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Case study: Integrating Solar Energy in the Upstream Oil Supply Chain
(USOSC) of Abu Dhabi, UAE

Conference Paper · August 2015

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 ICONSETE
VIENNA 2015

August 25-28, 2015

VIENNA, AUSTRIA

PROCEEDINGS
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 Case study: Integrating Solar Energy in the Upstream Oil Supply Chain
(USOSC) of Abu Dhabi, UAE

Salah Abureden1, Syed Taqvi1, Ibrahim H. Mustafa1,2 , Ibrahim H. Alhajri3, Ali Alsahli3
and Ali Elkamel1
1
Chemical Engineering Department, University of Waterloo, Waterloo, ON, Canada
(E-mail: sttaqvi@uwaterloo.ca, aelkamel@uwaterloo.ca)
2
Biomedical Engineering Department, Helwan University, Cairo, Egypt
(E-mail: i2hassan@uwaterloo.ca)
3
Chemical Engineering Department, College of Technological Studies, PAAET, Kuwait
(E-mail: ih.alhajri@paaet.edu.kw, am.alsahli@paaet.edu.kw)

Corresponding Author’s e-mail: i2hassan@uwaterloo.ca

ABSTRACT

In the oil industry, a remarkable amount of energy is consumed during production.

Consumption takes place through a distributed combustion network of processes along the oil
supply chain spectrum. As a result, an increase in Greenhouse Gas (GHG) emissions as well
as hazardous wastewater is observed. The study aims at integrating an existing petroleum
operation in the upstream oil supply chain (USOSC) of oil production in Abu Dhabi with
renewable power generation systems. The focus of this research is to assess the impact of
energy demand such an integration would have on the efficiency of oil operations and
environment. This involves evaluating solar energy alternative for producing part of the
energy of requirements in the USOSC, looking upon Enhanced Oil Recovery (EOR)
operations. A wide spectrum of solar technologies have been analyzed in this paper and the
most appropriate one is selected. Nevertheless, the challenges for solar energy integration are
outlined.

Keywords: GHG; Oil Production; Renewable Energy; USOSC;

1. INTRODUCTION

The Oil and Gas (O&G) industry is an enormous industry that is responsible for fueling
several industries around the globe. Nevertheless, like other industries, it requires various
energy sources in order to run its daily operations. Electrical energy is one such source that is
consumed in tremendous amounts to drive several applications in the O&G industry such as
pumps, fans, compressors as well as power control systems, communication equipment and
lighting. Traditionally, power, required to facilitate these operations, came and is still fueled
from conventional sources (i.e. fossil fuel). However, using such sources has considerable
adverse effects on the environment, as a whole. Hence, there is a need to find alternative
‘green’ sources of energy that could help mitigate such problems.
The aim of this research is to integrate the upstream oil supply chain (USOSC) with
renewable energy. Additionally, to evaluate solar energy for producing part of energy

638
requirement of the oil production process. Greenhouse Gas (GHG) emissions and associated
flow rates in the USOSC would be analyzed. The possibility of replacing energy supply for
some non-critical operations would be considered, with a special focus on Enhanced Oil
Recovery (EOR). Different types of solar energy technologies would be studied with the most
appropriate technology being selected. Furthermore, challenges in implementing such
integration would be outlined. The significance of such a study would be providing an optimal
mix of energy generation while and sustaining target production.

2. ENERGY IN USOSC

2.1. Energy Consumption Sources

Upstream oil operations are energy intensive; the main sources of energy come from gas,
diesel and electricity supplied from the external network or onsite production facility
supported by emergency generators and uninterruptable power systems. The energy
consumption in oil operations can be summarized into the following groups:
 Hydrocarbon extraction equipment (drilling rig)
 Water injection pumps
 Gas compressors
 Heating the output stream for separation of the oil, gas and water
 Generating steam for enhanced oil recovery
 Gas re-injection for enhanced oil recovery
 Compressors and pumps for oil transportation
 Electricity generation turbines for oil processing and onsite residences

2.2. Greenhouse Gas (GHG) Emissions in USOSC

Greenhouse gases (GHG) refer to the gases in the atmosphere that absorb the long infrared
radiations and send it back to the earth’s surface, causing the Greenhouse gas effect. This has
led to several severe problems on individual health, climate change and on the environment,
as a whole.
Oil production and consumption are considered major sources for these emissions, majorly
CO2 and methane. Therefore, many countries have adopted certain policies and strict
regulations in order to control these emissions. Moreover, from exploration to transportation,
the CO2 emissions generated in USOSC is 20-30% of the total emissions [1]. These
emissions result from various sources that can be classified into five main groups [2,3]:
1. Combustion devices
a. Stationary devices (e.g. burners, flares)
b. Mobile devices (e.g. trucks, ships)
2. Point Sources: (e.g. stack, venting)
3. Non-Point Sources (e.g. Methane-fugitive emissions, water treatment processes, waste
handling)
4. Non-routine activities: (e.g. unplanned maintenance, urgent work due to emergency
needs)
5. Indirect emissions: this includes activities not directly happening inside the facilities
(e.g. outsource electricity)

639
The task of estimating the GHG emissions in USOSC is very challenging due to limited
availability of data and the high uncertainty in the calculation methodologies found in
literature. According to a study [1], only 50% of the collected data have meaningful
information that can be used to estimate GHG emissions. Hence, the initial approach was to
identify the list of equipment in each process and quantify the amount of GHG emissions
from every equipment. However, due to the lack of accurate data available to public; such
data is considered propriety information for oil companies and equipment OEM; the
quantification approach has been used in this study. Analytical assumptions have been made
and three calculation scenarios have been considered to check the variance in results in order
to evaluate the GHG emission in USOSC. For example, the calculation of CO 2, as major gas
among the GHG’s, is based on fuel combustion from different devices using the emission
factor for each device. Yet, there are several factors that affect these GHG calculations such
as the difference in the production technologies involved, the process flow associated, the
type of equipment and operating conditions considered [4].

3. SOLAR ENERGY IN USOSC

Renewable energy is the energy obtained from natural replenished sources like sun, wind,
ocean and geothermal. It has great potential that is sufficient to meet the global energy
requirement, if it can be utilized effectively. The International Energy Agency (IEA) reports
that renewable energy provided 16% of the total energy consumed globally in 2012 [5].
Among all other ‘green’ sources of energy, solar energy has been proven to be the most
technically potential source of energy [6]. Much research has been carried out on solar energy
during the last few decades. This is evident from its increase in electricity generation capacity
from 1.4 GW in year 2000 to more than 100 GW by the end of year 2012 [7]. In addition, cost
of photovoltaic (PV) system reduced from USD 16,000/kW in year 1992 to 6000/kW in year
2008 [8]. The reasons behind its promoted usage is its harmless nature as well as it being an
‘endless’ energy from a ‘free’ source. Solar energy has been commonly used in applications
related to heating, electricity generation and transportation. However, recently, various
petroleum companies have employed different solar technologies in USOSC in order to
reduce the dependence on conventional sources for production.
Solar energy technologies can be divided into three linked chains [6]:
1. Active and passive
2. Photovoltaic and thermal
3. Concentrated and non-concentrated
The technology of photovoltaic (PV) is based on conversion of energy from collected
radiations to electrical energy. Solar thermal technology utilizes the collected heat either for
heating purposes or to generate electricity, which can be classified as (a) non-electric solar
thermal and (ii) electric solar thermal, respectively. Electric solar thermal energy is best
utilized using concentrated solar power (CSP) technology which can be carried out using
parabolic troughs, Fresnel mirrors, power towers and solar dish collectors [9].

3.1. Solar energy economics

The competition level between solar energy and conventional energies differs from one solar
technology to another, based on the technology type and the application. Many studies used a
common principle to compare the cost of electricity generation from renewable and
conventional sources, called “levelized” cost of energy (LCOE) method. It is represented by
the following equation [6]:

640
OC: investment cost, also called ‘overnight construction cost’, not considering the interest
rate payment during the plant construction
CF: capacity factor
CRF: capital recovery factor, which is the ratio of the fixed payment “annuity” to the
present discounted value
FC: series of annualized fuel costs
T: predicted productive life of the power plant
r: discount rate or interest rate
This method is useful at the time of calculations when all variables are fixed. It needs to be
updated with time to take the changes in energy cost into consideration, such as the cost
reduction in solar technologies due to continuous technological improvements, changes in oil
prices in addition to changes in capital cost which plays major role in the competitiveness of
solar energy. This method is used, in this research, to give an indication about the difference
in competitiveness between solar energy and conventional energy sources at present time.
Data was collected from various sources and the following table was produced in order to
compare the different renewable energy source technology economically.

Table 1. Economics Analysis of Different Technologies

OC Plant life
Technology CF (%) LCOE
(US$/kW) (years)
Lower 3252 20 20 173
Photovoltaic
Upper 8341 20 20 705
Lower 4912 20 30 325
Solar CSP
Upper 6554 20 25 176
Lower 1382 20 25 75
Wind
Upper 4199 20 25 220
Lower 608 25 80 65
Gas CC
Upper 2950 25 80 150
Lower 2212 35 80 42
Coal
Upper 2869 35 80 89
Lower 855 75 30 30
Hydro
Upper 3901 25 30 102
Lower 4033 35 80 81
IGCC
Upper 7083 35 80 159
Nuclear Lower 3830 50 25 77
Upper 9464 25 90 144

As seen from the table above, the cost of solar energy for electricity generation is higher
than conventional energy except for IGCC despite the significant improvements of solar
technologies in the last ten years. However, the LCOE for solar PV technology based on
lower OC value is US$ 173 per MWh and USD 176 for CSP based on lower OC value which
is much higher than LCOE for coal with CCS (i.e. US$ 42 per MWh).

641
 Although LCOE is a major factor in assessing the financial viability of any solar project,
other cost factors can also be considered in the overall cost calculations of solar energy
competitiveness when compared to energy provided by conventional sources. Other costs
include the cost of environmental harm caused by solar energy as compared to those caused
by of conventional sources. However, it is a very complex process to calculate the actual cost
of the environment damage. Nevertheless, the question that needs further investigation to find
the accurate cost comparison between clean and conventional technologies is directly related
the options that humanity will have in 100 years from now, if the oil era halts. This would add
another important dimension to the cost comparison equation; what is the cost that humanity
is willing to pay to keep prosperity development by investing in sustainable and clean sources
of power.

3.2. Solar energy integration into existing USOSC operations

Solar energy may be integrated into existing oil production operations in order to
maximize or maintain same operation efficiency while reducing costs and emissions and
overcoming. The areas of integration in the USOSC may include: (1) electricity generation,
(2) heat supply and (3) steam production. Moreover, three shapes of solar energy sources can
be used to provide power in USOSC: (a) standalone system, (b) hybrid system and (c) grid
connection. The possible applications of solar energy integration in USOSC are listed in the
table below.
Although telecommunication devices are very crucial in USOSC operations, the amount of
electrical power needed to run this equipment is relatively small. Solar energy can be an
effective source to generate electricity to feed the telecommunication equipment with power
using either PV stand-alone systems or electricity generated through solar generated steam
turbines. RTU’s and SCADA systems can also be supported by a similar method, integrated
with a direct source that can provide required power during radiation peak times or from
storage system during night. Corrosion is a major problem for most companies and a lot of
money is spent on controlling corrosion or costs that arise from corrosion problems.
Moreover, powering remote sites with electricity from conventional sources might be difficult
and expensive. Thus, powering cathodic protection systems with electricity generated by
stand-alone PV solar system supported by storage capacity can be very good solution to
optimize the energy usage mix in remote locations.

Table 2. Possible Solar Applications in USOSC

Application Solar Area Application Solar Area
Enhanced Oil Recovery (EOR) Steam generation Drilling meters Electricity
Remote Terminal Units (RTU) Electricity Cathodic protection Electricity
Telecommunication Electricity Process control Electricity
Supervisory control and data
Electricity Lighting Electricity
acquisition (SCADA) system
Flow measurement Electricity Water heaters Heat Supply

In the last few years, a number of projects were successfully introduced to the USOSC
operations to generate steam from solar power. Reflection mirrors are used to concentrate
sunlight to heat water inside circulation pipes until steam phase at high pressure, or using heat
transfer fluid followed by heat exchanger and steam booster to generate steam. This steam is,
then, directed to the injection well for enhanced oil recovery operations.

642
4. CASE STUDY

A case study was carried out to propose a solar technology to be integrated in the USOSC to
feed production areas with high levels of GHG emissions, simultaneously, consuming large
amounts of energy. However, as seen in the previous sections, number of factors makes such
proposal a complex process, including the following:
1. Estimating energy requirements for each process, equipment or group of equipment is
a complex task that includes many variables that affects the amount of energy
consumed.
2. Accuracy of the GHG emissions estimate varies from one methodology to another
where variance can reach up to 30%.
3. Selection of solar energy depends on the type of application in the USOSC process,
size and availability of land, radiation intensity and many other factors.
The above points make the matrix of energy requirements, greenhouse emission and solar
technology complex to be analyzed unless assumptions are made.

4.1. Operation matrix

Initially, two set of questions will be investigated to simplify the options matrix.
Set One:
- Which operation to consider in the USOSC?
- Which solar technology to use: PV or CSP?
- When solar technology is selected, what specific type of solar technology to use?
- Location?
- What is the level of investment needed; small or large?
Set Two:
- What is the assumed oil production capacity?
- What is the solar system capacity? (multiple scenarios can be studied)
- What methodology will be used to calculate GHG?
- What is the CO2 credit value?
- What are the other assumptions that might be needed?
Using the above set of questions, the following options matrix has been designed.

643
 Table 3. Options matrix:

Option
1 2 3 4
Unit
Process EOR Drilling Transport
Operation
USOSC
Electricity Small systems
Application Steam gen
gen (i.e RTU/ telecommunication)
CSP Trough
Large scale
Technology CSP Tower Stand-alone PV system
PV
CSP Dish
Solar
Storage
No storage 1-3 4-6 More than 6
(hours)
Cooling Dry cooling Water cooling
Middle East-
High
Gulf North Africa Australia South America
radiations
Location countries
Medium- Other middle North America-
India China
High east countries west coast
Capacity
Oil Prod. 0.5 MM 1 MM 2 MM Others
tons/year
Capacity
20 50 100 Others
(MW)
Conversion
Power Low Med Med-High
Efficiency
Grid
Predictable Not Predictable
Connection
Land km2 Less than 2 2-5 More than 2
CAPEX Low Med High
O&M Low Med High
ROI Low Med High
Finance
Payback
Short Long
period
LCOE Low-Med Med-High

644
 A financial comparison between the types of CSP was also made that includes capital cost,
O&M costs and LCOE. The following figures show a financial comparison between the types
of CSP.

Figure 1 Capital cost comparison for different CSP technologies

Figure 2. Operations and maintenance (O&M) cost comparison for different CSP
technologies

As seen from Figure 2, most of the O&M costs are fixed which minimizes the differences in
financial comparison. For LCOE analysis, values for CSP technologies range from 140
US$/MWh to 360 US$/MWh. Typically, the LCOE for a CSP tower could range from 160
US$/MWh to 270 US$/MWh [13] whereas, the LCOE for CSP parabolic trough ranges are
from 140 US$/MWh to 300 US$/MWh [11]. Based on the above analyses, CSP parabolic
trough is selected in this study.

4.2. Assumptions

With all factors determined for the type of technology and the location of study, the following
assumptions have been made to facilitate calculations of GHG emissions:
(1) Oil production capacity is 2 million tons of oil and gas per year
(2) Three scenarios can be used to calculate the GHG emissions
(3) Number of equipment emitting GHG by leaking is only, as listed in Table 7
(4) Indirect GHG emissions are not considered (outsourced electricity or construction)
(5) CO2 credit value is 15 US$/ton CO2
(6) Carbon content in combustion fuel is 87%
(7) Gas and diesel are the only types of fuels used in USOSC operations
(8) USOSC operations consumes 85,000 tons of gas per year used for different purposes
including power and steam generation
(9) USOSC operations consumes 300 tons of diesel for different purposes, including trucks
and small device operations
645
 (10) Annual flared gas quantity in USOSC is 50,000 tons
(11) Oil is transported by land
(12) 1,200 tons of fuel is used every year for land transportation
(13) Fixed roof is used in storage tanks
(14) Operating conditions for all the equipment are unchanged
(15) The capacity of the CSP solar plant is 120 MW
(16) 60,000 tons diesel/year is needed when the 120 MW solar power plant is operated by
diesel
(17) CSP plant investment increases by 10 % when dry air cooling is used
(18) 250 million gallons of water will be needed if water cooling system is used in CSP
plant
(19) In EOR, the ratio of steam to recovered water is 5:1
(20) The efficiency of the steam turbine in EOR operation is 85% [12]
(21) 2,000 tons/year equivalent to 100,000 Mcf (based on natural gas density = 0.7 kg/m3)
(22) Price of natural gas is 4.0 US$/Mcf

Table 7. Number of Leaking Sources

Equipment Connections Valves Rotating shafts and pressure relief valves

Separator 324 122 18
Scrubber 337 135 24
Heat Exchanger 132 30 15
Compressor-single 228 75 42
Pump-Centrifugal 109 41 11
Refrigerator unit 675 225 90
Drier-Molecular 270 90 60
Turbo Expander 60 15 30
Amino system 300 105 38
Glycol Unit 225 75 30

646
Table 8. Assumed Sources of GHG Emissions

Source Equipment
boilers/steam generators, dehydrator re-boilers,
heaters/treaters, turbine electric generators, internal
combustion (IC) engine generators,
Stationary
fire pumps, reciprocating compressor drivers,
Combustion
turbine/centrifugal compressors, well driller, flares,
incinerators
mobile drilling equipment, other company vehicles, site
Mobile
preparation, construction and excavation
dehydration processes, dehydrator pumps, gas sweetening
Process
processes
tanks, drilling operations and well testing, injection pumps
Other
and gas test devies
mud degassing, well casing,
Vented
Maintenance/ compressor blow downs, compressor starts, vessel
scheduled blowdown, collection pipeline blowdowns, well discharge
operations
emergency shutdown (ESD)/ emergency safety blowdown
Nonroutine
(ESB), pressure relief valves (PRV), fire suppression
Indirect electricity imports, process heat/steam imports, cogeneration
equipment component leaks, wastewater treatment, air
Fugitive
conditioning

4.3. Summary

The following table summarizes the results of integrating the proposed CSP parabolic
trough technology with the USOSC in Abu Dhabi.

647
Table 14. Summary of Results

Area Result
Production capacity 2 MM tons/year oil and gas
Location Abu Dhabi, United Arab Emirates (UAE)
CSP trough for steam generation
Solar technology Options: heat transfer fluid, heat storage, direct steam
generation, heat exchanger
Capacity (if electricity) 120 MW
Steam Turbine
Applications Enhanced Oil Recovery (excess steam from EOR can go to
steam turbines for electricity generation)
Electricity generation: (192,000) tons/year if full capacity used
CO2 reduction EOR : (11, 678.5- 18, 700) ton CO2/year
Season and storage affect the results
Gas reduction (25-80) % based on season and storage capacity
Water reduction Air dry cooling saves 250 million gallons of water every year
Electricity Generation: 2.8 million US$/year
Financial advantages
EOR: (300,000-600,000) US$/year
Connection to Grid Viable option- Policy/regulations needed
Challenges Components Quality/Land

5. CONCLUSION

In this study, the feasibility of integration of the upstream oil supply chain (USOSC) with
renewable energy was presented. Solar energy is found to be the best source of renewable
energy to be integrated into oil and gas industry. Hence, different types of solar energy
technologies were studied. In addition, solar energy was evaluated for producing part of
energy requirement of the oil production process. Challenges in implementing such
integration were outlined. Case study was carried out with focus on Abu Dhabi, the capital of
the United Arab Emirates, to demonstrate the application of this study. From this study, it is
observed that integration of solar energy into oil and gas upstream operations is technically
possible. CSP trough technology supported by good storage system is a good example of solar
integration into USOSC operations for steam generation purposes. Steam EOR and electricity
generation using steam turbines are suitable applications for solar energy integration USOSC
operations are energy intensive and generate significant amounts of GHG. The Greenhouse
Gas (GHG) emissions and associated flow rates in the USOSC were analyzed. Significant
amounts of CO2 emissions, gas combustion and cooling water can be saved through this type
of solar energy integration. Solar integration has financial advantages on the oil operations
and can extend the life of the oil reservoir. Number of challenges facing solar energy
integration needs to be addressed including technical, economical and institutional
considerations.

648
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