Natural gas utilization and flaring reduction in Brazil Petrobras Experience

1
Natural gas utilization and flaring reduction in
BrazilPetrobras Experience

• Carlos Augusto ARENTZ PEREIRA
• Petrobras - GE/Energy Efficiency

Denis Krambeck Dinelli Petrobras - EP/Gas
Production Planning
2
Agenda

• Natural Gas Consumption
• Gas Production Scenario and Forecast
• Energy Conservation Program
• Gas Recovery
• Gas Flaring Reduction Initiatives
• Opportunities
• Conclusions

3
Facts about natural gas usage in Brazil

• Natural gas
• Source with greatest increasing rates on
  brazilian matrix
• Participation more than doubled in last 8 years
• From 3.7 (1998) to 9.3 (2005)
• It has been displacing many oil products.

4
Brazilian Energy Matrix 2005
NATURAL GAS
9
COAL AND
PRODUCTS
CRUDE OIL AND PRODUCTS
6
URANIUM
39
1
HYDROPOWER
15
SUGAR CANE AND
PRODUCTS
WOOD AND CHARCOAL
14
13
OTHER RENEWABLES
3
5
Brazilian Energy Consumption
OTHER RENEWABLES
100
SUGAR CANE AND
PRODUCTS
80
WOOD AND CHARCOAL
URANIUM
60
HYDROPOWER
NATURAL GAS
COAL AND PRODUCTS
40
CRUDE OIL AND
20
PRODUCTS
0
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
6
Natural gas production evolution in Brazil
(million m3/d)
50
7.3 p.y.
45
NON ASSOCIATED
10.9
11.3
ASSOCIATED
10.9
40
9.4
10.4
35
7.8
6.3
30
7
7.8
25
8
7.5
20
6.1
37.3
5.3
36.7
4
34.9
33.3
32.8
30.4
30.1
15
25.5
21.7
10
18.9
17.7
16.3
16.1
15.8
5
0
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
7
Petrobras in numbers
16 Refineries with a capacity of 2,125 millions
bpd
proven reserves 11.8 billions of boe (SEC
2005)
oil and gas production 2,20 million
boe/day (SEC 2005)
Pipelines 30.318 km
6,933 gas stations in Brazil (34 retail
market)
Refining, Transportation, Trading
50 vessels fleet
EP
Gross Revenue US 41.2 billions
746 gas stations in Argentina 105 gas stations
in Bolivia
Petrochemicals
Retailing
25 of retail market in Bolivia and 14 in
Argentina
ethylene production 2,4 millions ton/year
Natural Gas
gas sales 52 million m3/day 9 thermopower
stations 3,2 GW
Brazil and abroad
8
Consequences of natural gas usage at Petrobras

• For many years Petrobras was the single biggest
  NG consumer
• Up to 58 of whole country consumption in 1990
• Became major energy source for Petrobras
• Displaced mainly fuel oils specially on
  refineries
• This required major adaptation on furnaces and
  boilers
• Market development has increased in last 10
  years
• Petrobras consumption was in 2005 only 30.
• Natural gas source promoted
• Reducing emission on specific pollutants like
  sulphur oxides and particulates
• Reducing GHG emissions per energy equivalent
  consumption
• Cogeneration projects
• All these enhanced gas flaring reduction projects.

9
Fuel consumption Matrix Petrobras - 2005
REFINERY GAS
NATURAL GAS
17
46
RESIDUAL GAS
1
CAT CRACKING
COKE
14
FUEL OIL
18
OTHER
DIESEL
1
3
10
Fuels consumption at Petrobras (tPE/year)
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
FUEL OIL
DIESEL
NATURAL GAS
REFINERY GAS
RESIDUAL GAS
CAT CRACKING COKE
OTHER
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Energy conservation program

• Petrobras has an Energy Conservation Program
  since 1974
• PETROBRAS Energy Consumption in Brazil
• aprox. 242,000 bpd
• From 1992 to 2005 this program allowed
• savings of 2,800 bpd oil equivalent
• Fuel oil, diesel, refinery gas, cat cracking
  coke, natural gas
• It has been reducing internal consumption by 1
  per year
• Results at least US 220 million - Return rate
  of 30 per year
• equals 1.5 million tPE and 5 million t CO2
  emissions avoided
• Results equal one year results of a 170,000 bpd
  refinery
• Helped company achieve Dow Jones Sustainability
  Index

12
Case Gas flaring utilization

• Gas flaring used to generate power at Sergipe
  since 2002
• Due to distance from market gas was flared at one
  production field Atalaia 36,500 m³/d
• Electrical Power purchased from local
  distributing company
• Opportunity to generate and replace purchased
  power
• Gas turbine 5.2 MW supplied whole site demand
• Investment US 2.5 million
• NPV US 3.3 million - rate of return 41 per year
• Reduced average energy production cost
• Avoided flaring
• Promoted better energy efficiency in whole site
• Improvements ahead

13
Increase on Energy EfficiencyPetrobras - Brasil
14
Dow Jones Sustainability Index
On this evaluation at Environmental Dimension
Eco-efficiency criteria Petrobras has achieved
100, best result on peer group. Acknowledgement
to our efforts on Energy Conservation.
15
Petrobras overview of domestic EP

• Reserves (at December 31, 2005)
• Proven reserves of 13.23 billion boe (SPE)
• or 10.58 billion boe (SEC)
• Reserve / Production Ratio of 19.7 years (SPE)
  and 15.7 (SEC)
• Internal Reserve Replacement of 131.1 (SPE) and
  101.3 (SEC)
• Production (2005)
• 1,958 thousand boed (1,684 thousand bpd oil)
• 5-year CAGR of 5.6
• FD Cost
• US 3.45/boe (2003 2005) SPE
• Lifting Cost
• US 5.73/boe (2005)
• Exploratory Area (Nov/2005)
• 157.7 thousand km2 (Petrobras Partners)
• 153.4 thousand km2 (other Companies)
• Total 311.1 thousand km2

16
Natural gas utilization in Brazil 2006Till
september
17
Associated gas production and flaring in Brazil
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Associated gas utilization index

• Measures the percentage of the associated gas
  produced that's sold or utilized in Petrobras
  EP internal processes.
• IUGA Associated Gas Utilized
• Associated Gas Produced
• (Associated Gas Produced Flaring
  and Venting)
• Associated Gas Produced

19
Associated gas utilization evolution in
Brazil(Million m3/d)
20
Associated gas utilization evolution CAMPOS
BASIN (Million m3/d)
21
Gas recovery initiatives

• From 1992 to 1997 many projects promoted gas
  flaring reduction
• Close to 1 million m3/d of gas flaring avoided
• A series of studies were developed in parallel
  aiming at flaring reduction, analyzing main gas
  flaring causes
• At the same time, legislation over flaring
  avoidance became stricter
• The best options for flaring reduction were
  united in an Action Plan in 2001 Campos Basins
  Gas Utilization Optimization Program - POAG

22
Campos basins gas utilization optimization
program (POAG)

• POAG consisted 93 actions determined to improve
  associated gas utilization in 24 platforms like
• installation and revamp of compressors
• new gas pipelines
• optimization of the processing plants
• Potential gain in gas utilization of 4.2 million
  m3/d
• Total investment of approximately US 200 million
• 91 actions concluded the remaining two will be
  concluded until feb/07, providing a gas
  utilization improvement of 0.7 million m3/d

23
Campos basins gas utilization optimization
program (POAG)

• Besides POAG, US 98 million have been invested
  in two gas injection projects
• up to 2.4 million m3/d of the associated gas can
  be stored in case of processing, transporting or
  marketing problems onshore
• Petrobras also invested in workforces training
  and qualification, in a partnerships with ANP
  Brazilian Petroleum Agency - and the Federal
  Technological Center through courses and forums
  on best operational practices

24
Petrobras air emissions management system(SIGEA)
25
Petrobras air emissions management system(SIGEA)
EP sources
26
Petrobras air emissions management system(SIGEA)
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Whats the forecast for gas flaring in Brazil?
28
Associated gas utilization evolution in
Brazil(Million m3/d)
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Ghg cumulative emissions Forecast
GHG emitions in EP activities (t)
30.000.000
25.000.000
20.000.000
15.000.000
10.000.000
5.000.000
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
EP Total
GHG emissions avoided
30
Further improvement in gas utilizationOpportunit
ies under evaluation

• All new projects are designed with better energy
  efficiency concepts and enhanced gas recovery
• challenges are related specially to logistics
  scattered production and farther from seashore
• Additional reductions on gas flaring beyond those
  achieved with POAG come up against technical and
  economical challenges
• Two opportunities are currently under study in
  Petrobras Research Center (CENPES)
• Compressed Natural Gas (CNG)
• Liquefied Natural Gas (LNG).

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Conclusions

• Since the 1990s Petrobras has been promoting
  significant gas flaring reduction based on energy
  conservatio
• Tangible improvement in associated gas
  utilization between 1999 and 2004 (75.7 x
  88.7), due mainly to the investment made in
  Campos Basin aiming gas flaring reduction (POAG)
• Up to 2005 Petrobras has been avoiding at least 5
  million m3/d natural gas flaring daily from 1993
• On the long-term, stabilization of associated gas
  utilization around 91
• Petrobras is still searching for better and
  improved means of raising its production
  altogether with minimum gas flaring

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Challenge is Our Energy Keep the challenge Make
energy last Use the right amount
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THANK YOU
Carlos Augusto Arentz Pereira Petrobras -
GE/Energy Efficiency caarentz_at_petrobras.com.br
Denis Krambeck Dinelli Petrobras - EP/Gas
Production Planning dkdinelli_at_petrobras.com.br