Presentation Offshore Forum 28 May 2014

Offshore Forum
How can we optimise off/onshore cost and
operation?
28 May 2014
Doc. No. 14/06209-11 28 May 2014
Offshore Forum
1
Introduction
Søren Juel Hansen
[email protected]
Tel: (+45) 23 33 87 44
28 May 2014
Offshore Forum
1
About Energinet.dk
Date - Doc. no.
2
About Energinet.dk
28 May 2014
Offshore Forum
3
Electricity transmission grid
28 May 2014
Offshore Forum
5
Gas transmission before 2013
Dato - Dok.nr.
6
Gas transmission after 2013
Dato - Dok.nr.
7
Current operative partners
Dato - Dok.nr.
8
Large-scale investments - stable tariff
28 May 2014
Offshore Forum
4
Energinet.dk Gas Aims
According to the gas supply act:
1. Security of Supply
2. Market Development
3. Climate and Environment
Implicit aims:
4. Maximise the socio economic values in the North Sea
(follows from the decision making Danish Energy Agency
report on Ellund-Egtved from the Spring 2010)
5. Support the always current energy policy
(follows from Energinet.dk’s 100% state ownership)
28 May 2014
Offshore Forum
10
Energinet.dk Gas Aims
According to the gas supply act:
FOCUS OF
TODAY
1. Security of Supply
2. Market Development
3. Climate and Environment
Implicit aims:
4. Maximise the socio economic values in the North Sea
(follows from the decision making Danish Energy Agency report on
Ellund-Egtved from the Spring 2010)
5. Support the always current energy policy
(follows from Energinet.dk’s 100% state ownership)
28 May 2014
Offshore Forum
11
Former Climate & Energy
Minister Martin Lidegaard on
the Danish Energy Policy
Oil Gas Summit, Oil and Gas Denmark, Copenhagen, Denmark, September 10, 2013
• ... In Denmark we have broad political backing for using the
Danish resources of oil and gas to the largest possible
extent. Denmark is an oil and gas producing country and we
will use that to benefit the Danish society and the green
transition we have begun. …
• … we will … make a strategy for oil and gas. It is still too early
to say anything about the content of the strategy, but I can
elaborate on my thoughts at the moment. Infrastructure; we
need to look at the old facilities with increasing maintenance
in a time of decreasing production. We have to look at
energy efficiency. We need to make sure that we focus on
technology development to increase the recovery factor of oil
and gas. …
28 May 2014
Offshore Forum
12
Agenda for Today
13.00–14.10 - Session 1:
Release and presentation of
a study by Mærsk, DONG
and Energinet.dk
14.10–14.30 - Coffee
Break
14.30–16.00 - Session 2:
Perspectives for future
optimisation from Oil-GasDenmark, Gassco and Danish
offshore key stakeholders
28 May 2014
13
Feasibility Study
Compression of DUC gas at Egtved
• Energinet.dk’s approach to the project:
• maximise the Danish North Sea production
• increase the overall infrastructure energy efficiency
• reduce overall compressor emissions
• maintain capacity, the current high level of security of
supply and on-spec gas quality in the transmission system
28 May 2014
Offshore Forum
14
Feasibility Study
Compression of DUC gas at Egtved
• When MOG/DUC approached Energinet.dk had 2 options:
• Calling everybody for a common feasibility study
• Making a focused study and share it today
We look forward to discussing the study with you!
28 May 2014
Offshore Forum
15
DUC - DONG - ENDK
Offshore Basis
Mærsk Oil & Gas perspective
• Normal export pressure @ Tyra is 100-110 barg.
• Lower export pressure => lower Tyra compression power
Can Egtved compression enable lower Tyra export
pressure?
• Lower export pressure reduce offshore compression power
• Low pressure gas transport to shore is less efficient
• Overall infrastructure energy efficiency will be a balance of
the above
28 May 2014
#17
Feasibility perspective
• DUC/MOG is evaluating feasibility of:
• reducing the required pressure ab Tyra and ab Nybro
• In Q4 2013 MOG has contacted Energinet.dk with an
inquiry:
• can gas from the North Sea be compressed at
Energinet.dk’s new compressor station in Egtved ?
• Focus:
• possibility to save energy with current configuration
• possibility to optimise possible future compressor
configurations
Dato - Dok.nr.
18
Gas Infrastructure related to
North Sea gas export to shore
24”
28 May 2014
#19
Offshore Gas Infrastructure
28 May 2014
#20
Relevant interfaces/boundary
conditions
• Existing Nybro HC dew point process in Nybro is a HCFC
(Freon) driven chilling system
• commercial use of HCFC is banned from 2015
• DONG is currently investigating a suitable replacement
• Energinet.DK has recently constructed a compressor
station in Egtved
• The Hejre project includes construction of a processing
plant in Fredericia, for extraction and fractionation of
NGL’s from Hejre crude petroleum
• DUC/MOG is considering future compressor configurations
offshore Tyra
page 21
Offshore Forum
Nybro infrastructure challenges and possibilities
28 May 2014
Peter Schroll Christiansen
Nybro infrastructure challenges and possibilities
Danish Upstream Transportation System
Harald
Aerial view of Nybro
South-Arne
Nybro
Tyra East
23
Nybro infrastructure challenges and possibilities
Current Nybro facts
Current Nybro facts
2 gas receiving terminals:
Tyra terminal:
•
•
Build in 1982-1984
•
Primary function: Meter and regulator
station for up to 25 mcm/day of onspecification gas.
•
Secondary function: back-up to offshore
gas treatment with a capacity of ~11
mcm/day of off-specification gas wrt:
•
Tyra terminal receiving all gas from
DUC-fields, Trym-field and Lulita-field
South Arne terminal receiving all gas
from South Arne field and from 2015/16
also Hejre-field.
•
H2S removal
•
HC dew point adjustment
•
Water dew point adjustment
South Arne terminal:
24
•
Build in 1998-1999
•
Primary function: Meter and regulator
station for up to ~6,5 mcm/day of onspecification gas
•
No separate gas treatment capability
Nybro infrastructure challenges and possibilities
Current Nybro facts
Nybro constraints
Nybro additional capabilities:
Environmental impact:
Normal operational mode:
•
H2S removal emits SO2 to atmosphere
•
•
HC dew point adjustment cause flaring
of NGL's
Blending of gas from the 2 terminals to
mitigate transient off-specification gas
situations at one of the terminals.
Hence:
Danish Emergency Situation:
•
Authorities have imposed restrictions on the
usage of Nybro gas treatment facilities.
Possibility of importing and treating gas
from Harald platform in a situation with
outtage of the Tyra to Nybro offshore
pipeline.
25
Nybro infrastructure challenges and possibilities
Nybro challenges
26
Nybro infrastructure challenges and possibilities
Nybro possibilities (stand alone)
Nybro / Tyra possibilities
How can Nybro and Tyra together stay
efficient (low Opex/CF) and competitive
(low Opex/boe) ?
How can Nybro stay efficient (low
Opex/CF) and competitive (low
Opex/boe) ?
Answers:
Answers:
1.
Decommission parts of Nybro to lower
Opex (and CF) and/or
2.
Attract new volumes to Nybro in
competition with Norwegian/Dutch/UK
alternatives in order to increase
throughput (boe)
ad 1) has not so far been successful due to
contractual obligations
1.
By moving processes from the Tyra
platform to onshore Nybro, opex can be
lowered without increasing CF
2.
Attract new volumes via Tyra to Nybro
in competition with Norwegian/
Dutch/UK alternatives in order to
increase throughput (boe)
ad 1) currently being looked at by Mærsk
and DONG.
ad 2) has been (partly) successful by
attracting Norwegian Trym-field and
Danish Hejre-field. Danish Solsortfield is under evaluation
ad 2) has been (partly) successful by
attracting Norwegian Trym-field.
Danish Solsort-field is under
evaluation
27
Compressor
station Egtved
Nina F. Vendelboe
Dato - Dok.nr.
28
Dato - Dok.nr.
29
Dato - Dok.nr.
30
Dato - Dok.nr.
31
Capacity Expansion Ellund - Egtved
• Compressor Station in Egtved
• 4 Compressor Units each 5,5 MW (3+1)
• Gas transmission pipeline from the Danish/German
border Ellund/Frøslev – Egtved
• 94 km 30” pipeline (Ø 750 mm)
• Capacity: 1,000,000 m³/h
- 700,000 m³/h
• Investment 200 MEUR
In operation October 2013
3. november 2009
Infrastructure development in Denmark
32
Dato - Dok.nr.
33
Operation of the compressor station
• We have built a compressor station
at the ‘crossing’ of the Danish
natural gas transmission system
• We can raise the pressure from
approx. 45 bar to approx. 80 bar –
depending on the duty point
• Suction can be made from one or
more of 4 separate subsystems in
the transmission system and
supplied to a joint pool
÷
÷
+
+
• The compressor station must have
incorporated redundans in all
subsystems so that we always can
proceed if something fails
Dato - Dok.nr.
34
A ‘typical’ compressor station
Compressor units og header in Egtved
Header
North
North +West
West
East
South/
East
South
Unit
Compressor unit
Cooler
Cooler
by-pass
Freeflow
Bypass
(valve)
Filter
separator
Recirculation
loop
Slide 37
Compressor
building
Stage 2
Motor
Stage 1
Flexible use of the Compressor – Flow scenarios
The capacity from
South (Ellund)
700.000 Nm3/h with
2 compressor units in
operation.
Dato - Dok.nr.
39
Flexible use of the Compressor – Flow scenarios
Unchanged capacity
from West (Nybro)
Free flow above 1 mio.
Nm3/h.
Dato - Dok.nr.
40
Flexible use of the Compressor – Flow scenarios
The capacity from
North (Ll. Torup)
must be 200.000
Nm3/h with one unit
in operation and
additional flow from
West and/or South.
Dato - Dok.nr.
41
Energinet.dk
Results of the feasibility study:
Compression of DUC gas in Egtved
Claus Møller Petersen
Dato - Dok.nr.
42
Agenda
• Background
• Scope
• Case assumptions
• Scenarios
• Important notes
• Conclusion
Dato - Dok.nr.
43
Background
The feasibility study is initiated on
DUC’s request and is covering the
possibility of moving compression of
gas from offshore to ENDKs
compressor station in Egtved.
Dato - Dok.nr.
44
Scope
Egtved
Pressure
ab Nybro
Cost
estimates
Dato - Dok.nr.
• Layout – optimal piping and equipment
• Operation – philosophy, flexibility etc.
• Defining minimum pressure ab Nybro
• Based on temp. -13 °C
• Estimation of CAPEX
• Estimation of OPEX
45
Case assumptions
Energy
price
(ENDK
forecast)
Max
volume by
2020
Tyra: 250,000 Nm3/h
S. Arne + Hejre:
100,000 Nm3/h
DKK 0.82 kWh
(2020)
Egtved
energy
consumption
Compressor
set-up
Redundancy (3+1)
is maintained
0.6 Wh/(Nm3 bar)
Dato - Dok.nr.
46
Scanario 1
Lowering the gas pressure in both Nybro-Egtved pipelines.
Nybro
Dato - Dok.nr.
Nybro-Egtved North
Low Pressure
Nybro-Egtved South
Low Pressure
Egtved
compressor
47
Scenario 1
• No re-design in Egtved, i.e. no CAPEX
• Pressure requirement ab Nybro: 54 bar
• OPEX: Approximately DKK 40 million per year.
Dato - Dok.nr.
48
Scanario 2
- Low pressure is delivered in one of the two pipelines (gas from Tyra)
- High pressure is maintained in the other pipeline (gas from SA and Hejre)
2.1
Nybro
Nybro-Egtved North
Nybro-Egtved South
High Pressure
Egtved
compressor
Low Pressure
2.2
Nybro
Nybro-Egtved North
Nybro-Egtved South
Low Pressure
High Pressure
Egtved
compressor
Scanario 2
• Pressure requirement in the low pressure pipeline ab Nybro:
50 bar
• Re-design (several designs identified) in Egtved – est. at
DKK 25 million
• OPEX is estimated at DKK 37 million p.a.
Dato - Dok.nr.
50
Important notes
• Gas quality
Gas entering the transmission grid must be within the gas
quality specification
• Costs
Estimates (construction costs)
Forecast (energy prices)
Costs
• Timing
12 months from go-signal in case of technical modification
Dato - Dok.nr.
51
Conclusion
Yes, reducing pressure ab Nybro
from 78 to 54 barg is possible!
Two alternatives analysed:
1. Pressure reduction in both pipelines
2. Pressure reduction in only one of the pipelines
Key parameters to observe:
• Volume expectations
• Pressure ab X (Nybro, platform, other points)
Dato - Dok.nr.
52
Offshore Forum
Session 2:
Perspectives for future optimisation from Oil-Gas-Denmark, Gassco,
DERA, Bayerngas and Nordsøfonden
28 May 2014
Offshore Forum
1
Offshore Forum
How can we optimise off/onshore cost and
operation?
28 May 2014
28 May 2014
Offshore Forum
1
Highlights from Energinet.dk’s
comparative studies
Søren Juel Hansen & Camilla Mejdahl Jeppesen
[email protected]
Tel: (+45) 23 33 87 44
28 May 2014
[email protected]
Tel: (+45) 51 67 78 60
Offshore Forum
1
UK Recovery Maximisation Policy
• United Kingdom
• UK expects growth but seems to have passed its peak recovery
• UK’s infrastructure is in private ownership and softly regulated
• Like Denmark, UK expects to be able to recover more oil and gas with
a new national strategy
• Sir Ian Wood’s (politically well received) 2014 report recommends:
• A new shared strategy for “maximising economic recovery”
• Creation of a new arm’s length regulatory body
• Greater collaboration by industry in areas such as
development of regional hubs, sharing of infrastructure and
reducing the complexity and delays in current legal and
commercial processes
28 May 2014
Offshore Forum
57
NL Recovery Maximisation Policy
• Netherlands
• Like UK and DK, NL seems to have passed its peak recovery
• but seems to have a success with marginal production
• NL’s infrastructure is in private ownership and softly regulated
(Energinet.dk has not been able to obtain public netcodes)
• NL has a state North Sea fund (EBN) which participate up to 40%
and seems to go actively into the commercial aspects
• Although NL off/onshore infrastructure is clearly separated,
NL focus on maximisation of field production, marginal
field production, treatment and separation seems to be
more optimised than in e.g. UK and Denmark
28 May 2014
Offshore Forum
58
N Recovery Maximisation Policy
• Norway
• Norway’s production seems to be near its peak
• In 2003 Norway made a successful change of strategy
• from sub-optimisation to super-optimisation
• N’s infrastructure is merged into one regulated system for gas
and gas treatment, Gassled, which is
• owned by users and pension funds and
• controlled, developed and offered to the North Sea players by
the Norwegian non-profit state ISO, Gassco
• Like NL and DK, N has a state North Sea fund, Petoro
• The Norwegian ministry is very active both in policy and in the
individual recovery licenses
28 May 2014
Offshore Forum
59
Highlights from comparative offshore study
Gassled
DONG Naturgas
Balancing period
Daily
Hourly
Balancing info
Daily
Hourly
In kind
Reduced flow / 50% of TTF price
Lineflex if planned maintenance
Balance settlement
Balance and maintenance
Gas quality blending
Specified
Possibility to purchase gas at GTF
if unplanned maintenance
Possible
Gas quality treatment
Specified
Possible
Gas quality separation
Specified
NA
Wet gas
Possible
NA
Operator/collective
Shipper (same as onshore in DK)
NA
Yes
Within Day + Opflex
Within Day
Plans, studies, open season,
etc.
NA
Gas quality liability
Onshore coord. capacity
Flex capacity products
Transparent and
regulated processes
28 May 2014
Offshore Forum
60
Highlights from comparative onshore study
GTS / Gasunie*
Energinet.dk**
Hourly + ongoing balance
Daily + cashed out daily
Hourly
Partly Hourly / Partly Daily
Market price +/- 0,4%
Market price +/- 0,5%
TTF is EU top-liquid
Less liquid, follows TTF
Gas qual. blending
Possible
NA
Gas qual. treatment
Possible
NA
Gas qual. separation
Possible
NA
Wet gas
Possible
NA
Gas qual. liability
Shipper
Shipper
Offshore coord. capacity
NA
Yes
Flex capacity products
NA
Within-Day
Plans, studies, open season, etc.
Plans, studies, open season, etc.
Balancing period
Balancing info
Balance settlement
Liquid hub
Transparent and
regulated processes
* GTS balancing regime as of June 3 2014, ** Energinet.dk balancing regime as of October 2014
28 May 2014
Offshore Forum
61
Perspectives for the Danish Sector of
the North Sea
Challenges and opportunities ahead!
Presentation – Energinet.dk – Offshore Forum
28 May 2014
May 28, 2014
page 62
Presentation
agenda
1
Oil Gas Denmark, brief presentation
2
Perspectives for the Danish Sector of the
North Sea
3
Challenges and opportunities ahead!
- Realization through three ‘growth engines’
May 28, 2014
Presentation
agenda
1
Oil Gas Denmark, brief presentation
2
Perspectives for the Danish Sector of the
North Sea
3
Challenges and opportunities ahead!
- Realization through three ‘growth engines’
May 28, 2014
Organisational basis
DANISH OPERATORS
Offshore Oil and Gas Operators in Denmark
Service
Companies
Supplier
companies
~total 50 members
Dong
E&P
HESS
Mærsk
Oil&Gas
Noreco
Wintershall
Shell
Chevron
Danoil
Bayerngas
Nordsø
Fonden
VNG
PA
Ressources
TOTAL
page 65
Geographical span
On longer
term the aim
is to establish
collaboration
with
Greenland
and the
Faroe Islands
Source: Energistyrelsen
page 66
Presentation
agenda
1
Oil Gas Denmark, brief presentation
2
Perspectives for the Danish Sector of the
North Sea
3
Challenges and opportunities ahead!
- Realization through three ‘growth engines’
May 28, 2014
Challenge # 1
The oil is deposited i tiny pores in limestone with low permeability
and low porosity
Recovery rate average 28%
page 68
Energy consumption in Denmark (1990-2022)
Share of total energy consumption in Denmark (per cent)
100%
Change from '90
to '10
(percentage
points)
Change from '10
to '22
(percentage
points)
90%
80%
43.3%
38.7%
40.4% Oil
20.6%
16.9% Gas
-4.6%
1.7%
10.6%
-3.7%
-21.8%
-3.4%
15.8%
5.5%
70%
60%
50%
10.0%
40%
30%
14.7% Coal
18.1%
39.9%
20%
0%
28.0% Renewables
22.5%
10%
6.8%
’90
’92
’94
Source:
’96
’98
’0
’2
’4
’6
’8
’10
’12
’14
’16
’18
’20
’22
The Danish Energy Agency: "Danmarks olie- og gasproduktion 2010"
Actual production has exceeded most prognoses made by
the Danish Energy Agency
The Danish Energy Agency:
"Historically, the Danish oil and gas sector has been
innovative in improving their production methods to
increase recovery rates and thus the total production is
above the expectations of the energy agency"
150
140
Deviation between
actual forecasted
production 2010
Volume
(mmboe)
130
Value
(bnDKK)*
120
-19.3
-8.4
2000 prognosis
31
13.5
30
1995 prognosis
56.8
24.8
20
1990 prognosis
69.2
30.2
110
2005 prognosis
100
90
Actual production
80
70
60
50
40
10
0
1990
1992
1994
1996
1998
2000
2002
2004
* Assuming an oil price of 79.5 USD/barrel; USD/DKK = 5.5
Source:
The Danish Energy Agency
2006
.
2008
2010
It is complex to drill at the Danish shelf and future well sizes are
estimated to be amongst the smallest in NW Europe
Well length and future field discovery size
mmboe, metres, bubble size = remaining reserves 2011
Remaining reserves (mmboe**)
Average total well
length (2007-11)*
(metres)
6.000
5.500
Denmark
1.242
Norway
20.130
5.000
4.500
4.000
The U.K.
4.523
3.500
Netherlands
7.601
3.000
0
0
10
20
30
40
50
60
70
80
90
Average future
field discovery
100 (mmboe)
*Average measured depth from the rotary table to the end of the well (TD) along the well bore. Figures include
production, appraisal and exploration drillings from 2007 to 2011
**Commercial reserves as per 1.1.2011
Source: Norwegian Petroleum Directorate; The Rushmore Reviews; BP Statistical Review; IHS Global Window
The oil and gas sector is the largest governmental
corporate income source in Denmark
Additional tax* not included in DST data
Corporate tax contributing industries in 2010
DKK billions
23.7
The Danish Energy Agency estimates the total
direct corporate tax contribution* from the oil and
gas sector to be DKK 23.7 billion
16.4
8.2
5.2
3.8
7.4
Financial
and
insurance
Share of
total
(per cent)
Extraction
of oil and
gas
17,0%
15,3%
2.5
Wholesale
and retail
trade
10,8%
2.0
1.4
1.2
Transportation Pharmaceuticals Manufacture of Knowledge- Telecommunications
furniture and
based
other
services
manufacturing
7,9%
5,3%
4,1%
2,9%
2,5%
In 2010, for every 1 million barrels of oil equivalent produced, government revenues of DKK ~170 million were generated
* In addition to ordinary corporate taxes, government revenues from the oil and gas sector includes carbon tax and profit-sharing
Source: Statistics Denmark; the Danish Energy Agency
The indirect activities driven by the oil and gas sector create
significant personal income tax revenues
Direct and indirect sector personal tax
DKK millions , average 2008-10
Historical oil and gas sector direct and indirect personal income
tax contribution
Index, 100 = Direct employment 1992
Indirect
3,200
Indirect
Direct
1,400
1,200
1,000
800
600
400
200
0
5.4%
5.0%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
2,500
Historical production and average salary cost
per employee
Index, 100 = 1992
OPEX
Production volume
400
CAPEX
300
700
CAGR
'92-'10
(per cent)
5.9%
4.2%
3.1%
200
Direct
CAGR
'92-'10
(per cent)
100
0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Note: Direct and indirect figures are related to the Danish oil and gas sector
Source:
Statistics Denmark – National accounts
Employees have significantly higher educational levels
than the average Danish employee
Highest completed educational level per employee – comparison of the oil and gas
sector to DK average employee, 2009
Per cent
32.4%
All
Extraction of oil and gas
30.1%
22.0%
23.0%
20.2%
18.9%
14.6%
13.6%
13.0%
7.1%
2.3%
1.0%
Elementary
school
0.5%
Upper
secondary
education
Standardised
basic training
and apprentice
levels
Short-term
higher
education
Medium-term
higher
education
Long-term
higher
education
PhD-level
education
54% of employees within "Extraction of oil and gas" have completed a higher education compared to the national average of 35%
Source:
Statistics Denmark – "Registerbaseret arbejdsstyrkestatistik"
1.3%
Presentation
agenda
1
Oil Gas Denmark, brief presentation
2
Perspectives for the Danish Sector of the
North Sea
3
Challenges and opportunities ahead!
- Realization through three ‘growth engines’
May 28, 2014
Potential
Technological Resources
Exploration Resources
Contingent Resources
Mmboe
200
2013
Gas Production
Oil Production
150
100
50
0
72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42
Source: Danish Energy Agency; Quartz+Co-analyse
Mmboe
1600
DKK 190 bn. in taxes
1400
1200
1000
70 pct.
(1,4 bn. bbls)
800
600
30 pct.
DKK 190 bn.
incremental
tax payments
if half of the
potential is
realised
400
200
0
Planlagt produktion (2018-2042)
Potentiale (2018-2042)
Kilde: Energistyrelsen; Quartz+Co-analyse
page 77
Production is decreasing
Total yearly production and reserves
Mmboe
Production
Gross Change in Reserves
200
-10%
150
Ø 112
100
50
0
-50
-100
2002
2003
2004
Source: Danish Energy Agency
2005
2006
2007
2008
2009
2010
2011
2012
Wells drilled in Denmark
Total number of wells per year
50
45
40
35
30
-19%
25
20
15
10
5
0
1982
1984
1986
1988
Ø = 22
Source: Danish Energy Agency
1990
Ø = 19
1992
1994
1996
Ø = 18
1998
2000
Ø = 35
2002
2004
2006
Ø = 26
2008
2010
Ø = 12
2012
EXPLORATION
Exploration wells drilled in Denmark
Exploration wells west of 6º 15’ line
Exploration wells east of 6º 15’ line
1983:
Introduction of
bidding rounds
14
12
10
1962: Sole
Concession
and DUC
1984:
Bidding
Round 1
1981: Sole
Concession
amended
1967:
First
discovery
1989:
Bidding
Round 3
1986:
Bidding
Round 2
1995:
Bidding
Round 4
1998:
Bidding
Round 5
2006:
Bidding
Round 6
8
6
4
Ø4
2
0
’62
’64
’66
’68
’70
1962-1969
’72
’74
’76
’78
1970’ies
14 wells
(2 per year in av.)
34 wells
(3 per year in av.)
’80
’82
’84
’86
’88
1980’ies
64 wells
(6 per year in av.)
’90
’92
’94
’96
’98
1990’ies
32 wells
(3 per year in av.)
Source: Danish Energy Agency; Nordsøfonden; Energi- og Olieforum
’00
’02
’04
’06
2000’ies
’08
’10
’12
2010-2013
32 wells
9 wells
(3 per year in av.) (2 per year in av.)
Average size of discoveries per decade
Mmboe
220
200
202
180
160
140
120
100
80
60
60
40
41
20
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
10’ies
90’ies
00’ies
Source: Danish Energy Agency; Oil Gas Denmark
MARGINAL FIELDS
Development of discoveries
Amount and percentage
35
Maersk Oil
PA Resources
Relinquished to DEA
DONG Energy
Wintershall
Size of discovery
Years since
discovery
18
40
Adda
35
Gert
30
51%
Boje
Elly
Ravn
25
1
3%
100%
Alma
Amalie
16
20
Svane
15
46%
Sofie
5
0
Discoveries
Fields
developed
Ongoing
developments
Non
developed
discoveries
Lille John
10
Rau
Sara
Solsort
Luke
Presently not
commercial
Broder Tuck
Hibonite
Considerations
ongoing
Source: Danish Energy Agency; Wood Mackenzie; Olie Gas Danmark; Quartz+Co-analyse
Development plan.
Non developed discoveries
Size of field
Mmboe
950
Lime/stand alone
Tieback/sandstone
Sandstone/stand-alone
Not developed
Tieback/limestone
Dan
Halfdan
900
850
800
Tyra
Gorm
400
350
Skjold
300
Syd Arne
250
Harald
200
Hejre
Valdemar
150
Roar
100
Siri
50
0
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
6.000
Depth of reservoir
Meter
Source: Danish Energy Agency; Olie Gas Danmark
Development of small discoveries
50mmboe or smaller:
Development concept:
33%
100%
5
19%
7
8%
71%
7
14%
13
1
5
Norway
14%
1
UK
Denmark
Kilde: Wood Mackenzie; Maersk Oil; DONG Energy; HESS
Tieback
Unmanned
platforms
Subsea
installations
Stand alone
Lead time – up to 50 MMBOE
Exploration license
Field Development
5
7
Production start up
Total
2
14
34 years
20
Lead time
Life time of field
Expected remaining life time for existing infrastructure
Svend
Siri
Nini
Cecilie
Lulita
Kraka
Roar
Gorm
Skjold
Harald
Valdemar
Syd Arne
Dan
Halfdan
Tyra
7
7
7
7
Financial cut off < 14 years
Financial cut off > 14 years
8
12
13
14
16
16
17
19
21
22
23
Source: Danish Energy Agency; Wood Mackenzie; Olie Gas Danmark
RECOVERY RATE
Recovery Rate on field basis
Recovery
Rate
STOIIP
Tyra + Tyra SE
Halfdan
Dan
Syd Arne
Valdemar
Skjold
Gorm
Kraka
Hejre
Roar
Rolf
Svend
Siri
Regnar
Harald
Dagmar
Lulita
Nini
Cecilie
-2.563
-1.625
-1.393
199
35
8%
517
670
141 94
47 28
-547
-531
-470
282
-388
379
33 4
-267
-183 78
-134 16 1
-120
28
46 6
-110
62 4
-80
6 0
-56
51 2
-50
-24 6
-19 3 0
13 2
-16
426
112
33
21
37%
36%
30%
12%
40%
51%
12%
30%
12%
19%
32%
45%
9%
51%
21%
16%
47%
37%
-14 7 1
Remaining oil (volume) following planned end of production
Produced oil (volume) from start of production until 2012
Remaining potential at present recovery rate
Source: Danish Energy Agency; Maersk Oil; DONG Energy; HESS; Quartz+Co-analysis
Average 28%
UNLOCKING POTENTIAL
Self sufficiency
Mmboe
Technological Resources
Exploration Resources
200
Conditional Resources
Gas Production
Oil Production
Demand
150
100
50
0
72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42
Source: Danish Energy Agency
Key messages
Huge potential in the Danish Sector of the North Sea
Realization of potential requires massive investments
Need for stable and incentivising framing conditions
Focus on enhanced exploration, production of marginal fields, increase
of recovery rate
Climate and Energy Minister has committed to initiate collaboration in
respect of a ‘Long Term Strategy’ for realization of the potential in
Denmark
Growth Engine I – Exploration
• Following years of successful exploration, the number of
licenses have decreased in DKCS and number of exploration
wells is relatively low.
• Discoveries are forthwith made in DKCS, however, the
discoveries are increasingly getting more marginal and costs
are increasing a.o. because of scarce rig availability.
• Should the exploration resource be realised more
exploration wells need to be drilled. This could happen if
applying e.g.:
•
•
•
•
Differentiated incentives encouraging exploration
A more agile licensing structure
Harmonisation of regulation with other EU countries
Encouragement of developing marginal discoveries
Growth Engine II – Production of Marginal Fields
• Almost half of all discoveries on DKCS have not been developed.
• Marginal discoveries represent a significant resource for
Denmark, however, due to size and increase in development
costs development need tie back to existing infrastructure.
Tie back can be a challenge in spite of good opportunities for tie
back, including legal basis for same.
• Development of marginal fields include significant economical
uncertainty. Therefore marginal fields are suffering when
competing for capital in the oil companies’ investment
portfolios.
Growth Engine II – Production of Marginal Fields
• There is a significant risk that vital parts of the existing
infrastructure in DKCS will be decommissioned due to
economic reasons. This will reduce the time window for tie back
of marginal discoveries.
• In so far marginal discoveries should be tied back to existing
infrastructure in the years to come, then the total planning
period must be reduced. Moreover, the economic uncertainty
needs to be reduced e.g. by establishing an incentive structure.
• Simultaneously, it should be made attractive to invest in
producing fields’ ‘tail-end production’ and thereby extending
the lifetime of existing fields and the window for tie back of
marginal fields.
Growth Engine III – Recovery Rate
• DKCS operators have continuously increased the recovery
rate. Today an average recovery rate of 28% is expected
in DKCS.
• For each percentage point increase of the recovery rate
achieved, a significant value for the operators and the
Danish society is gained.
• The limited size of the fields and the geological
conditions of the Danish subsoil makes a further
increase of the recovery rate difficult. The recovery rate of
the DKCS lime stone is significantly lower than that of sand
stone .
Growth Engine III – Recovery Rate
• In order to further increase the recovery rate the
following will be needed:
• Increase number of productions- and water injection
wells
• Extend conventional water injection to more fields
• Establish a comprehensive plan for commercial use of
CO2-injection on relevant DKCS fields
• Intensify general research in respect of secondary and
tertiary recovery techniques
• Establishing incentives structures.
What is required to realize the potential?
Incentives
Costs
Enhanced
Operator
Collaboration
Incentives
Regulatory
adaption
Source: Quartz+Co-analysis
page 98
Further information
Martin Peter Næsby
Managing Director
Mobile 21 99 65 50
Esben Mortensen
Head of Secretariat
Mobile 29 49 45 75
Please visit web site
www.oilgasdenmark.dk
Ulla Lena
Head of Communication
Mobile 31 48 19 27
Dorthe Heedegaard
Office Manager
Mobile 26 15 10 34
Thank you!
page 99
Infrastructure development on the Norwegian
Continental Shelf
Offshore Forum, Copenhagen 28 May 2014
Sten Arve Eide
www.gassco.no
The Norwegian gas story started in 1977
• Norway has developed a unique and cost
effective gas infrastructure
• Important milestones:
‒ 1977: Start-up Norpipe and Frigg
‒ 1985: Start-up Statpipe/Kårstø
‒ 1996: Start-up Troll/Kollsnes
‒ 1999: Start-up Åsgard
‒ 2007: Start-up Ormen Lange/
Nyhamna
• Western Europe most important gas
source:
European gas supply
‒ Russian pipeline gas
‒ Norwegian pipeline gas
‒ Indigenous production
‒ North Africa
‒ LNG
Source: European TSO
www.gassco.no
101
Establishment of Gassco AS
• Gassco AS was established in December 2000 on the basis of a government
White Paper, and approved by the Storting (parliament) in April 2001
• Its board of directors was first appointed on 9 May 2001
• Gassco currently has 365 employees
• Operations began on 1 January 2002
• Gassco is a state-owned company
• It serves as the neutral and independent operator
of the integrated gas transport system from the
Norwegian continental shelf (NCS) to
continental Europe and the UK
www.gassco.no
www.gassco.no
The number of shippers have increased the latest years
www.gassco.no
The transportation system is owned by the Gassled joint venture
www.gassco.no
The integrated Norwegian gas export system
Oil and gas companies
individually..
Special features of the gas model
..produce..
1. Regulated regime
..transport..
2. User and owner engagement
3. Independent system operator
Non-discriminatory
..and market..
Transparent
Efficient
.. their own gas
www.gassco.no
Some key challenges for the Norwegian gas infrastructure system
Short to medium term
challenges?
- New gas
- Distribute capacity
- Optimize use of system
- Build new capacity
Long term challenges
Understanding the future
is essential for decision
taking
- Build new capacity
- Consolidation
www.gassco.no
107
Work processes for gas infrastructure development – examples
108
Development of new infrastructure – Open Season
• Development of new infrastructure may
be initiated by the architect (Gassco) or
by a third party
• Gassco invites participants through an
«open season» process
• Participants and Gassco enter into
«funding agreement(s)» that regulate the
project development, scope of work and
funding
• Gassco is in charge of the process up to
concept select decision
• Gassco facilitates the commercial
processes (draft agreements, proposes
investment shares etc.)
• The participants reserve capacity in new
infrastructure according to their
respective investment share (subject to
DRSN)
PR §66A
The operator shall seek to identify natural gas
undertakings and/or qualified customers with a
specific interest in the evaluations performed under
this paragraph. The operator may invite natural gas
undertakings to participate in development of
upstream pipeline network and associated facilities.
PR §62
When allocating rights to use increased spare
capacity in an upstream pipeline network,
consideration shall first be given to the duly
substantiated reasonable needs of the party who
bore the cost of such capacity, limited upwards to
that party’s share of the investment.
PR §63
The capital element is stipulated by the Ministry.
When stipulating it, consideration shall be given to
promoting the best possible management of
resources. Furthermore, the capital element must
be so stipulated that the owner can expect a
reasonable return on the capital invested.
• The MPE determine the capital tariffs
www.gassco.no
Several field- and infrastructure development projects are
ongoing on the Norwegian Continental Shelf
• 78 producing fields
Barents Sea:
• 13 fields under development
• 88 fields undergoing evaluation
• Number of exploration wells was record
high in 2013 – with a success rate of
44%
Norwegian Sea:
• New gas and oil infrastructure projects
in the Sleipner- and Tampen area
• Polarled is scheduled to be in operation
Q4 2016
• Barents Sea Gas Infrastructure (BSGI)
forum established
North Sea:
110
Extending the gas value chain northwards
• One of Europe’s largest industrial projects
the next years
Polarled Pipeline Project
• First crossing of Artic circle with a subsea
pipeline
• Deepest field development and pipeline
on NCS
• Increased processing- and export
capacity at Nyhamna
• Investment decision 1Q 2013,
start-up 2016
www.gassco.no
111
The Barents Sea Gas Infrastructure (BSGI) study is a
common effort for evaluating gas infrastructure solutions
www.gassco.no
112
On the Utsira High in the North Sea significant oil and gas
discoveries have been made - after 40 years of exploration
•
The Gudrun field will start production in
2014. Light oil from Gudrun will be
processed at Kårstø
•
Edvard Grieg and Ivar Aasen discoveries
are planning export of gas via the SAGE
system to UK with start-up in 2015 and
2016 respectively
•
Johan Sverdrup, one of the largest
discovery ever made on the Norwegian
Continental Shelf, is planned to start-up in
2019. Oil and gas from Johan Sverdrup will
be transported to Mongstad and Kårstø
respectively
•
Johan Sverdrup is planned to produce for
50 years, and in at peak production
represent 25% of the total oil production
from NCS
www.gassco.no
113
The Norsea Gas Terminal has been in operation for more than 35
years and will be upgraded to ensure safe and reliable operation
• Gassco Emden Project
• Robustness
• Investment decision Q4 2012,
start-up October 2016
• Investments; ~6 BNOK (~750 M€)
www.gassco.no
114
Gas Market
What can we do to make DK onshore gas
system and market more attractive?
Jeppe Danø
Date - Doc. no.
1
More attractive?
Date - Doc. no.
10
The Danish Gas Infrastructure
Transmission network
860 km high-pressure pipeline system
46 M + M/R stations
Exit zone:
13,000 MWh/h 414,000 consumption sites
Distribution networks
Approx. 17,000 km pipelines
Storage
12,000 GWh storage volume
Upstream system
640 km pipeline system
16,500
MWh/h
Dragør
3,055 MWh/h
(1 Oct. 2014:
3,666 MWh/h)
Exports to NL
12,900 MWh
Ellund
Ellund
4,200 MWh/h 7,700 MWh/h
Two storages
Energinet.dk Gaslager
Lille Torup
Contacts:
Bjørn Denninger
Email: [email protected]
Adam Elbæk
Email: [email protected]
Dong Storage
Stenlille
Contacts:
Line Brinch-Nielsen
Email: [email protected]
Katrine Grunnet
Email: [email protected]
The new danish balancing system
Flexible daily-based balancing
system
Market-based
settlement end-of-day
Lowest possible small
adjustment (0.5 %)
Dato - Dok.nr.
119
DERA
Perspectives on off/onshore optimisation
Lisbet Vedel Thomsen
Specialkonsulent
28 May 2014
Offshore Forum DK
Ballerup the 28th of May 2014
DM#72295
2014-05-07
Bayerngas Norge
Active player in Norway, Denmark and the UK since 2006/2007
o 68 exploration licenses (5 as operator)
o 3 licenses in Development Execution (Hejre in Denmark)
o 2 licenses in Development Planning (Solsort in Denmark)
o 6 producing fields with total production of 20 000 boe/day
Broad experience with offshore infrastructure in Denmark
o Negotiations with Danish infrastructure owners since 2008 (Trym, Hejre, Solsort)
o Production and export of oil and gas via Danish infrastructure since 2011 (Trym)
Owned by
DM#72295
2014-05-07
12
3
Issues facing a new entrant to Danish offshore industry
Less mature regulation than elsewhere in the North Sea
o Existing structures hamper the ongoing process of modernizing the regulation
Few active participants
o Conflict of interests
o No liquid market for sale of oil and gas
Offshore Transportation System Operators (Dong Oil Pipe & Dong Naturgas)
o not sufficiently independent from the incumbents (Dong E&P, Shell and Maersk)
o lack ambitions on behalf of the transportation system
Aging infrastructure and decreasing production
o Reduced regularity
o Increasing opex
12
4
How to make Danish offshore industry more attractive?
Amend the regulation where necessary - securing a framework perceived to be:
o Predictable
o According to generally acknowledged standards
o Easy to use
Apply standard terms for required agreements based on common North Sea practice:
o Study/Cost Reimbursement Agreements
o Model Transportation Agreement
o Lifting procedures (oil, NGL, gas)
o Proximity Agreements
o Tie-in and Construction Agreements
o Crossing Agreements
Introduce ownership unbundling and independent system operators of the oil and gas export
infrastructure
12
5
The future of offshore infrastructure
Offshore forum
Mads Arndal-Lauritzen, Chief Commercial Officer, Nordsøfonden
28th May 2014
The main challenges
• Ownership of the offshore infrastructure
• Few owners
• Dual role (production and transportation)
• Historical contracts
• Gas Sales Agreements
Other challenges
• Complicated tie-in for marginal fields
Nordsøfonden experience smaller license holders struggle to
maneuver
• Difficulties for third party access
• Suboptimal utilization of production
• Capacity of oil pipe system (Fredericia) is a
bottleneck
The current structure halt future development
The National Strategy
• The Danish government has initiated a process to
develop an oil and gas strategy in collaboration
with the industry
• Four focus areas are identified, one of the issues is
the need to renovate and renew the infrastructure
To ensure that all existing resources, and any new
discoveries, can be fully exploited
• The strategy work to be completed by the end of
May 2015
Possible Future Actions
• Create an ownership structure that promotes
flexibility, suitable for the next 30 years
• Re-locate facilities offshore to onshore
Besides being a cheaper solution, shared facilities will increase
access for all players
• Evaluate the decision process for systems upgrade
E.i. Fredericia oil terminal or future on shore gas processing
• One active player to regulate or facilitate offshore
DEA or other entity to take a stewardship role
Closing
• Thank you for participating today
• Please do not hesitate to provide:
• your feedback and
• your proposals to next steps
to secure an appropriate off/onshore optimisation
We look forward to hearing from you!
28 May 2014
Offshore Forum
132