves, exploration, recovery,

production engineering of oil and gas, natural gas purification, LPG

Definition

• Crude oil is the name given to all organic compounds which are liquid under reservoir conditions.

• Petroleum composition:- hydrocarbons

-S, O, N, P compounds

-metal compounds (V, Ni, Cu, Co, Mo, Pb, Cr, As)

H2S and water

Elementary composition: C 79,5-88,5%, H 10-15,5%

Constituents of petroleum

• Alkanes

• Naphtenes

• Aromatics

Classification of crude oils

• Paraffin based -found in deeper zones

• Naphtene or asphalt based –found in upper level

• Mixed-based –found in middle zones

• Composition on worldwide basis:

• ~30% paraffins, 40% naphtenes, 25% aromatics

Natural Gas

• Dry and wet natural gases

• Components: methane, higher hydrocarbons, nitrogen, carbondioxid, hydrogen sulfide, helium

• Associated gas, closely connected to crude oil

• Natural gas---non-associated

Formation of crude oilpredominantly of organic origin

• Petroleum source rock-deposits in sedimentary basin contain organic residues of terrestrial, limnic, fluvial and marine origin-conversion under anaerobic conditions-resulting in bitumen or kerogen

• Source rock should contain 0,5% TOC– Anoxic zones: nonmarine lakess (lake Tanganyika), closed inland seas

with positive water balance (Black Sea deep zones), ascent of marine current from greater depths (Benguela current Africa, Humboldt current, Peru), open ocean (global climatic warming with large transgressions in Jurassic and middle Cretaceous period)

• Crude oil formation from phytoplankton, bacteria-in the Silurian—Devonian period

• Formation: organic material in sapropels is decomposed, decayed by anaerobic bacteria, organic material adsorbed onto fine clay particles, which sink to the sea floor. Sedimentation condition in Pliocene were similar to that of novadays in the offshore regions of the sea.

Hydrocarbon formationDiagenesis, Catagenesis,

(at depths of 1000-5000 m and 175 oC) Metagenesis

Migration of oil dropletsfrom argillaceous source rocks into porous reservoir rocks

• Lateral migration through capillary paths• Vertical migration- fine fissures• During migration occurs separation from water,

gravitational separation: gas-oil-water

• Chemical degradation leads to smaller and more stable compounds

• Maturation process concludes with the conversion to methane

Reservoir rocks and trap structuresFluvial sand, Beach and barrier sand, Wind-blown sand, Marine platform sand

Deep water sand, Reefs, Reef limestone debris, Chalk

Occurences

Production and reserves

Production and reserves

Oil explorationpreliminary exploration, exploratory wells

• Geological exploration• Satellite images

• Examination of rock samples• Stratigraphic investigations

• Geophysical investigation• Magnetic measurements

• Gravimetric measurements• Geoelectric measurements

• Seismic methods– Refraction Reflection methods 3D method

• Geochemical investigation• Exploratory drilling

The entire exploration-to-production chain was reviewed and adapted to

greater water depths:

1. The development and use of (3D) seismic was intensified.

2. Innovative drilling and production structures were designed. Because these structures could not be installed on the seabed at such great depths, FPSO (Floating Production Storage and Offloading) and TLP (Tension Leg Platform) systems were developed.

3. Efforts were made to come up with new materials for the flexibles (able to withstand high pressures at great water depths, etc.).

4. Horizontal and multibranch wells came into general use, reducing the number of wells.

Estimated proved crude oil reserves in the world (A)

Liquid petroleum consumed in the United States during the

past 50 years came from three sources

Measurement Measure

Produced-to-date 873 Gb

Reserves 928

Discovered-to-date 1801

Yet-to-Find 149

Yet-to-Produce 1077

Ultimate recovery 1950

Current consumption (2001) 22 Gb/y

Current discovery rate 6 Gb/y

Current depletion rate (ann. prod. as % of Yet-to-Produce)

2%

Main parameters for Conventional oil

Peak Oil. It truly is a turning point for mankind

• Conventional oil - and that will be defined - provides most of the oil produced today, and is responsible for about 95% all oil that has been produced so far.

• It will continue to dominate supply for a long time to come. It is what matters most. • Its discovery peaked in the 1960s. We now find one barrel for every four we

consume. • Middle East share of production is set to rise. The rest of the world peaked in 1997,

and is therefore in terminal decline. • Non-conventional oil delays peak only a few years, but will ameliorate the

subsequent decline. • Gas, which is less depleted than oil, will likely peak around 2020. • Capacity limits were breached late in 2000, causing prices to soar leading to world

recession. • The recession may be permanent because any recovery would lead to new oil

demand until the limits were again breached which would lead to new price shocks re-imposing recession in a vicious circle.

• World peak may prove to have been passed in 2000, if demand is curtailed by recession.

• Prices may remain weak in such circumstances but since demand is not infinitely elastic they must again rise from supply constraints when essential needs are affected

Oil price of today:

Crude Oil, Gasoline and Natural Gas Futures

Prices for August 23, 2004

NYMEX Light Sweet Crude -0.67 $47.46.05

IPE Brent -0.51 $43.03

Gasoline NY Harbor -0.0098 $1.2575

Heating Oil NY Harbor -0.0149 $1.2147

NYMEX Natural Gas -0.242 $5.310

Conclusion about reserves

• Peak oil is a turning point for Mankind, when a hundred years of easy growth ends. The population may be about to peak too for not unrelated reasons. The transition to decline is a period of great tension when priorities shift to self-sufficiency and sustainability. It may end up a better world, freed from the widespread gross excesses of to-day.

Reservoir engineering

• Porosity

• Physical properties of the pore saturating fluids: density, compressibility, viscosity

• Reserves = Resources x Recovery factor

• Multiphase flow

• Recovery factors: microscopic, areal, vertical

The oil, gas and water distribution in a pore

Oil recovery efficiency

Modeling of reservoir and production performance

• Material balances method

• Reservoir simulation– Steady-state flow– Unsteady-state flow– Decline curve methods: exponential,

harmonic, hyperbolic

History of drilling

Deep drilling engineering

Rotary drilling

Drilling tools: roller bit

Drilling mud: thixotropic liquid, contains additives, like bentonite, cellulose, emulsifiers, inhibitors, density is between 1.1 and 1.4 g/cm3

Horizontal drilling with active steering

Mining drilling method

Externally and internally smooth drill pipe

Greater drilling progress

Geophysical borehole measurements: electrical methods, sonic measurements, radioactivity measurements, determination of geophysical fields

Productivity tests before casing, short in duration because unstable borehole

Samples from the reservoir content, chemical and physical studies

Key deep offshore technologies

Deep Offshore Production Records

Casing and cementation• Several concentric strings of

casing pipes installed according to geological and engineering requirements partly during drilling.

• Casing is cemented• Loads on casing:

– Differential pressure– Radial component of the

formation stress– Tensile strength from own

weight– Bending stress, especially in

horizontal holes– Thermal stresses

• Tubing string with packers transports the fluid produced to the surface

Cementing1. Massive bond of casing and

formation2. Isolation of permeable

formation3. Corrosion protectionCement + water + additives =

slurry pumped through the borehole into

the annulus between casing and formation, at elevated temperatures retarders and antifriction agents must be added.

Production engineering

• The purpose of the exploitation and production planning of hydrocarbon reservoir is to produce optimum amount of sealable products at minimum cost and with close attention to all aspects of safety and ecology

• Problems in oil production:– Time of water injection, adjust the pressure– Dependence of the productivity index on viscosity of the oil and

water cut– Gas production and availability in the gas lift method– Advantages and disadvantages of the artificial lift methods

• In gas production:– Occurence of toxic and problematic substances– Heterogeneous multilayer and selective water incursion

• Avoiding blowouts

General production engineering

• Completion, Setting up production– Wellhead, casing, cementing, tubing strings,bottom hole completion: „wireline

equipment”. Two types: open-hole completion, casing on top of producing formation

• Perforation – tubing-coupled perforating, it is a controlled explosion

• Well and reservoir treatment– Well treatment– Obstruction can be caused: solids from the mud, water block, swelling of the

clay, chemical precipitation, emulsification.– Obstructions can be removed by acid treatment (HCl or HF, surfactant)– Reservoir bed treatment: pressure acidizing, hydraulic fracturing, injection of oil,

water or acid together with viscosity enhancing agent, proppant (fluvial sand)• Workover

– Workover hoist, wireline technique, coiled tubing, diameter 2,54-5,08cm, used at a depth of up to 5500m

– Horizontal wells: open hole, open hole with slotted or prepacked liner, slotted liner with external casing packers in the open hole, cemented and perforated liner.

Oil production engineering

1. Flowing production

2. Gas lift3. Centrifugal

pumps4. Piston pumps,

sucker rod or hydraulic

Oil production engineering

Collection and treatment of crude oil

• Gas separation• Dewatering and desalting

– Emulsion breaking: early feeding of demulsifier, moderate heating, separation in a tank

• Special problems in crude oil production– Paraffin precipitation– Chemical precipitates– Sand: safe production rate, filters, consolidation by

resins– Corrosion

Natural gas production engineering

Special requirements in natural gas production

• High pressures and pressure differences• Extreme temperature differences• Aggressive gas constituents• Gastight tubing, special sealing materials• Controlled and monitored production• Safety at the surface, underground safety

valves• Deep storage reservoirs

Sour gas well

Treatment of natural

gas

Sulfur removal

Removal of mercury

Dehydration

Removal of hydrocarbons

Removal of carbondioxid and sulfur components

Dehydration and cooling of natural gas

Hydrocarbon removal from natural gas

Physical-chemical scrubbing of natural gas

Liqiud oxidation process

Absorption of hydrogensufide

Oxidation to sulfur

Reoxidation of active component with air

Separation of elementary sulfur

Membrane separation of impurities

Adsorption processes

Activated charcoal, zeolites

Complete natural gas

treating plant

Liqiud Natural Gas

• Liquefied natural gas on low temperature: -160oC

• Pretreat the gas

• Refrigeration

• Storage

• Transportation: tankers

Underground storage facility for natural gas

European natural gas pipelines

Trans-Alaska pipeline south of Delta Junction. The pipeline extends 800 miles from Prudhoe Bay to Valdez.

Alaska Range is in the background.

2. Oil refining

Purposes, history, crude oils and products, refining processes, integrated refinery structures,

environmental protection,

Oil refining: Purposes

• Fuels for cars, trucks, aeroplanes, ships and other forms of transport

• Combustion fuels for the energy industry and for households

• Raw materials for the petrochemical and chemical industry

• Speciality products, lubricating oils, waxes, bitumen

• Energy as by-product, heat, electricity

Oil refining History

• First purpose-drilled oil well 1859 Pennsylvania• Continuous distillation 1875 Baku• 20th century--- increased demand on gasoline• 1920s Thermal cracking• 1930s Houdry catalytic cracking• 1940s Pt catalysed reforming• Desulfurisation• 1960s FCC with zeolites• Residue conversion technologies

Process units in integrated refineries

Crude oils and products

Sulfur content of crude oils

Refining processes: distillation

Task: separation

Catalytic crackingTask: lowering molecular weight

and boiling point

Viscosity breaking

Gasoline hydrotreaterCatalyst composition:

Co Mo Ni W

Active form: sulfided

Task: eliminating sufur content

Hydrodesulfurisation of gas oil

Task: decreasing sulfur content

Hydrotreating of pyrolysis gasoline

Task: stabilising the product, desulfurisation

Catalytic reformingTasks: increase octane number, production of aromatics

Catalyst: Pt on alumina (alloyed with Sn)

Catalytic reformingReactions during catalytic reforming:

CH3 CH3

+ 3 H2

CH3

+ 3 H2

CH3

CH3

+ 4 H2

+ H2 +

Dehydrogenation

Dehydrocyclisation

Hydrocracking

Dehydroisomerisation

Isomerisation

Hydrocracking

Task: produce better quality distillates Catalysts: Co-Mo, Ni-W, sulfided

Residue conversion processesTask: increase the yield of high value products

„H-in” and „C-out” processes

Delayed coking (Dunai Finomító)

In most advanced refinery structures:

hydroprocessing + [ coking, deasphalting, hydrocracking ] + partial oxidation

Gasoline upgrading processesTask: producing better fuel, high octane number, no health risk,

environmentally more friendly

Processes: alkylation, polymerisation, isomerisation

Integrated refinery structures

Hydroskimming

Integrated refinery structures

Catalytic cracking--visbreaking

Integrated refinery structures

Hydrocracking—catalytic cracking

Integrated refinery structuresHydrocracking--coking

Yield structures of refinery conversion schemes for Arabian light crude processing

Environmental protection in the oil and gas industry

• Emissions to the atmosphere, to groundwater, to soil, to the sea

• Emission during exploration, production, manufacturing, storage and transportation (enormous trasportation distances and quantities !!!)

Main air pollutants emitted by a refinery

Pollutant Sources

CO2 Process furnaces, boilers, gas turbines, FCC regenerators, CO boilers, flare systems, incinerators

CO Process furnaces, boilers, FCC regenerators, CO boilers, flare systems, incinerators, sulfur recovery units

NOx Process furnaces, boilers, gas turbines, FCC regenerators, CO boilers, flare systems, incinerators, coke calciners

Particulates includig metals

Process furnaces, boilers, gas turbines, FCC regenerators, CO boilers, cke plants, incinerators

Sulfur oxides Process furnaces, boilers, gas turbines, FCC regenerators, CO boilers, flare systems, incinerators, sulfur recovery units

VOCs Storage and handling facilities, flare systems, gas separation units, oil/water separation units, fugitive emissions (valves, flanges)

Energy consumption in refineries

The term ‘best available techniques’ BAT is defined in Article 2(11) of the Directive as “the most effective and advanced stage in the development of activities

and their methods of operation which indicate the practical suitability of particular techniques for providing in principle the basis for emission limit values designed to prevent and, where that is not practicable, generally to reduce emissions and the

impact on the environment as a whole.”

Article 2(11) goes on to clarify further this definition as follows:· “techniques” includes both the technology used and the way in which the installation

is designed, built, maintained, operated and decommissioned;·

“available” techniques are those developed on a scale which allows implementation in the relevant industrial sector, under economically and technically viable conditions,

taking into consideration the costs and advantages, whether or not the techniques are used or produced inside the Member State in question, as long as they are

reasonably accessible to the operator;

· “best” means most effective in achieving a high general level of protection of theenvironment as a whole.

Techniques to consider in the determination of BAT

Close to 600 techniques have been considered in the determination of BAT. Those techniques have been analysed following a consistent scheme. That

analysis is reported for each technique with a brief description, the environmental benefits, the cross-media effects, the operational data, the

applicability and economics.

BREF document for each industrial sector.

Amongst the many environmental issues addressed in the BREF, the five that are dealt with below are probably the most important:

· increase the energy efficiency· reduce the nitrogen oxide emissions· reduce the sulphur oxide emissions

· reduce the volatile organic compounds emissions· reduce the contamination of water

The bubble concept usually refers to air emissions of SO2, but can also be applied to NOx, dust,CO and metals (Ni, V). The bubble concept is a regulatory tool applied in several EU countries.As represented in the picture, the bubble approach for emissions to air reflects a “virtualsingle stack” for the whole refinery.

Establishing associated emission values in the bubble concept

If the bubble concept is to be used as an instrument to enforce the application of BAT in the refinery, then the emission values defined in the refinery bubble should be

such that they indeed reflect BAT performance for the refinery as a whole. The most important notion is then to:

identify the total fuel use of the refinery; assess the contribution of each of the fuels to the total fuel consumption of the

refinery; quantify the emissions from process units implicated in such emissions (e.g. FCC,

SRU); review the applicability of BAT to each of these fuels and/or the process units

combine this information with the technical and economical constraints in using these techniques.

Good housekeeping/management techniques/tools. BAT is to: implement and adhere to an Environmental Management System (EMS). A good EMS could include:The preparation and publication of an annual environmental performance report. A report will also enable the dissemination of performance improvements to others,and will be a vehicle for information exchange. External verifications may enhance the credibility of the report.The delivery to stakeholders on an annual basis of an environmental performanceimprovement plan. Continuous improvement is assured by such a plan.The practice of benchmarking on a continuous basis, including energy efficiency andenergy conservation activities, emissions to air (SO2, NOx, VOC, and particulates),discharges to water and generation of waste. Benchmarking for energy efficiencyshould involve an internal system of energy efficiency improvements, or intra- andinter-company energy efficiency benchmarking exercises, aiming for continuousimprovements and learning lessons.An annual report of the mass balance data on sulphur input and output via emissionsand products (including low-grade and off-spec products and further use and fate).Improve stability of unit operation by applying advanced process control and limitingplant upsets, thereby minimising times with elevated emissions (e.g. shutdowns and startups)Apply good practices for maintenance and cleaning.Implement environmental awareness and include it in training programmes. Implement a monitoring system that allows adequate processing and emission control.

Emission free loading of gasoline

Reduction of hydrocarbon

emission

Water pollution

• During exploration and production under sea level

• Transportation on waterways• Refineries: process water, steam, wash water,

cooling water, rain water from production areas, from non-process areas

• Water pollutants: oil, H2S, NH3, organic chemicals, phenols, CN-, suspended solids

Waste generation

• Oily sludges and materials

• Spent catalysts, other materials

• Drums and containers

• Spent chemicals

• Mixed wastes

Example of specific emissions and consumptions found in European refineries

3. Modern fuels

Gasoline, diesel oil, kerosene, alternative fuels, storage and

transportation

Modern fuels: gasoline

• Otto engines• Four-stroke:• Intake of fuel-air mixture• Compression of the

mixture and timed ignition• Combustion and

expansion (working stroke)

• Exhaust of combustion gases

Modern fuels: gas oil

• Diesel engine• The fuel-air mixture is

heterogeneous, the ignition is thermal

• Fuel is injected into the heated air shortly before the end of the compression stroke, where it self-ignites.

Quality of gasolineOctane number

Determination in comparative measurement, n-heptane has 0 octane number, 2,2,4-trimethyl pentane(iso-octane) has 100 octane number.

Measurement in a one-cylinder, four-stroke test engine, it has a mechanically adjustable compression ratio. The compression ratio is increased until „knocking” occurs. The fuel’s octane number is coming from the composition of the n-heptane-iso-octane mixture, which gives the same knock level.

Quality of gasoline

Volatility: balanced distillation performance

Benzene content

Aromatic content

Sulfur content

Gasoline components

• Straight-run gasoline• Thermally cracked gasoline• Catalytically cracked gasoline• Catalytic reformate• Isomerizate• Alkylate• Polymer gasoline• Oxygenates (MTBE, ETBE)

Quality of Diesel fuels (gas oil)

Ignition qualityCetane numberDetermination in comparative measurement, methyl-naphtalene has 0 cetane number, cetane(n-hexadecane) has 100 cetane number.Measurement in a one-cylinder, four-stroke test engine, ignition delay can be altered, varying the compression ratio or throttling the qantity of intake air.

Quality of Diesel fuels (gas oil)

• Density

• Sulfur content

• Viscosity

• Deposit formation

• Cold flow properties (summer and winter gas oils)

Diesel fuel components

Straight-run middle distillate

Thermally cracked gas oil

Catalytically cracked gas oil

Hydrocracked gas oil

Synthetic diesel fuel: SMDS (Shell Middle Distillate Synthesis) from natural gas through steam reforming, Fischer-Tropsch synthesis, isomerization, distillation

Fuel additives

• Gasoline additives• Antiknock agents: lead compounds• Antioxidants: amines and phenols• Metal deactivators• Corrosion inhibitors• Anti-icing agents• Detergents: avoiding deposits on

injectors, ensure intake valve cleanliness

• Additives for combatting combustion chamber deposits

• Spark aider additives

• Additives for diesel fuel• Ignition improvers (formation of free

radicals upon decomposition)• Detergent additives• Soot suppressors-combustion

enhancers• Cold-flow additives (avoid wax

crystallization)• Flow improvers (EVA copolymers)• Cloud point depressants• Wax antisettling additives• Additives for improving lubricity• Additives for increasing storage

stability• Dehazers• Biocides• Antistatic additives• Antifoam additives• Reodorants

Fuel standardization and testing

• DIN and ASTM testing methods

Storage and transportation

Storage: floating and fixed-roof tanks

Transportation: pipelines, tank ships, rail tankers, road tank trucks

Emission-free loading and unloading of gasoline

Route of liquid hydrocarbons from

the well to the consumer

Reduction of hydrocarbon emission during refuelling

Alternative fuels

7. Automotive exhaust gas purification catalysts

Otto engines

Diesel engines

Reactions and products in the engine and in the catalytic converter

Reactions and products in the catalytic converter

Development of automotive catalysts

Hydrocarbon trap

Working of the electrically heated catalyst

Oxygen storage in three way catalysts

New oxygen storage material: ACZalumina between cerium and zirconium oxide

The diffusion barrier concept for ACZ compared with CZ. (a) ACZ: the sintering of CZ is inhibited by Al2O3 particles dispersed among CZ particles; (b) CZ: sinter easily without any dispersal.

The TWC catalyst is not effective in reducing NOx when the engine is operated lean of the stoichiometric air to fuel ratio (λ > 1).

Lean operation

Fuel reach operation

Only for <1 s

Decreasing of sulfur poisoningCombination of TiO2 and -Al2O3 to minimize the amount of SOx deposition,

hexagonal cell monolithic substrate to enhance the removal of sulfate,

Rh/ZrO2-added catalyst has high activity of hydrogen generation via steam reforming.

Photographs of wash-coat layer on square-cell (left) and hexagonal-cell (right) monolithic substrate.

The catalytic reactions are:

Non-desirable reaction:

Diesel particulate trap with burner

Catalytic particulate trap

Hybrid drivingGasoline engine - The hybrid car has a gasoline engine much like the one you will find on most cars. However, the engine on a hybrid is smaller and uses advanced technologies to reduce emissions and increase efficiency. Fuel tank - The fuel tank in a hybrid is the energy storage device for the gasoline engine. Gasoline has a much higher energy density than batteries do. For example, it takes about 1,000 pounds of batteries to store as much energy as 1 gallon (7 pounds) of gasoline. Electric motor - The electric motor on a hybrid car is very sophisticated. Advanced electronics allow it to act as a motor as well as a generator. For example, when it needs to, it can draw energy from the batteries to accelerate the car. But acting as a generator, it can slow the car down and return energy to the batteries. Generator - The generator is similar to an electric motor, but it acts only to produce electrical power. It is used mostly on series hybrids. Batteries - The batteries in a hybrid car are the energy storage device for the electric motor. Unlike the gasoline in the fuel tank, which can only power the gasoline engine, the electric motor on a hybrid car can put energy into the batteries as well as draw energy from them. Transmission - The transmission on a hybrid car performs the same basic function as the transmission on a conventional car. Some hybrids, like the Honda Insight, have conventional transmissions. Others, like the Toyota Prius, have radically different ones.