Spe Workshop: Brownfield Optimisation and Marginal Asset Development

SPE WORKSHOP:
Brownfield Optimisation
and Marginal Asset
Development
28 – 29 AUGUST 2018
DoubleTree by Hilton Kuala Lumpur, Malaysia
SPE WORKSHOP:
Brownfield Optimisation and Marginal Asset
Development
Field IGA and RGA: Case Studies on Brownfield Optimization and

Marginal Asset Development
Primaresa Utama
Siti Sitawati
Background
Case Studies:
• Field IGA has potential to obtain additional reserve recovery by
installing compressor to lower wellhead pressure. Project initially
was considered not feasible due to high cost associated with
installing new compression system
• Field RGA (high CO2) development was initially postponed due to
unfavourable economic feasibility despite the availability of
infrastructure and potential gas market nearby
3
Field IGA – Monetising Tail Gas
• Compressor is required to lower field IGA wellhead pressure to
access additional gas reserve (originally operated at 1100 psig)
• Initial cost estimation of the project is ± USD 14 million with new or
used compressor considered through purchase or lease contract
• Company considered the project is not feasible to commence
Challenge: How can we reduce project cost?
4
Reducing Project Cost
• Look for idle compressor unit in other Operator
• Optimising facility design
• Reducing compressor EPC installation cost
5
Idle Compressor from Other Operator
• Company located idle compressor from other operator still in good
condition, and able to obtain permission to relocate unit
• Unit is located in Kalimantan Island
• Compressor recondition, control system upgrade, transport etc. cost
less than 1/3 of new unit – contributed significantly to reduce
project cost
6
Compressor Relocation
7
Compressor Recondition
8
Gas Turbine Recondition
9
Optimising Design
• IGA Process Plant designed with Duplex piping material due to HPHT
and sour nature of the gas produced by IGA field
• Considering lower operating pressure (300 psig) and inlet
temperature, material selection study conducted by Company
revealed that less exotic material (SS316L) is adequate for new
compressor system
10
Reducing EPC Installation Cost
• Brownfield projects interfaces with existing facilities
• Utilizing in-house engineering team, Company prepared “ready to
construct” engineering design package, allowing contractors to have
less uncertainty in preparing cost proposal
• These efforts shall minimize design uncertainty on the Contractor
side – and in turn it shall lower the construction cost
11
IGA Project – Summary
• Efforts by Company leads to total cost saving of ± USD 8 million (57%
cost reduction)
• Project is currently on construction phase
Case Study 2 – RGA Field Development
• RGA gas has high CO2 content (60% mole), and field is located inside
industrial forest and local community palm oil plantation - leads to
challenge and issues related with land acquisition
• Opportunity to develop RGA fields:
• Nearby infrastructures (pipelines, gathering stations, compression facilities,
etc.)
• “Traditional” gas buyers – “plug and play” gas sales
• Development was initially postponed due to unfavourable economic
feasibility
Challenge: How can we make the project feasible?
13
Improving Field Development Feasibility
• Minimizing land acquisition requirement
• Utilizing nearby Company facilities
• Reduce processing facility project cost
14
Minimizing Land Acquisition
• Company put efforts to minimize land acquisition:
• Locate wells in one pad so that their flow lines can be commingled
• Increasing flow line & pipeline design factors as per regulation
• Reduction in land acquisition:
• For well pad: two 100 x 100 m (50%)
• For pipeline: 12 m (18 m to 6 m) by 10 KM (35%)
15
Utilizing Nearby Infrastructure
• RGA field has nearby infrastructures:
• Compression facility in nearby field station (KEG)
• Pipeline to gas sales point
• After CO2 removal, gas from RGA will enter compression facility in
KEG Station
• Combined gas from RGA and KEG will be delivered to main gas
gathering station into sales point
• Combined liquid transfer into KEG liquid pipeline to existing liquid
processing station
16
Processing Facilities: Lease basis
• Company opted for BOO (build-own-operate) contract to construct
processing facilities for RGA field:
• Company specifies inlet gas properties and outlet gas specification
• Contractor shall follow international codes and standard (API, BS, ASME,
ANSI, IEC, NFPA, etc.)
• Contractor shall be required to operate the processing facilities
• Contractor may re-use common equipment (generators,
compressors, portable tanks, etc.), in turn leads to lower facility cost
• Contractors also have better completion schedule
17
RGA Project – Summary
• Efforts by Company leads project initially having negative NPV into
positive NPV
• Project is currently on preparation phase
Lesson Learn – Similar Experience?
• Utilizing idle equipment as much as possible – major cost saving
• Optimizing design and maximizing Company in-house resources –
design what is needed, fit-for-purpose
• Understanding and complying with local regulation – possible cost
saving by just following regulation
• Engage and think as Contractor – how to minimize cost and still
comply with industrial standard?
19
SPE WORKSHOP:
Brownfield Optimisation and Marginal Asset
Development
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SPE WORKSHOP:

Field IGA and RGA: Case Studies on Brownfield Optimization and

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