Triple Energy Partnership

On May 18 Khanty-Mansiysk hosted a series of large-scale festive events devoted to the start-up of associated petroleum gas (AGP) processing complex at the Salym group of oil fields. This unique project of rational use of APG is realized by three companies – Salym Petroleum Development (SPD), Monolit and RussNeft.

Priority Task

Associated petroleum gas uti­lization is one of the top-priority tasks in the oil industry. This gas is valuable hydrocarbon resource produced along with oil but in the course of separation it is tradition­ally discharged to flares and flared. According to the Ministry of Natural Resources and Ecology of the Rus­sian Federation the country annu­ally produced 55 bln m3 of APG, and only quarter of it is processed. Over one third of this gas is flared, and according to estimates of the World Bank, it is $40-80 mln of lost profit.

Rational use of APG is essen­tial part of efficient energy policy, and at once it is also important in­dicator of industrial development level of the country. It is an impor­tant step in building reliable ener­gy future. “Utilisation of the valu­able hydrocarbon resources rather than flaring is an absolute must and has been long overdue, not only in the region of Yugra or Russia, but globally’’, tells SPD Commissioning Operations Engineer Watze Tigche­laar. APG is resource for the power and chemical industry. Caoutchouc, plastics, aromatic hydrocarbons, high-octane additives and liquefied propane and butane – everything of this is produced by processing asso­ciated petroleum gas.

Flaring is not only millions ru­bles of lost profits, it is also emis­sions in the air. Only in Russia almost 100 mln tons of CO2 are dis­charged to the atmosphere. APG flaring results in emissions of car­bon dioxide and active soot. Be­sides, methane, which is a much more active greenhouse gas in com­parison with the carbon dioxide, is emitted into the atmosphere.

Flares can be switched off, and the gas can be supplied to liquefied petroleum gas (LPG) plant. Such project was realized at Salym group of oilfields. This project is a result of unprecedented mutual partnership between Yugra regional government and three private companies: SPD, Monolit, and Russneft. The opening ceremony of LPG plant was held on May 18 in Khanty-Mansiysk.

Festival for All

To take part in the opening cer­emony of LPG plant Ambassador of Great Britain Tim Barrow, Ambassa­dor of the Netherlands Ron Keller, Shell Executive Vice-President for Russia and the Caspian Region Har­ry Brekelmans and other top-level officials visited the capital of Yu­gra region.

The opening ceremony of the facility was preceded by the meet­ing of the Governor of the Khanty- Mansiysk Autonomous Okrug – Yu­gra Natalia Komarova and members of the Government of the Okrug. Natalia Komarova mentioned that the opening of the plant will ‘make the economy of the okrug more ad­vanced technologically and it will also give the okrug a cleaner envi­ronment’.

After the meeting the official opening ceremony of LPG plant was held. The ceremony, which took place in the Yugra-Classic Theatre and Concert Hall, was held with the participation of more than 60 guests. Representatives of inter­national, federal and regional mass media covered the event. The cer­emony was opened by the Gover­nor of Yugra Natalia Komarova, who spoke of the importance of the as­sociated petroleum gas utilization program for the Okrug in particular and Russia in general. The project implementation stages were de­scribed in detail by its immediate participants: Andrey Nepomnyash­chy, Executive Director of OOO Mon­olit, Simon Durkin, SPD CEO, and An­drey Shegimago, Vice-President for Geology, Development and Gas Pro­jects of OAO NK RussNeft.

Simon Durkin told that since the very start of the Salym project SPD paid a key attention to gas utilization issue and developed an extensive gas utilization program. This project covers two projects: construction and start-up of a gas turbine pow­er plant, which since 2008 has used

around 1/3 of the AGP to generate electric power; and construction of LPG plant within the fields to bring utilization gas up to 95%.

The climax of the ceremony was a live broadcast from LPG plant at the Salym fields. Despite the down­pour on the eve of the event and in the morning before it the guests saw a gas processing facility bathing in the sun. During the live broadcast the guests in the hall were greeted by Barrie Limond, SPD Field Manag­er, and Igor Loparev, Director Gen­eral of UgraGazProcessing – the op­erator of the plant. Following the short speeches the representatives of the companies moved to the con­trol room, where several seconds later they created history by press­ing a button and officially com­missioning the LPG plant. Accom­panied by loud applause everyone present at the event could see how the flare, where the precious hydro­carbon fuel was burnt only moments ago, went out. And several minutes later the first tank trucks with pro­pane-butane mixture left the terri­tory of the plant to meet their first consumers. The ceremony ended with congratulatory speeches from the Ambassadors of the Netherlands and Great Britain who described the partnership of the three companies as a unique example of mutually beneficial cooperation.

Unique Project

The gas processing system his­torically established in Russia con­sists of large gas processing facili­ties (with capacity of over 1 bln m3 per year). The main disadvantage of this system is in being bound to gas pipeline system. The Salym fields as well as Shapsha fields are located far from major gas pipelines; there­fore it is not economically feasible to establish a large gas processing facility within their territory.

The uniqueness of the pro­ject realized in Salym group of oil fields is in constructing LPG plant at the territory of the field for the first time ever in Russia. “The LPG plant is an unprecedented facility for the Russian oil and gas industry that has no parallels in the country. – tells Andrey Nepomnyaschy, Mon­olit Executive Officer. – The plant, of block-modular construction with ca­pacity of 360 mln m3 per year, gets APG from the oil companies and processes it into dry gas used for power generation units of SPD and RussNeft and extracts propane-bu­tane that goes to the market. Thus APG is not flared but fully processed contributing into sustainable use of natural resources. As a result of pro­ject execution, a full APG processing cycle was created to ensure both en­ergy efficiency growth and carbon emission reduction”.

“The LPG plant is a unique pro­ject of partnership between three companies and the government, and a genuine demonstration of the WIN-WIN principle. – SPD CEO Simon Durkin says. – The project is not only important for the com­panies but for the region and for Russia as a whole. The project has multiple benefits, creating a new company, new jobs, reducing emis­sions to the environment and pay­ing taxes to the government. The start up of the LPG plant is great example of what can be achieved through the mutual cooperation in building a reliable energy future”.

The gas utilization program is also in line with Russian federal pro­gram of energy efficiency. SPD gas utilization project enables to set up a new market of gas liquids that could be used for fuelling cars on gas, heat­ing, air conditioning and domestic needs as well. The project also con­tributes in solving energy generation issue and in improving the ecological situation in the region. Reduction of emission is over 460,000 ton per year (in СО2 equivalent).

Realization of the gas utiliza­tion project in Salym and Shapsha oil fields also boosted local busi­ness. Overall over 30 regional con­tractors and suppliers of equip­ment and materials participated in the project realization. During the project implementation local com­panies were actively contracted to perform different types of work and provide relevant services and equip­ment. Local companies SibKomplek­tMontazh and Megiontruboprovod­montazh were responsible for plant assembly, and the regional one called UralKhimmash produced and delivered tank containers.

Safety First

During all phases of this project implementation – from design to commissioning & operations – pri­ority attention was given to safe­ty and environmental issues. LPG plant has a block-modular construc­tion. This block-modular design is characterized not only by low oper­ational costs but by high reliability, and a possibility to increase power easily. Also a multimodal scheme of transportation of liquefied hydro­carbon gases (LHG) is applied us­ing tank-containers. This provides for zero losses during transporta­tion, preservation of the quality of the product, lack of need in load­ing/unloading racks and LHG stor­age farms, and decreased risk of man-made disasters.

SPD is one of the leaders in area of HSSE in the region and Russian one whole. The company has de­veloped a balanced HSSE manage­ment system. This system is based on the statutory Russian require­ments and international practice. It consists of clear-cut corporate principles, standards, rules and ar­rangements designed to ensure a safe work place and to reduce to a minimum the risks to a person’s health and safety, and to the envi­ronment. SPD also employs best-in-class technologies and equipment to ensure safety to people and the environment. During the plant con­struction and start-up one of the most challenging tasks was pro­moting SPD safety culture to Mon­olit and its contractors. SPD the company helped its partner to de­velop and implement safety princi­ples and procedures to ensure safe operations of the LPG plant.

High level of automation, cut­ting-the-edge technologies, prior­ity focus on HSSE enable LPG plant to be a unique facility not only in Western Siberia but in Russia in general. This plant is an excellent example of mutual cooperation be­tween three private companies that makes a significant contribution on social and economic development of the region.