‘Waste’ gas associated with oil production at one location in Ecuador is now used in two gas-diesel engines to generate power on-site to pump and process the crude oil. The project illustrates how on-site use of ‘waste’ gas – which would otherwise be flared off – can open up economic opportunities for oil and gas field operators. Harry Lindroos writes.

With the government of Ecuador looking to prohibit the flaring of gas, state-owned oil company Petroproducción S.A., a subsidiary of PetroEcuador, soon looked at the potential for generating power from this otherwise wasted fuel. In 2001 a contract with Petroproducción was signed to increase oil production in the Atacapi-Parahuacu oilfields near Secoya in north-east Ecuador. The same year it issued a tender for a dual-fuel power plant as part of its project. With no electrical grid available, the electricity thus generated is used to extract oil from the ground, process it and send it to the main transport pipeline.

The Secoya power generation project makes use of flare gas from the oil drilling process deep in the rainforest of north-east Ecuador
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The main requirement of the Secoya project was to develop a power generation facility that could optimize the use of the available associated gas at zero opportunity cost. The back-up fuel would be the next lowest opportunity cost fuel – in this case, either heavy fuel oil or crude oil.

There were also two other requirements. There had to be automatic and seamless transfer from gas to liquid fuel in the event of a gas trip. Additionally, they needed a system that would automatically compensate for gas quantity and quality using liquid fuel, without sacrificing either efficiency or output, and with a maximum heat rate of 8500 Btu/kWh at the site when operating on both associated gas and crude oil.

Hearing of this need, engine manufacturer and power plant provider Wärtsilä saw an opportunity. The company was already local to the area and had built up a good reputation, having supplied engines for the OCP Transandean pipeline project. Although the company had no references for running its engine on flare gas, it did have references for its gas-diesel (GD) engine, which is designed to run on both gas and liquid fuel.

Wärtsilä’s Sales Director Kent Westergård explained: ‘We have a concept that can burn low calorific value gas while generating a reasonable power output. Even if gas supply is limited, you can always top up with other fuels such as crude oil. The technology is especially suited to small, marginal oilfields. We explained to the customer that they could burn the associated gas in our engines and thus generate electricity free of fuel costs. It does not matter if the composition of the gas changes.’

The power plant is equipped with two 11 MW Wärtsilä 32GD engines capable of running on gas and liquid fuels
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Given Petroproducción’s requirements, the only option did in fact turn out to be the GD engine. Wärtsilä had worked with the customer for about one year before signing the contract in August 2002. Under the contract, Wärtsilä delivered two 5.5 MW gas-diesel engines for what would be the first ‘fuel sharing’ power plant project in the world utilizing Wärtsilä 32GD fuel sharing engines.

Making it happen

The Secoya project is located in a remote part of north-east Ecuador. This presented challenges for transporting the engines to the rainforest location. The engines arrived at a harbour in the town of Esmeraldas in August 2003. They were then taken by road across the 4200-metre-high Andes mountains and down into the rainforest via roads and bridges. The torturous route took about one month.

Operation of the plant must take into account the environmental impacts on the sensitive rainforest location
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With the project being in the rainforest, environmental considerations were important. Wärtsilä had to prepare studies and carry out the erection in a way that limited the environmental impacts. Gustavo Fierro, Operations & Management Regional Director of Wärtsilä Ecuador, explained: ‘We had to design and erect the project to avoid soil and water contamination.’

Waste is produced as a result of any erection and operation of this type. Removing waste from such a remote installation can be a challenge. The waste disposal issue is complicated by the fact that the project is in a very wet area, where in the rainy season it will rain as much as four times a day. ‘Creeks, which are not present in the summer, will appear in the rainy season. This water will travel to the smaller and then the large rivers. You have to understand the environment and know how the water will flow when the rain comes. The humidity and moisture can cause disease,’ said Fierro.

Wärtsilä also had to be sensitive to the lifestyle of the local inhabitants. Fierro continued: ‘We had to consider the noise issue. The rainforest is inhabited by communities who depend on hunting small animals to survive. If there is a lot of noise, as will normally be produced by such a facility, the animals will move away. It is important for the people taking care of erection to understand the situation and the culture and values of the community that they could affect.’

Due to the project’s location, it was also difficult to find personnel to work on the project. This pushed up the cost of personnel compared to normal projects.

Time and experience

The bid for the project was opened in 1999 and Wärtsilä carried out the technical inspection evaluation in 2000. The offers were presented that same year. Wärtsilä signed the contract in August 2002 and preparations began straight away. Fierro commented: ‘When we sell an engine or power plant, the power plant department appoints a team which is responsible for commissioning and erection. When there is an operation and maintenance agreement, as is the case for this project, we usually start work six months before to have other resources ready for the operation and maintenance of the facility. What this means is that we have two teams working in parallel – a team taking care of erection and a team that is at the same time training the people that will commission and operate the plant as soon as the erection team finishes.’

Typical erection time for this type of plant is 6-8 months. Erection began in September 2003 and the commissioning and hand-over took place in March 2004.

Experience with the engines has been satisfactory, although there were the teething problems that might be expected with any new technology. ‘In the beginning there were difficulties with the gas system,’ said Fierro.

The fact that associated gas at the well-head varies constantly in terms of both quantity and quality was a challenge. The flare gas from the oilfield contains a significant amount of condensate which has to be removed before it is burned in the engines. Initially the operator faced problems with the high water content in the gas and condensate formation in the 900-metre-long supply line.

These were solved by installing a water separator and a gas heater to remove the water droplets and to raise the gas temperature above the dew point, prior to the gas compressor inlet. There is also 40%-50% CO2 in the gas but this is not removed and passes through the engine. There is no sulphur in the flare gas.

Since the engines began commercial operation in March 2004, each engine has now achieved around 22,000 running hours. ‘The customer originally planned to run the engines more on gas as opposed to crude. Problems in the beginning meant they had to run on crude initially but now they run on gas as expected,’ said Fierro.

Overall plant availability over the past year has been around 94.8% and the reliability 98.9%. This is acceptable given that Secoya is running without a spare engine and power is continuously required from both generating sets.

Calculated total fuel savings are expected to be significant over a 10-year period (see Figure 1). The plant is expected to save nearly US$100 million compared to operation on imported diesel oil, assuming associated gas is always available.

Figure 1. Fuel savings at Secoya power plant total over US$9 million per year
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But the economic benefit is not the most valuable message that Wärtsilä wants to pass on after the Secoya experience. Fierro recalled: ‘The lesson we learned is that in this case it is not enough to focus on the technical and economical aspects. You have to focus on the relationships from a political point of view and learn to work with different types of communities.’

From a technical standpoint, the project will provide valuable experience. ‘We didn’t have anyone in Latin America with experience in this technology. But now we do,’ said Fierro. The project has helped Wärtsilä to gather experience with such an application and it is now ready to grasp new challenges in the process of reducing flaring.

This will be important for any future projects. There is talk of an additional 11 MW with the addition of another two engines. There are still some old small diesel engines and turbines at the oilfield that provide power. With often more flare gas available than is used by the Wärtsilä GD engines, the hope is that these old, small engines will be replaced by new engines running on associated gas.

Although the majority of Ecuador’s electricity production comes from hydro, notably most of its conventional thermal generation comes from diesel engines supplied by imports and domestic refineries. With the success of the Secoya project, and the government’s desire to reduce flaring, the future is bright for other power projects of this type in Ecuador.

Harry Lindroos is Director of Oil and Gas Industry applications at Wärtsilä Power Plants.
e-mail: harry.lindroos@wartsila.com