Shell s Canadan Sour Gas and Sulphur Experiences: Learnings from 60 years of business

Transcription

1 Shell s Canadan Sour Gas and Sulphur Experiences: Learnings from 60 years of business Dr. Larry Marks Dr. Neil Carmichael General Manager Global Portfolio Country Chairman Shell Sulphur Solutions By Shell Turkmenistan Calgary, Alberta, Canada Ashgabat, Turkmenistan Presented to the International Conference on Prospecting, Exploration and Development of Gas Fields and Mineral Resources of Turkmenistan Ashgabat, Turkmenistan March 28, 2008 Shell Sulphur Solutions Rising to the Sulphur Challenge

2 Agenda 1. Introduction 2. Sour gas resources in Canada 3. Public safety and sour gas 4. Clean Air Strategic Alliance 5. Shell's sour gas and sulphur experiences.. Canada and globally 6. Conclusions

3 Agenda 1. Introduction 2. Sour gas resources in Canada 3. Public safety and sour gas 4. Clean Air Strategic Alliance 5. Shell's sour gas and sulphur experiences.. Canada and globally 6. Conclusions

4 Canadian Hydrocarbon Basins West Coast Coal Bed Methane Tight Gas Beaufort Mackenzie Corridor Oilsands In Situ Foothills Sour Gas Oilsands Mining Current Gas Producing Areas Foothills sour gas Nova Scotia Offshore Basin Centered Gas and Coal Bed Methane Growth Areas Unconventional gas Frontiers Labrador Orphan Sable

5 Alberta - Canada s Sour Gas Endowment British Columbia Alberta Sour gas is 21% of Alberta s reserves ( 234 x 10 9 m 3 ) Peace River Cumulative production since x 10 9 m 3 Prince George Shell sour gas plants Vancouver Edmonton Calgary 33% of marketed gas is sour Average H2S content = 9% (range = 0.01% to 35%) Largely in non-associated pools. First discoveries in 1940 s Source:

6 H2S distribution in Alberta s remaining sour gas reserves m to 2 2 to to to 30 > 30 H2S content in reserves ( % ) Source:

7 Canada s Oil Sands World Class Resource Peace River Athabasca World Class Growth 3 Oil Sands Production ( millions of barrels per day ) B.C. Fort McMurray Alberta 2 Edmonton Cold Lake Sask Billion Calgary Barrels 20% Mining, 80% In-Situ 1 Billion Tonnes of Sulphur Source: CAPP

8 Agenda 1. Introduction 2. Sour gas resources in Canada 3. Public safety and sour gas 4. Clean Air Strategic Alliance 5. Shell's sour gas and sulphur experiences.. Canada and globally 6. Conclusions

9 Public safety and sour gas Alberta Energy Resources Conservation Board (energy regulator in Canada s main petroleum province) Vision: A regulatory framework that inspires public confidence Major initiative to study sour gas operations and recommend improvements Five key areas resulting in 87 recommendations: Health effects and sour gas Development Planning & Approval Sour gas operations Emergency Preparedness Information, communication & Consultation Source: Key inputs by Shell Canada

10 Emergency Planning Zone (EPZ) near a sour gas well during drilling EPZ size and shape depend on wellspecific parameters. 5 km LEGEND: EAZ - Emergency Awareness Zone IIZ - Initial Isolation Zone PAZ - Protective Action Zone EPZ - Emergency Planning Zone Information on residents, roads, public and industrial locations collected public involvement process. Plans drawn up and drills undertaken to deal with range of potential releases. Notification, evacuation and temporary shelters are all part of the plan.

11 Agenda 1. Introduction 2. Sour gas resources in Canada 3. Public safety and sour gas 4. Clean Air Strategic Alliance 5. Shell's sour gas and sulphur experiences.. Canada and globally 6. Conclusions

12 Clean Air Strategic Alliance (CASA) Multi-stakeholder partnership Representatives from industry, government and non-government organizations Recommends strategies to assess and improve air quality in Alberta. Examples: developed framework to actively reduce well venting and flaring. Shell Canada an early adopter of in-line testing of sour gas wells.

13 Agenda 1. Introduction 2. Sour gas resources in Canada 3. Public safety and sour gas 4. Clean Air Strategic Alliance 5. Shell's sour gas and sulphur experiences.. Canada and globally 6. Conclusions

14 Southern Alberta: Shell s Core Areas Tay River Well Operational Excellence HSE top priority Asset Integrity Disciplined cost control Disciplined production focus Stakeholder engagement Dimensions (2007) 4 plants 300 wells across 20 fields 28 x 10 9 m 3 / d raw gas feed (Shell and 3 rd parties processed in our plants) 2 to 35% H 2 S 5000 t/day equity sulphur t/day 3 rd party km

15 Shell s Sour Gas History in Canada Jumping Pound (discovered 1944) Burnt Timber / Limestone Caroline & Shantz Tay River Waterton Bearberry (89% H2S)

16 Sour Gas and Sulphur: What have we learned? Technical Political Success requires excellence Economic Organizational Commercial

17 Sour Gas and Sulphur: What have we learned? Public Consultation Regulatory Commitment to HSE Linking R&D to the field Development Planning Collaborative Research Drilling & Completions Reservoir management Political Organizational Contractor Management Asset Integrity Technical Success requires excellence Joint Ventures Assuring Operator Competence Corrosion & Materials Economic Commercial Acid Gas Injection Liquid Sulphur Pipelines Sulphur Transport & Logistics Value Added Sulphur Products Marketing Unit Technical Costs Gathering Systems Gas Plant Construction Sulphur Recovery Units Customer Focus Value Added Sulphur Products

18 Agenda 1. Introduction 2. Sour gas resources in Canada 3. Public safety and sour gas 4. Clean Air Strategic Alliance 5. Shell's sour gas and sulphur experiences.. Canada and globally 6. Conclusions

19 Worldwide Energy Consumption 800 Quadrillion BTU per year % average annual increase Nuclear Coal Natural Gas Derived from: Energy Information Administration, 2007 Oil Hydro & Renewables

20 Global Fossil Fuel Resource Portfolio Gas and Oil Gas Oil Coal Gas Shales Gas to Liquids Unconventional Resources Tight Gas Conventional Stranded Resources CBM Coal to Liquids Clean Coal More Volume Heavy Oil Oil Sands Increasing costs & technology needs Oil Shales Significant volumes of sulphur as co-product

21 Significant Sour Gas Areas

22 Hard Truths of The Energy Challenge 1) Population growth and economic development are accelerating energy demand 2) Easy supplies of oil and gas cannot meet that demand 3) Greenhouse gas emissions are rising even faster than energy demand. Leveraging Shell s Canadian experience in sour gas development and sulphur handling / marketing will be a key to unlock global resources.

23 The Sulphur Equation Higher energy demand + Much of remaining hydrocarbon resource is sour + Shell s commitment to responsible energy development = MORE SULPHUR

24 The Answer. Shell Sulphur Solutions is a new organization, created to: Manage all Shell s global sulphur as a value added commodity Deal directly with end customers Assemble and deliver on strategic sulphur business plans Develop and deploy new technologies for sulphur usage Build upon and globalize Shell experiences in Canada

25 Sulphur Sales Supply & Operations Standards & HSE Neil: we could Shell Sulphur Solutions Sulphur in Sulphur in Fertilizer Asphalt (Bitumen) Sulphur in Cement

26 Conclusions Canada: a rich endowment of sour gas and sulphur Regulatory framework exists to develop these resources responsibly. Shell: long-time leader in sour gas exploration & production. Sulphur management: a key competency in Shell s licence to operate Shell s Canadian sour gas / sulphur expertise available for global opportunities. With proper knowledge and experience, sour gas can be developed and produced safely and economically.

27 Shell Sulphur Solutions Rising to the Sulphur Challenge Thank you!

28 H2S distribution in Alberta s remaining sour gas reserves m 3 Initial Reserves Remaining 10 1 < 2 2 to to to 30 > 30 H2S content in reserves ( % ) Source:

29 H2S distribution in Alberta s remaining sour gas reserves m 3 Initial Reserves Remaining < 2 2 to to to 30 > 30 H2S content in reserves ( % ) Source:

30 Sour Gas and Sulphur: What have we learned? Drilling & Completions Asset Integrity Corrosion & Materials Acid Gas Injection Reservoir management Technical Liquid Sulphur Pipelines Political Success requires excellence Economic Organizational Commercial

31 Sour Gas and Sulphur: What have we learned? Drilling & Completions Reservoir management Political Organizational Asset Integrity Technical Success requires excellence Corrosion & Materials Economic Commercial Acid Gas Injection Liquid Sulphur Pipelines Unit Technical Costs Gathering Systems Gas Plant Construction Sulphur Recovery Units

32 Sour Gas and Sulphur: What have we learned? Drilling & Completions Reservoir management Political Organizational Asset Integrity Technical Success requires excellence Joint Ventures Corrosion & Materials Economic Commercial Acid Gas Injection Liquid Sulphur Pipelines Sulphur Transport & Logistics Unit Technical Costs Gathering Systems Gas Plant Construction Sulphur Recovery Units Inventory Management Marketing Value Added Sulphur Products Customer Focus & Contract Management

33 Sour Gas and Sulphur: What have we learned? Linking R&D to the field Development Planning Collaborative Research Drilling & Completions Reservoir management Political Organizational Contractor Management Asset Integrity Technical Success requires excellence Joint Ventures Assuring Operator Competence Corrosion & Materials Economic Commercial Acid Gas Injection Liquid Sulphur Pipelines Sulphur Transport & Logistics Value Added Sulphur Products Unit Technical Costs Gathering Systems Gas Plant Construction Sulphur Recovery Units Inventory Management Marketing Customer Focus & Contract Management

34 Sour Gas and Sulphur: What have we learned? Public Consultation Regulatory Commitment to HSE Linking R&D to the field Development Planning Collaborative Research Drilling & Completions Reservoir management Political Organizational Contractor Management Asset Integrity Technical Success requires excellence Joint Ventures Assuring Operator Competence Corrosion & Materials Economic Commercial Acid Gas Injection Liquid Sulphur Pipelines Sulphur Transport & Logistics Value Added Sulphur Products Unit Technical Costs Gathering Systems Gas Plant Construction Sulphur Recovery Units Inventory Management Marketing Customer Focus & Contract Management