SOLAR ENRICHED OIL RECOVERY

The Sultanate is well-positioned to grow into a hub for solar EOR technologies and supporting industries. A new Ernst and Young (EY) report sponsored by GlassPoint Solar and titled Solar Enhanced Oil Recovery: An In-Country Value Assessment for Oman concludes that the full-scale deployment of solar EOR in Oman, in which solar produces 80 percent of the steam needed for EOR, would redirect up to 531,000 mcf of gas per day by the end of 2023, Rod Mac Gregor, CEO of GlassPoint tells Oommen John P in an interview.

Tapping the enormous solar energy potential in the Sultanate will turn the country into a solar manufacturing hub for the entire region. What’s more one may ask? Full-scale deployment of solar Enhanced Oil Recovery (EOR) by the end of 2023 could save 531,000 mcf of gas per day and generate up to 212,000 jobs throughout the Sultanate.

Additionally, if the Sultanate were to localise the supply chain for solar steam generators, solar EOR could contribute more than $12bn to Omani GDP over the next decade, according to a new report by Ernst & Young (EY).

“Natural gas used for oil production accounts for almost a quarter of the Sultanate’s total gas consumption, and that number is growing rapidly. Using solar energy for steam production will free valuable gas resources needed to power new industries and diversify the economy,” says Rod Mac Gregor, CEO of GlassPoint, which has partnered with Petroleum Development Oman (PDO) to bring solar-enhanced fuel recovery to the Middle East.

Elaborating on Ernst & Young (EY)’s report sponsored by GlassPoint Solar , which is titled Solar Enhanced Oil Recovery: An In-Country Value Assessment for Oman, he says deploying solar EOR in Oman to reduce natural gas used for oil production will have a significant and lasting impact on the country’s economic growth.

As the pioneer of solar EOR, Oman can seize regional and global export opportunities which can create additional jobs by localising the solar supply chain and ancillary industries. Coupled with the impact of gas savings, full-scale solar EOR deployment across the region could create thousands of permanent jobs in Oman, as well as an additional 90,000 jobs to support project construction. The Sultanate is well-positioned to grow into a hub for solar EOR technologies and supporting industries. As a result, the nation’s workforce will develop greater expertise across solar technology innovation, project deployment and manufacturing. Experience with solar EOR development will transfer to other energy-related sectors, fostering broader economic growth, he says.

“GlassPoint, a leading provider of solar steam generators to the oil and gas industry for applications such as EOR, is considering to establish a manufacturing facility and supply chain within the Sultanate to meet growing demand for solar EOR throughout the region,” says Rod MacGregor. This investment would create a world-class solar industry alongside Oman’s world-class oil and gas industry, he says.

“There are also immediate opportunities for solar EOR in Oman’s neighbouring countries which are also challenged by gas scarcity and oilfield maturity, but enjoy abundant sunshine,” MacGregor adds. “Solar EOR projects can enable substantial economic growth wherever they’re deployed,” he avers.

The neighbouring countries are potential customers of Oman’s solar industry, creating the opportunity for Oman to become a solar manufacturing hub for the entire region. Petroleum Development Oman (PDO) has long recognised the potential for solar power, and was the first producer in the region to implement solar enhanced oil recovery into their operations. It established a 7MWt pilot project in the Amal oilfield. The pilot project has delivered its targets so far and large-scale deployment is contemplated.

In 2012 the Sultanate produced 920,000 barrels per day (bbl/d) of crude oil, ranking 21st in global oil production by country. It also produced 2.8 billion cubic feet (bcf) of natural gas, making it the fifth largest gas producer in the Middle East and the 26th largest in the world. Over the past ten years, due to the maturity of its oil fields, Oman’s domestic crude oil production has increasingly relied on EOR technologies. Several techniques have been deployed, although thermal EOR, the focus of this report, dominates. The main thermal EOR technique entails burning natural gas to produce steam, which is injected into the reservoir to heat heavy oil and reduce its viscosity. The process increases both the rate of production and the amount of oil that can ultimately be recovered.

The oil and gas sector in Oman is investing significantly in EOR. Petroleum Development Oman (PDO), which commissioned its first EOR project in 2004, announced in 2012 that EOR would grow from 3 per cent of current oil production to 25 per cent of total liquids production by 2020. Oman currently uses 22 per cent of its natural gas resources for EOR. The continuous increase in domestic demand for natural gas makes the deployment of solar EOR technology an attractive economic proposition for the Sultanate.

Solar EOR is certain to play an important role in the mix of EOR technologies. Instead of burning natural gas to produce steam, solar EOR involves the use of concentrating solar power (CSP) technology to produce steam. Mirrors are used to reflect and concentrate sunlight onto receivers that collect solar energy and then convert it to heat. The heat is then used to produce steam from water. Solar EOR can generate the same quality and temperature of steam as natural gas. Therefore, the use of solar EOR could reduce demand for natural gas required for EOR, which can be re-directed to other economic activities such as power generation,water desalination and as feedstock and energy for industrial processes.

“EOR is of strategic importance to Oman’s future oil production, but its use of natural gas creates a gas supply conflict with other national priorities,” said Mark Gregory, EY chief economist. “Using solar energy for steam production will free valuable gas resources needed to power new industries and diversify the economy.”

Gas not burned for EOR will fuel industrial expansion

Natural gas used for oil production accounts for almost a quarter of Oman’s total gas consumption, and that number is growing rapidly. EY concluded that the full-scale deployment of solar EOR in Oman, in which solar produces 80 percent of the steam needed for EOR, would redirect up to 531,000 mcf of gas per day by the end of 2023.

The gas not burned for EOR can be used for higher-value applications, such as LNG export and power generation. Additionally, gas can be redirected to the Omani private sector, where dozens of industrial projects have been cancelled or stalled in the past decade due to gas shortages.

“Greater access to natural gas is critical to achieving economic diversification,” said Ahmed Amor Al Esry, partner and oil and gas sector leader at EY Muscat. “Gas used for oil production means less gas to power Oman’s growing economy. Solar EOR can help maximise our existing gas resources, which could have a transformational impact on the future of the Sultanate.”


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