In The Spotlight
New research from Rystad Energy highlights the potential of electrification in reducing emissions in the upstream oil and gas industry
Converting upstream oil and gas production facilities to run on electricity powered by renewables or natural gas that would otherwise be flared could cut more than 80% of associated emissions, according to Rystad Energy.
The energy consultancy notes the success of Norway in reducing emissions from rigs and other assets by 86% through electrification, with plans to cut emissions from the continental shelf by 70% by 2040, thanks to its abundant renewable energy resources.
Other producing countries may face logistical barriers when converting assets, including significant distances from the mainland, a lack of power grid infrastructure and limited renewable power capacity.
The role of premium energy basins
‘Premium energy basins’ (PEB) – a term coined by Rystad Energy to describe oil and gas basins with ample hydrocarbon reserves and the potential to incorporate environmentally friendly practices – could play a major role in reducing upstream emissions, with the Middle East home to the top two PEBs. If PEB assets electrify and reduce emissions by 50%, a total of 5.5 gigatonnes of carbon dioxide (Gt of CO2) would be avoided by 2050. The 28 PEBs identified in the report offer estimated total emission savings of about 1.3 billion tonnes of CO2 between 2025 and 2030. The top 10 PEBs (by emissions savings) alone account for over 80% of these savings with the Middle Eastern Rub al Khali (370 million tonnes of carbon dioxide equivalent [CO2e]) and Central Arabian (251 million tonnes of CO2e) leading the rankings. Electrification in these predominantly onshore basins, if adopted more widely, would largely be driven by drawing power from a clean onshore grid.
Electrification requires careful planning, including the selection of optimal technologies, assessment of total costs and strategies to ensure a continuous energy supply, particularly in remote locations with limited grid access.
Economic and financial viability must also be prioritised. A proactive approach to electrification can enhance operational efficiency and open new revenue streams through the sale of excess renewable energy.
“As the world confronts the pressing issue of climate change, the oil and gas industry is under increasing pressure to minimise its carbon footprint and align its practices with global sustainability objectives. Where it’s possible and economically viable, electrification has great potential to lower the industry's emissions while maintaining production output,” said Palzor Shenga, vice president of upstream research with Rystad Energy.
Reducing flaring could also be an effective way of reducing upstream emissions for both electrified assets and assets with limited electrification potential, Rystad notes. Around 140bn cubic metres per annum of gas has been flared globally in the last 10 years, equivalent to around 290mn tonnes of CO2e emissions annually, mainly accounted for by major producers in North America, the Middle East and Africa.
Halliburton has launched the Clear portfolio of electromechanical well intervention technologies and services
This portfolio addresses challenges related to high-angle deployment and includes surface readout telemetry for communication and precise control to deliver differentiated performance. It includes the ClearTrac wireline tractor and ClearCut non-dangerous goods electromechanical pipe cutters. ClearShift high-expansion shifters will also soon be introduced to open and close downhole valves that include barrier isolation devices.
The ClearTrac wireline tractor is an advanced wireline conveyance technology for highly deviated or horizontal wells that require cased-hole logging diagnostics, perforating, and powered mechanical intervention services. It uses an innovative electromechanical drive and real-time telemetry for communication and precise control to deliver unmatched performance compared to pipe-conveyed solutions. ClearTrac wireline tractor achieves speeds from 5 to 125 ft per minute and carries payloads up to 1,000 lbs. with a single-drive section. It provides an economical conveyance solution that acquires data in up-and-down passes. This increases efficiency and reduces the potential for HSE incidents.
The ClearCut service portfolio offers a family of pipe severing tools for a machine shop quality cut without dangerous goods from 2⅜ to 9⅝ in. ClearCut can be deployed on eline or RELAY Digital Slickline and navigate through small restrictions. It cuts outer tubing encapsulated cables in intelligent completions.
With the elimination of explosives and chemicals, ClearCut service provides a safer alternative for complex wireline interventions.
“Our Clear suite of services delivers integrated formation evaluation and intervention solutions to improve production,” said Chris Tevis, vice president of Wireline and Perforating. “Today's launch of our power mechanical services will enable our customers to intervene in their completions in a more reliable, precise and powerful way.”
With ADIPEC fast approaching, Oil Review Middle East is offering a range of marketing solutions through our multimedia promotional programme to bring your brand to the attention of key decision makers
Our platform boasts the largest readership in the MENA region, offering unparalleled reach. You’ll benefit from exposure in both print and digital formats, maximising your visibility.
As media partner of ADIPEC, taking place from 4-7 November in Abu Dhabi, our special ADIPEC issue will have a high profile at the show, where it will be available on the media racks and throughout the exhibition halls, as well as being strategically distributed at premier business hotels around the ADNEC exhibition centre. The fully interactive digital issue will have a high profile across all our platforms. Plus, with our diverse marketing solutions, you can have comprehensive coverage, both before and at the show, from special ADIPEC e-newsletters reaching over 70,000 oil and gas professionals to targeted email campaigns, web banners, social media posts and interviews/commercial features.
Special Webcast Package
Don’t miss the opportunity to showcase your company through our very popular Special Webcast Package, with interviews conducted by our expert editors at the show to ensure engaging content. Your video will be showcased on our website, social media platforms, and in our e-newsletters, providing unparalleled visibility and driving traffic to your website.
Interested? For more information on our special ADIPEC Combo Advertising Packages and Special Webcast Package, or to discuss how we can tailor our solutions to meet your marketing objectives, please get in touch with Tanmay Mishra, email:
And if you’ll be at ADIPEC, come and see us in Hall 14 at Stand 14690, where our team will be available to discuss how we can collaborate to market your brand. Hope to see you there!
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Rockwell Automation interview with Sebastien Grau
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Rockwell Automation interview with Michael Sweet
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ADIPEC 2023 - Exclusive interview with Wissam Chehabi, Fishbones
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Rockwell Automation interview with Kalypso’s Rodrigo Alves and Knowledge Lens’ Ganesh Iyer
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ADIPEC 2023 - Exclusive interview with Feby Mohammed, Belden
Onshore Middle East is the cheapest source of new oil production, as the cost of developing new upstream oil projects continues to rise, according to new research from Rystad Energy
According to Rystad Energy, the average breakeven cost of a non-OPEC oil project grew to US$47 per barrel of Brent crude, a 5% increase in the last year alone, thanks to inflationary pressure and supply chain issues. Offshore deepwater and tight oil projects remain the most economical new supply sources, with oil sands still the most expensive.
The report found that onshore Middle East is the cheapest source of new production, with an average breakeven price of just US$27 per barrel. This segment also boasts one of the most significant resource potentials. Offshore shelf is the next cheapest (US$37 per barrel), followed by offshore deepwater (US$43) and North American shale (US$45). Conversely, oil sands production breakevens average US$57 per barrel, but can go as high as around US$75.
Cost pressures
"Rising breakeven prices reflect the increasing cost pressures on the upstream industry. This challenges the economic feasibility of some new projects, but certain segments, including offshore and tight oil, continue to offer competitive costs, ensuring supply can still be brought online to meet future demand. Managing these cost increases will be critical to sustaining long-term production growth,” said Espen Erlingsen, head of Upstream Research at Rystad Energy.
As well as breakevens, average payback for new projects, internal rate of return (IRR) and carbon dioxide (CO2) intensity are vital metrics for evaluating new oil development economics. The tight oil sector’s payback time is just two years, assuming an average oil price of US$70 per barrel, illustrating how quickly operators are recovering their investments. Payback time is closer to 10 years or more for the other supply segments. Tight oil also leads the pack in terms of IRR, with an estimated IRR of around 35% in the same average oil price scenario. Conversely, oil sands, the most expensive supply source, has the lowest IRR of approximately 12%.
Over the last three years, the average CO2 intensity for tight oil has been 14 kilograms per barrel of oil equivalent (kg per boe), while deepwater has a slightly higher average CO2 intensity of 15 kg per boe. The oil sands sector again falls behind the other segments, with the highest future estimated emissions at around 70 kg per boe.
The escalating crisis in the Middle East is triggering fears of sky-high oil prices
Oil prices could surge to US$100 a barrel if Iran's missile attack on Israel triggers a retaliatory cycle that targets energy infrastructure or closes the Strait of Hormuz, according to the latest analysis from Bloomberg Intelligence. It notes that for now, oil output and flows remain undisrupted, and upward pressure on prices may remain subdued after a 5% jump on 1 October, if escalation is avoided.
Iran's direct missile attacks on Israel have had a relatively muted impact on oil prices, with oil output and flows remaining undisrupted thus far, though a retaliatory cycle targeting energy infrastructure would result in a larger price spike. Direct attacks on energy facilities could severely disrupt oil production in the Gulf, as Yemeni drone attacks on the Abqaiq oil facilities did in 2019.
Salih Yilmaz, senior energy industry analyst at Bloomberg Intelligence commented, “In the extreme-case scenario, closing of the Strait of Hormuz could drive prices above US$100 a barrel. The strait is the only maritime route out of the Gulf, making it the world's most vital oil-supply bottleneck, with its daily flow of 21 million barrels, roughly 20% of global consumption.”
Iran's last direct attack on 13 April had a limited impact on oil prices as further escalation was avoided, Bloomberg notes.
Rystad Energy chief economist Claudio Galimberti commented, “The intensifying conflict in the Middle East is generating significant supply concern in the global crude market, with prices up more than 4% this week. The potential for supply disruptions – particularly, but not exclusively from Iran – increases as the fighting intensifies.
“But OPEC+ still sits on unusually ample spare capacity, which is the result of successive production cuts over the past two years. This spare capacity is for now preventing runaway prices amid one of the deepest and most pervasive crises in the Middle East in the past four decades.”
Rystad notes that currently, Iran produces approximately 4mn bpd of crude, exporting about half of that, mostly to China. OPEC+ spare capacity is currently more than 5mn bpd, which could be deployed relatively quickly to fill the gap. However, any blockage to the Strait of Hormuz would result in runaway prices.
Honeywell has launched a new process to improve the efficiency and sustainability of light olefin production
The naphtha to ethane and propane (NEP) technology generates a tunable amount of ethane and propane from naphtha and/or LPG feedstocks, generating more high-value ethylene and propylene with reduced production of lower-value by-products compared to a traditional mixed-feed steam cracking unit and resulting in net cash margin increases. An NEP-based olefins complex also reduces CO2 intensity per metric ton of light olefins produced by 5 to 50% versus a traditional mixed-feed steam cracker.
More efficient production
“The petrochemical industry faces strong competition and challenges in obtaining raw materials globally,” said Matt Spalding, vice president and general manager of Honeywell Energy and Sustainability Solutions in MENA. “Our technology helps to enable more efficient production of ethylene and propylene, two chemicals which are in high demand, while also helping our customers lower their carbon emissions.”
The new solution is a part of Honeywell’s Integrated Olefin Suite technology portfolio to enhance the production of light olefins.
Yokogawa Electric Corporation has launched a new ATEX-compliant wireless steam trap monitoring device for steam trap status monitoring in steam piping equipment
Developed with thermal utility engineering firm Armstrong International, the new product is part of Yokogawa's Sushi Sensor range in the OpreX Asset Management and Integrity family.
Steam traps are installed on steam distribution pipes, heat exchangers, humidifiers, sterilisers, tracers, and other equipment to remove condensate and ensure efficient heat transfer. Losses from failures in steam traps can reach tens of thousands to millions of US dollars annually. Currently, in most instances, workers are responsible for inspecting and monitoring steam traps wherever they have been installed. While the installation of an automatic monitoring system is an effective way to reduce this inspection workload, the cost of installing such systems has been cost prohibitive. In addition, there is the need to monitor not only the status of steam traps, but also a wide range of related equipment.
By facilitating the timely detection of failures in steam traps, the new product can significantly reduce energy loss. When used in combination with the other wireless pressure sensors, wireless temperature sensors, and wireless vibration sensors in the Sushi Sensor lineup, this device enables the monitoring of a wide range of equipment. Features include:
1. Automatic detection of steam trap status
This device utilises a high-quality temperature sensor and an acoustic sensor to detect the status of steam traps. It can be used in environments with a maximum steam temperature of 440°C.
2. Lower wireless network construction costs
The use of long-range wireless LoRaWAN communication gives this device the ability to communicate at distances of up to around 1km, enabling the monitoring of equipment over a wide area. These monitoring devices can thus be easily installed wherever steam traps are located, and can be connected to a single gateway, thereby holding down network construction costs.
3. Better consistency in inspection quality and less time spent on on-site inspections
The use of Yokogawa’s on-premise GA10 data logging software or other similar cloud-based software will enable the centralised monitoring of steam traps and other equipment wherever they are installed around a plant. Not only will this make for greater consistency in inspection quality, it will mean that on-site inspections do not need to be carried out as frequently.
Hiroshi Tanoguchi, a Yokogawa Electric vice president and executive officer, and head of the Yokogawa Products Headquarters, said, “With this release, we have enriched the Sushi Sensor family of solutions and made it possible to construct networks efficiently and at a lower cost. In the future, we intend to provide this as an energy monitoring solution. Based on steam trap status, this will enable the calculation of projected energy losses in monetary terms and facilitate the creation of maintenance plans, with the priority on high-risk equipment. Through the provision of such highly convenient solutions, Yokogawa is helping its customers reduce their emissions of greenhouse gases and hit their ESG management targets.”
This new product is available in Malaysia, Singapore, Thailand, and Saudi Arabia. It will be later released in the USA, Europe, and India in compliance with IECEx, FM, and other explosion-protected standards.
How can AI surveillance applications enhance operational efficiency and improve standards in onshore and offshore operations?
This will be the focus of an exclusive live webinar hosted by Oil Review Middle East, in association with industry leaders Convergint and Axis Communications on ‘Enhancing oil and gas operations with advanced video analytics’, taking place on Wednesday 9 October at 11am (KSA time).
At this webinar, Saif Al-Shahrani, KSA country director, Convergint, and Andrea Monteleone, segment development manager, Critical Infrastructure – EMEA at Axis Communications will explore the transformative impacting of adopting cutting-edge AI-driven video analytics and surveillance technologies on onshore and offshore operations.
Challenges and solutions
Our experts will provide valuable insights into the current landscape of the oil and gas sector, discussing the unique challenges faced by both system integrators and manufacturers. They will unveil the latest cutting-edge surveillance solutions for mitigating these challenges, and delve into how AI surveillance applications are enhancing operational efficiency, improving safety standards, and providing real-time insights crucial for decision-making in this high-stakes industry.
Additionally, the webinar will cover the importance of choosing the right types of cameras and aligning them with video analytics to meet specific operational objectives. It will also explore how to integrate these technologies into a centralised, multi-layered system that maximises the benefits of video analytics, all while ensuring seamless integration and optimal performance. The second in a webinar series addressing AI video analytics transformative applications for oil and gas operations, this webinar follows a highly successful and engaging earlier event on advanced surveillance for oil and gas remote facilities, attended by more than 175 people, including senior representatives of the region's leading oil and gas companies.
Whether you are involved in operations, safety or security, don’t miss this opportunity to access expert insights to help you enhance safety and improve your operations with the latest advances in surveillance technology.
You can register for this free of charge webinar at https://alaincharlestraining.com/webinar2/convergint-webinar
A new report from the IEA finds that investment and projects in low-emissions hydrogen are growing, but it still accounts for less than 1% of total hydrogen production.
The IEA’s annual Global Hydrogen Review 2024 finds that the momentum for low-emissions hydrogen is growing, as illustrated by a wave of new projects, despite challenges due to regulatory uncertainties, persistent cost pressures and a lack of incentives to accelerate demand from potential consumers. The number of projects that have reached final investment decision has doubled in the past 12 months, which would increase today’s global production of low-emissions hydrogen fivefold by 2030. The total electrolyser capacity that has reached final investment decision now stands at 20 gigawatts (GW) globally. Global electrolyser manufacturing capacity doubled in 2023, with China accounting for 60% of this.
If all announced projects are realised worldwide, total production could reach almost 50 million tonnes a year by the end of this decade. However, this would require the hydrogen sector to grow at an unprecedented compound annual growth rate of over 90% between now and 2030.
Lack of clarity on government support, along with uncertainly around demand and regulatory frameworks means that installed capacity for electrolysers and low-emissions hydrogen volumes remain low, with most potential production still in planning or early-stage development, with some larger projects facing delays or cancellations due to these barriers along with permitting challenges or operational issues.
“The growth in new projects suggests strong investor interest in developing low-emissions hydrogen production, which could play a critical role in reducing emissions from industrial sectors such as steel, refining and chemicals,” said IEA executive director Fatih Birol. “But for these projects to be a success, low-emissions hydrogen producers need buyers. Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector.”
The report highlights a gap between government goals for production and demand, as well as technology and production cost pressures, with progress in electrolysers in particular stalling due to higher prices and tight supply chains. A continuation of cost reductions relies on technology development, as well as optimising deployment processes and moving to mass manufacturing to achieve economies of scale.
Unabated fossil fuels continue to dominate
Despite the growth in momentum, the report points out that low-emissions hydrogen accounted for less than 1% of total hydrogen production in 2023. Producing renewable hydrogen today is generally one-and-a-half to six times more costly than unabated fossil-based production, the IEA notes. It forecasts that hydrogen production is likely to continue to be largely dependent on unabated fossil fuels this year, with unabated natural gas accounting for around two-thirds of total production. The Middle East is a key player, producing 20% of all hydrogen from unabated natural gas.
China leads in terms of production, accounting for almost 30% of the global total, followed by the USA and Middle East with 14% each, and India with 9%. Total hydrogen production reached 97Mt in 2023, and could approach 100Mt by the end of 2024.
Industrial hubs – where low-emissions hydrogen could replace the existing large demand for hydrogen that is currently met by production from unabated fossil fuels – remain an important untapped opportunity by governments to stimulate demand, the IEA says.
The Middle East saw stronger growth in hydrogen demand than other regions (more than 6% growth year-on-year, due to an increase in demand in refining and methanol production). The region accounted for 14% of hydrogen use in 2023. The Middle East was the second largest consumer of hydrogen in industrial applications after China, with 4% growth, mainly driven by methanol production.