WIN Wind-Powered Water Injection

WIN WIN - Wind -powered water injection – Industry innovation and the development of an «impossible» idea

1st of March 2017 Johan Slätte, Senior Engineer

Ungraded

• Introduction to DNV GL • Background to the WIN WIN JIP • Brief introduction to Floating Wind • The innovation project and it’s different phases • Summary and conclusions • Q&A

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MARITIME OIL & GAS ENERGY BUSINESS SOFTWARE ASSURANCE

RESEARCH & INNOVATION

4 DNV GL © 2016 15 June 2016 Leveraging on experience - Offshore wind industry DNV + GL + KEMA + Nobel Denton + Garrad Hassan = DNV GL Energy The world’s largest certification and advisory firm in renewable energy

6 DNV GL © 2016 15 June 2016 WIN WIN - Wind-powered water injection Assessing a new concept for water injection, utilizing wind power WIN WIN is a concept for a new generation of oil recovery technology currently being assessed. It comprises a floating wind turbine which supplies power to a water injection process. The concept is a fully stand-alone system that includes pumps and basic water treatment. Our ambition is that WIN WIN will reduce costs, increase flexibility, and reduce emissions.

WIN WIN phase 1 main conclusions 1. Commercially competitive alternative in a range of cases 2. No technical showstoppers identified 3. Technically feasible

Successful operation and deveopments The development of EOR technology / of floating wind technology Tyrihans Raw Seawater injection for EOR

Image: Statoil Image: OTC 20078

Winter April 2014 February 2015 May 2016 -> 2013/2014 Phase 2, pilot Concept first presented Partnership formed Project results testing and Idea developed at OTC with call for a and project started presented at OTC commercial project internally joint industry project

• Statoils Hywind demonstrator, a floating wind turbine located offshore Stavanger, Norway, has been operating since 2009. In the record year of 2011 it produced 10.1 GWh.

• The potential for moving the test unit to the Valemon platform has been assessed by statoil.

• Valemon is today supported by power from the Kvitebjørn platform, 10 km away

• From being able to shut down one of the two gas tubines, a reduction

of 11000 tons of CO2 could be a achieved, with associated costs.

SPAR Semisubmersible TLP

NREL

. 2009: Hywind demo – 1st spar buoy

. 2009: Hywind demo – 1st spar buoy . 2011: WindFloat demo – 1st semi-sub

. 2009: Hywind demo – 1st spar buoy . 2011: WindFloat demo – 1st semi-sub . 2012: Kabashima/Goto Spar – 1st concrete/steel

. 2012: VolturnUS – 1st concrete semi-sub

. 2009: Hywind demo – 1st spar buoy . 2011: WindFloat demo – 1st semi-sub . 2012: Kabashima/Goto Spar – 1st concrete/steel

. 2012: VolturnUS – 1st concrete semi-sub . 2013: Compact Semi – 1st turbine connected to:

. 2009: Hywind demo – 1st spar buoy . 2011: WindFloat demo – 1st semi-sub . 2012: Kabashima/Goto Spar – 1st concrete/steel

. 2012: VolturnUS – 1st concrete semi-sub . 2013: Compact Semi – 1st of the Fukushima demonstration unit . 2013: Fukushima floating substation – 1st floating substation

Source: Windpower Monthly

WindFloat Atlantic Hywind Scotland . 27.5 MW off Portugal’s coast . 30 MW off Peterhead in Scotland . 30 m€ in funding from NER300 . Financed by ROCs . Operation aimed for 2018 . In operation from 2017

Image: http://www.macartney.com/ Image: Statoil

. Technology is developing

. Leveraging on the knowledge and competence from O&G

. Costs are coming down – The first arrays (several units) are to be commissioned in 2017-2019

. Potential to support O&G / other applications – Business cases

. Leading to the WIN WIN JIP

Image: Knut Ronold, DNV GL

Is oil recovery affected by variable Can WIN WIN inject the required injection rates? volumes of water? How much does it cost? Will the wind-powered system Is it competitive with conventional function in an off-grid environment? technology?

I. Stand-alone system with II.Stand-alone system III. Connected to platform topside equipment with subsea equipment

I. Standalone system with key equipment (pump, water treatment system) integrated with the floating structure (‘Topside’) II. Standalone system with key equipment subsea (pump, water treatment system) III. Concept option I or II with power cable to production platform (i.e. system is not standalone)

Geographic location: North Sea

Water depth [m]: 200

Distance from production host [km]: 30

Reservoir conditions: 1 template, 2 injection wells, normal injectivity with specified injectivity index

Target injection rate [bbl/d]: 44 000

Maximum injection rate [bbl/day]: 81 000

Maximum pump discharge pressure [bar]: 130

Water treatment requirements: Water filtration / chemical injection

Conventional Gas Turbine System

3 MW gas turbine located on platform . . Subsea flowline between platform and injection well . 16.500 tonnes annual CO2 emission per well . Average 44.000 barrels of water injected per day

Wind powered water injection (WIN WIN) . 6 MW wind turbines and 2x2 MW pump . Autonomous system, injection through riser . Zero CO2 emission . Average 44.000 barrels of water injected per day

29 DNV GL © 2016 15 June 2016 The base case configuration and its functionality 1. A standard wind turbine is mounted to a floating foundation. This foundation also serves as a platform for the water injection system.

2. An electrical micro grid enables controlled start-up and shut-down of the system, and ensures that power demand matches power supply during operation. A battery bank ensures power to critical safety and communication functions during periods of no wind.

3. Communication with the host platform is enabled through satellite communication. A conventional control umbilical can also be used.

4. The system uses sea water, which is pumped topside using lift pumps.

5. The sea water is filtered down to 50 micron using a vertical disc filter with backwashing capability.

6. The water is treated with chemicals. Chemicals are stored on board in vessels, and refilled during other maintenance activities on the platform.

7. Water is injected into the reservoir by injection pumps.

. Key performance issues addressed in the project include delivering required injection volumes, understanding overall availability as well as investigating start-stop cycles and downtime.

. For the use case considered and others, WIN WIN exceeds target injection rates over time.

. Injection volumes over time have been simulated based on realistic wind-data for the use case, showing that volumes exceed target rate, despite some periods of low wind.

. Total CAPEX for the use case configuration with process equipment located topside comes to around 75 MEUR.

. The wind structure and marine operations and logistics are the two main CAPEX drivers, together contributing to more than 50% of CAPEX costs.

. The pump system and development costs are also significant in the overall investment.

. To achieve a realistic estimate of the O&M cost and performance, DNV GL has modelled the system taking into account failure rates, repair times and wind and wave data.

. The resulting annual average operation and maintenance costs are on the order of 4,7 MEUR.

. Key drivers include parts, chemicals, and vessel costs.

. Increased reliability of the system would positively influence maintenance frequency and scope, in particular for unscheduled maintenance, reducing operational expenditures.

. The use case costs have been compared with a conventional alternative where water injection is accomplished with a flowline from the host.

. While WIN WIN has higher operational expenditures compared to a conventional alternative, the significantly lower capital expenditure means that it comes out comparable in 20 year life-cycle comparison.

. WIN WIN is therefore a commercially competitive alternative in a range of cases, and especially when host platform capacity is limited or injection wells are located far away.

WIN WIN Phase 2 –Work Packages (WP)

A. Validate B. Innovate C. Recommend D. Explore

A.1 A.2 B.3 B.4 C.5 D.6

Identify other Identify and assess Development of Detailed assessment Detailed technology applications where Electrical system of pump type, opportunities to guideline for design wind power could assessment of water validation performance improve reliability and and operation of WIN prove a cost-effective treatment systems and reliability reduce OPEX WIN solution for the oil and gas industry

Johan Slätte [email protected] + 47 917 38 338

www.dnvgl.com

SAFER, SMARTER, GREENER

Injected Volume Loss due to Equipment Failure Loss due to wind variation Injection Target

80,000

70,000

60,000

50,000

40,000

30,000

20,000 Injected Volume (bbl/d) Volume Injected

10,000

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Lifecycle cost per barrel of water, WIN WIN vs alternative, EUR*

1.40

Wells 1.20 Decommissioning

OPEX $3 1.00 CAPEX

saved per barrel of oil 0.80

0.60 [EUR/bbl]

0.40 17 000 tCO2

Levelized cost of water injection injection water of cost Levelized 0.20 Avoided per year

0.00 WIN WIN Alternative

*Only includes difference in well cost, full well cost not included. Assumed oil:water ratio of 1:20

39 DNV GL © 2016 15 June 2016 An innovation project now entering a second Phase In the phase 1 of the WIN WIN project a technical and commercial feasibility assessment was conducted with successful results. DNV GL and its joint industry partners have now started a phase 2 to drive the concept further towards commercialization by maturing the technical solutions, reducing uncertainty and cost, and enhancing performance.

Phase 1 - Benefits Phase 2 - Objectives

Feasible: The concept is, to a large extent, based on commercially The objective for Phase 2 is to develop the WIN WIN concept towards off-the shelf components and systems. Many of the remaining parts commercialization. The project will overall on the four following pathways: are already undergoing full-scale testing.

Effective: WIN WIN meets performance requirements for a wide range of injection volumes and several reservoir types. Validate: Build confidence and reduce uncertainty in the technical Competitive: The concept can be cost-competitive, especially solution developed in Phase 1 when the host platform capacity is limited or the injection well is located far away. Innovate: Improve performance and competitiveness

Emission: Potential to reduce emissions, reduce carbon tax, from reduced need of operating gas turbines. Recommend: Develop guidelines for the design and operation of Flexible: The inherent flexibility of the WIN WIN concept means WIN WIN that more water injection locations can be targeted through easy relocation, regardless of distance to platform. Explore: Identify other applications where wind power can provide Innovative: Building on the strength of two industries, oil and gas a cost effective solution joins forces with wind to achieve something greater together, also enabling a faster commercialization of floating wind turbine technology