Offshore Forum. How can we optimise off/onshore cost and operation? 28 May 2014

Offshore Forum How can we optimise off/onshore cost and operation? 28 May 2014 Doc. No. 14/06209-11 28 May 2014 Offshore Forum 1

Introduction Søren Juel Hansen sjh@energinet.dk Tel: (+45) 23 33 87 44 28 May 2014 Offshore Forum 1

About Energinet.dk Date - Doc. no. 2

About Energinet.dk 28 May 2014 Offshore Forum 3

Electricity transmission grid 28 May 2014 Offshore Forum 5

Gas transmission before 2013 Dato - Dok.nr. 6

Gas transmission after 2013 Dato - Dok.nr. 7

Current operative partners Dato - Dok.nr. 8

Large-scale investments - stable tariff 28 May 2014 Offshore Forum 4

Energinet.dk Gas Aims According to the gas supply act: 1. Security of Supply 2. Market Development 3. Climate and Environment Implicit aims: 4. Maximise the socio economic values in the North Sea (follows from the decision making Danish Energy Agency report on Ellund-Egtved from the Spring 2010) 5. Support the always current energy policy (follows from Energinet.dk s 100% state ownership) 28 May 2014 Offshore Forum 10

Energinet.dk Gas Aims According to the gas supply act: 1. Security of Supply 2. Market Development 3. Climate and Environment FOCUS OF TODAY Implicit aims: 4. Maximise the socio economic values in the North Sea (follows from the decision making Danish Energy Agency report on Ellund-Egtved from the Spring 2010) 5. Support the always current energy policy (follows from Energinet.dk s 100% state ownership) 28 May 2014 Offshore Forum 11

Former Climate & Energy Minister Martin Lidegaard on the Danish Energy Policy Oil Gas Summit, Oil and Gas Denmark, Copenhagen, Denmark, September 10, 2013... In Denmark we have broad political backing for using the Danish resources of oil and gas to the largest possible extent. Denmark is an oil and gas producing country and we will use that to benefit the Danish society and the green transition we have begun. we will make a strategy for oil and gas. It is still too early to say anything about the content of the strategy, but I can elaborate on my thoughts at the moment. Infrastructure; we need to look at the old facilities with increasing maintenance in a time of decreasing production. We have to look at energy efficiency. We need to make sure that we focus on technology development to increase the recovery factor of oil and gas. 28 May 2014 Offshore Forum 12

Agenda for Today 13.00 14.10 - Session 1: Release and presentation of a study by Mærsk, DONG and Energinet.dk 14.10 14.30 - Coffee Break 14.30 16.00 - Session 2: 28 May 2014 Perspectives for future optimisation from Oil-Gas- Denmark, Gassco and Danish offshore key stakeholders 13

Feasibility Study Compression of DUC gas at Egtved Energinet.dk s approach to the project: maximise the Danish North Sea production increase the overall infrastructure energy efficiency reduce overall compressor emissions maintain capacity, the current high level of security of supply and on-spec gas quality in the transmission system 28 May 2014 Offshore Forum 14

Feasibility Study Compression of DUC gas at Egtved When MOG/DUC approached Energinet.dk had 2 options: Calling everybody for a common feasibility study Making a focused study and share it today We look forward to discussing the study with you! 28 May 2014 Offshore Forum 15

DUC - DONG - ENDK Offshore Basis

Mærsk Oil & Gas perspective Normal export pressure @ Tyra is 100-110 barg. Lower export pressure => lower Tyra compression power Can Egtved compression enable lower Tyra export pressure? Lower export pressure reduce offshore compression power Low pressure gas transport to shore is less efficient Overall infrastructure energy efficiency will be a balance of the above 30 July 2015 #17

Feasibility perspective DUC/MOG is evaluating feasibility of: reducing the required pressure ab Tyra and ab Nybro In Q4 2013 MOG has contacted Energinet.dk with an inquiry: can gas from the North Sea be compressed at Energinet.dk s new compressor station in Egtved? Focus: possibility to save energy with current configuration possibility to optimise possible future compressor configurations Dato - Dok.nr. 18

Gas Infrastructure related to North Sea gas export to shore 24 30 July 2015 #19

Offshore Gas Infrastructure 30 July 2015 #20

Relevant interfaces/boundary conditions Existing Nybro HC dew point process in Nybro is a HCFC (Freon) driven chilling system commercial use of HCFC is banned from 2015 DONG is currently investigating a suitable replacement Energinet.DK has recently constructed a compressor station in Egtved The Hejre project includes construction of a processing plant in Fredericia, for extraction and fractionation of NGL s from Hejre crude petroleum DUC/MOG is considering future compressor configurations offshore Tyra page 21

Offshore Forum Nybro infrastructure challenges and possibilities 28 May 2014 Peter Schroll Christiansen

Nybro infrastructure challenges and possibilities Danish Upstream Transportation System Harald South-Arne Tyra East Nybro Aerial view of Nybro 23

Nybro infrastructure challenges and possibilities Current Nybro facts 2 gas receiving terminals: Tyra terminal receiving all gas from DUC-fields, Trym-field and Lulita-field South Arne terminal receiving all gas from South Arne field and from 2015/16 also Hejre-field. Tyra terminal: Build in 1982-1984 Current Nybro facts Primary function: Meter and regulator station for up to 25 mcm/day of onspecification gas. Secondary function: back-up to offshore gas treatment with a capacity of ~11 mcm/day of off-specification gas wrt: H2S removal HC dew point adjustment Water dew point adjustment South Arne terminal: Build in 1998-1999 Primary function: Meter and regulator station for up to ~6,5 mcm/day of onspecification gas No separate gas treatment capability 24

Nybro infrastructure challenges and possibilities Current Nybro facts Nybro constraints Nybro additional capabilities: Normal operational mode: Blending of gas from the 2 terminals to mitigate transient off-specification gas situations at one of the terminals. Danish Emergency Situation: Possibility of importing and treating gas from Harald platform in a situation with outtage of the Tyra to Nybro offshore pipeline. Environmental impact: H2S removal emits SO2 to atmosphere HC dew point adjustment cause flaring of NGL's Hence: Authorities have imposed restrictions on the usage of Nybro gas treatment facilities. 25

Nybro infrastructure challenges and possibilities Nybro challenges 26

Nybro infrastructure challenges and possibilities Nybro possibilities (stand alone) Nybro / Tyra possibilities How can Nybro stay efficient (low Opex/CF) and competitive (low Opex/boe)? Answers: 1. Decommission parts of Nybro to lower Opex (and CF) and/or 2. Attract new volumes to Nybro in competition with Norwegian/Dutch/UK alternatives in order to increase throughput (boe) How can Nybro and Tyra together stay efficient (low Opex/CF) and competitive (low Opex/boe)? Answers: 1. By moving processes from the Tyra platform to onshore Nybro, opex can be lowered without increasing CF 2. Attract new volumes via Tyra to Nybro in competition with Norwegian/ Dutch/UK alternatives in order to increase throughput (boe) ad 1) has not so far been successful due to contractual obligations ad 2) has been (partly) successful by attracting Norwegian Trym-field and Danish Hejre-field. Danish Solsortfield is under evaluation ad 1) currently being looked at by Mærsk and DONG. ad 2) has been (partly) successful by attracting Norwegian Trym-field. Danish Solsort-field is under evaluation 27

Compressor station Egtved Nina F. Vendelboe Dato - Dok.nr. 28

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Capacity Expansion Ellund - Egtved Compressor Station in Egtved 4 Compressor Units each 5,5 MW (3+1) Gas transmission pipeline from the Danish/German border Ellund/Frøslev Egtved 94 km 30 pipeline (Ø 750 mm) Capacity: 1,000,000 m³/h - 700,000 m³/h Investment 200 MEUR In operation October 2013 3. november 2009 Infrastructure development in Denmark 32

Dato - Dok.nr. 33

Operation of the compressor station We have built a compressor station at the crossing of the Danish natural gas transmission system We can raise the pressure from approx. 45 bar to approx. 80 bar depending on the duty point Suction can be made from one or more of 4 separate subsystems in the transmission system and supplied to a joint pool The compressor station must have incorporated redundans in all subsystems so that we always can proceed if something fails + + Dato - Dok.nr. 34

A typical compressor station

Compressor units og header in Egtved North West South/ East Header North +West East South Unit

Compressor unit Cooler Cooler by-pass Freeflow Bypass (valve) Filter separator Recirculation loop Compressor building Slide 37

Stage 2 Motor Stage 1

Flexible use of the Compressor Flow scenarios The capacity from South (Ellund) 700.000 Nm 3 /h with 2 compressor units in operation. Dato - Dok.nr. 39

Flexible use of the Compressor Flow scenarios Unchanged capacity from West (Nybro) Free flow above 1 mio. Nm 3 /h. Dato - Dok.nr. 40

Flexible use of the Compressor Flow scenarios The capacity from North (Ll. Torup) must be 200.000 Nm 3 /h with one unit in operation and additional flow from West and/or South. Dato - Dok.nr. 41

Energinet.dk Results of the feasibility study: Compression of DUC gas in Egtved Claus Møller Petersen Dato - Dok.nr. 42

Agenda Background Scope Case assumptions Scenarios Important notes Conclusion Dato - Dok.nr. 43

Background The feasibility study is initiated on DUC s request and is covering the possibility of moving compression of gas from offshore to ENDKs compressor station in Egtved. Dato - Dok.nr. 44

Scope Egtved Layout optimal piping and equipment Operation philosophy, flexibility etc. Pressure ab Nybro Defining minimum pressure ab Nybro Based on temp. -13 C Cost estimates Estimation of CAPEX Estimation of OPEX Dato - Dok.nr. 45

Case assumptions Energy price (ENDK forecast) Max volume by 2020 Tyra: 250,000 Nm3/h S. Arne + Hejre: 100,000 Nm3/h DKK 0.82 kwh (2020) Egtved energy Compressor set-up consumption Redundancy (3+1) is maintained 0.6 Wh/(Nm 3 bar) Dato - Dok.nr. 46

Scanario 1 Lowering the gas pressure in both Nybro-Egtved pipelines. Nybro Nybro-Egtved North Low Pressure Egtved compressor Nybro-Egtved South Low Pressure Dato - Dok.nr. 47

Scenario 1 No re-design in Egtved, i.e. no CAPEX Pressure requirement ab Nybro: 54 bar OPEX: Approximately DKK 40 million per year. Dato - Dok.nr. 48

Scanario 2 - Low pressure is delivered in one of the two pipelines (gas from Tyra) - High pressure is maintained in the other pipeline (gas from SA and Hejre) 2.1 Nybro Nybro-Egtved North High Pressure Egtved compressor Nybro-Egtved South Low Pressure 2.2 Nybro Nybro-Egtved North Low Pressure Egtved compressor Nybro-Egtved South High Pressure

Scanario 2 Pressure requirement in the low pressure pipeline ab Nybro: 50 bar Re-design (several designs identified) in Egtved est. at DKK 25 million OPEX is estimated at DKK 37 million p.a. Dato - Dok.nr. 50

Important notes Gas quality Gas entering the transmission grid must be within the gas quality specification Costs Estimates (construction costs) Forecast (energy prices) Timing Costs 12 months from go-signal in case of technical modification Dato - Dok.nr. 51

Conclusion Yes, reducing pressure ab Nybro from 78 to 54 barg is possible! Two alternatives analysed: 1. Pressure reduction in both pipelines 2. Pressure reduction in only one of the pipelines Key parameters to observe: Volume expectations Pressure ab X (Nybro, platform, other points) Dato - Dok.nr. 52