Presentation given at Engineers Australia, Perth, 1st March 2011

1. The Twin IPM ApproachA Practical Approach to the Problems of Integrated Production ModellingDr Martin WatsonFEESA-IPMs

2. Summary Integrated Production Modelling A definition Different methods Case Studies Corrosion constrained Production Profile Cold Flow technology Final remarks 2

3. Integrated Production Modelling Means different things to different people In general an “Integrated Production Model” (IPM) is a simulation of the production system from the reservoir to some point in the production system where an outlet (usually a pressure boundary) can be assumed. They are pressure specified Inlet and outlet pressures are specified; the flow rate is calculated subject to the equipment between the two Usually used for calculating production profiles Trade off between CAPEX and discounted revenue Usually some form of constraining the flow rate Max processing rates from facilities, max drawdown, etc Why IPM? Because of the interfaces 3

4. Multiple Interfaces 4 Any number of these interfaces could affect the production profile & CAPEX Technically they could all be modelled together Same laws of physics apply from reservoir to “gas cooker” Generally impractical Computationally “intensive” Disciplines need to work in parallel and need input at different levels of fidelity So a compromise is drawn, subject to the techno-economic challenges Downstream Economists Operations Production Chemists Process & Safety Risers Flow Assurance, Integrity Management Risers Subsea, Pipelines Structural Subsea, Pipelines Flow Assurance, Integrity Management Drilling & Completions G&G, Reservoir, PT

5. IPM “Horses for Courses” Various software companies have developed IPM tools Shaped by their project experience Looking at problems in a different way Most started with a product for one piece of the puzzle Written in the 1980’s for the kinds of projects they had in the 1980’s Stretched and bent and augmented with add-ons Some written entirely from scratch But by engineers from a particular focus with certain problems in mind As a result, no IPM tool can be all things to all people IPM means different things to different people Engineers must understand the problems they are trying to solve and the limitations of the tools they are using Different types of IPM 5

6. “Reservoir” Focused IPM Tools 6 Represents reservoir either as a tank/look-up table or 3D model Network and facilities modelled as look-up tables (lift curves) Pressure drop vs “Black oil properties” Conservation of stock tank volumes No thermal modelling of network No compositional modelling (compositions can be back calculated from rates) Used for economics Modelling errors usually within the reservoir and economics error Provides stock tank rates for other disciplines

7. “Reservoir” Focused IPM Tools 7 Flowsim Q1,T1 Q2,T2 Stock-tank production profile provided to Process and Flow Assurance Who pick “design cases” for their system A few snapshots that are the worst case for all components for all the other disciplines Is it possible to pick a few H&MB that are the worst case for everyone? Hydrates, wax, liquid hold-up, slugging Corrosion, erosion, pipelines Chemical and water injection systems Arrival heaters, compressors, coolers, recycles Harder to guess right in complex systems Can’t we model all these issues at once? Various technical limitations Wrong inlet enthalpies in pipeline model HypESIS

8. “Interoperability” IPM Tools 8 Connect all your favourite software tools together Fire your engineers Press the go button Technically easier said than done Interfacing is messy Stability issues All software has its idiosyncrasies Difficult to manage automatically Physics compatibility issues Different PVT assumptions Different conservation equations Management difficulties Who runs the model? Usually Subsurface Who are usually focused on subsurface issues Will there be time for looking at facilities issues? Good for detail but not for front end? IPM Tool HypESIS OGRE Flowsim PVTlite thermosim Multisim Welleez Black Oil Correlations Reserved PVFlash

9. The Twin IPM Approach A “reservoir focused IPM” AND a “facilities focused IPM” Reservoir IPM Detailed Reservoir but simple facilities representation Ran by the subsurface team; results for subsurface and economics Facilities IPM Simple Reservoir with detailed facilities models Ran by facilities engineers (Process/Flow Assurance); results for many engineering disciplines Economists G&G, Reservoir, PT Facilities Focused Flow Assurance, Integrity Management Production Chemists Process & Safety Risers Subsea, Pipelines Reservoir focused 9

10. The Twin IPM Approach – Input Exchange Reservoir IPM provides results for Facilities IPM reservoir model Facilities IPM can provide look-up tables for Reservoir IPM wells/flowlines etc Reservoir IPM is the keeper of “the production profile” Facilities IPM control chokes set to production profile rates But is pressure specified, i.e. will only produce that rate if it can Facilities Focused Reservoir focused 10

11. The Twin IPM Approach – The benefits Subsurface can get on with subsurface issues Fewer iterations of Reservoir IPM needed for facilities issues More facilities issues can be looked at Better thermal modelling of Facilities Pressure specified networks are a more physically realistic boundary Better inlet enthalpies and temperature drops across chokes QA the production profile early in design Before big decisions are made Facilities Focused Reservoir focused 11

12. Case Studies Corrosion Constrained Production Profiles The Cold Flow 12

13. Case Study 1; Minimising Pre-Investment for Corrosion A Base Project in FEED, to be designed for potential future fields The base project “Reservoir A” ~0.4mol% CO2 “Reservoir B” uncertain future tieback via A >30MMstb recoverable reserves ~7mol% CO2, i.e. Corrosion concerns How much pre-investment should we make? Corrosion Allowance vs uncertain additional reserves 13 Reservoir A Reservoir B

14. Case Study 1; Corrosion Rate Through Time Use a Facilities IPM to generate temperatures, CO2 concentrations phase rates, etc through life Corrosion expert calculated the corrsion rate rate at each timestep Rate changes due to changing composition, temperature etc Takes into account efficiency and availability Integrated through time to obtain the corrosion allowance 14

15. Case Study 1; Corrosion Allowance vs Oil Life of field production and corrosion scenarios for various Reservoir B abandonment dates: Calculates what each mm of corrosion allowance is “worth” through time 3mm of corrosion allowance is sufficient for A alone 11mm is required for A+B at max rate (additional 34MMstb) Only 8mm is required if B is abandoned in yr 13 (loss of ~3MMstb) Risked NPV required for optimum solution 15

16. Case Study 1; Conclusions Thermal issues were also a key concern High temperature good for Flow Assurance but bad for corrosion Hence it was important to be as “fair as possible” in the simulation Simulated wells rather than specified FWHT, etc A key input to corrosion models is the conc’ of CO2 in the gas phase It’s very easy to get this wrong Use the right equation of state (NRTL mixing rules on this job) Production Chemist must correct for Water chemistry (pH) Be careful how you generate high watercut compositions from dry HC Flashing and recombining at stock tank can artificially dilute the CO2 Water saturated at reservoir conditions should be used Get real Uncertainties in corrosion calculations and availability Continuous monitoring through life would help reveal remaining CA Recalculate reservoir B “abandonment date” during production Could adapt philosophy and shut in every time injection system down? Increase the effective availability in late life? Operator considered this to be a useful way to make the decision Was done whilst Subsurface IPM was looking at other issues 16

17. Case Study 2; Sintef Cold Flow System 17 Fully developed hydrate slurry flow in a recycle stream quenches production stream into the hydrate envelope Mixture must be in the hydrate envelope I.e. Hydrates from the recycle must survive Seed crystals on which new hydrates form, rather than at the wall The idea was to form dry hydrate crystals as soon as possible in the loop Wet hydrates are sticky Hydrates must be fully developed before the split

18. Case Study 2; Why A Facilities IPM Model? Adding the upstream and downstream systems to the flow loop How would cold flow affect the production profile? CAPEX saving vs Revenue losses Can’t be done in a stock tank rate look-up table based IPM tool Requires rigorous pressure/enthalpy tracking of fluids & hydrate model As gas and aqueous phase gradually turns into hydrates

19. Case Study 2; Why A Facilities IPM Model? Other practical issues How would the system behave through life (WC, rates, GORs changing) Line size, loop length, can we loose the heat? How to lift without gas? Is this really a subsea technology?

20. Case Study 2; Why A Facilities IPM Model? Topsides Equipment What to do with the slurry? Topsides heater duty to dissociate hydrates Again using Multiflash to model “latent heat” requirement

21. 21 Case Study 2; Hydrate Formation in Networks Snapshot of a five phase flowline Gas, Oil, Aqueous, Hydrates & Wax 40Mstb/d, 10% WC, 40°C at inlet 12inch pipe, uninsulated (FBE) U ~100W/m²/K Flowline enters wax then hydrate region Discontinuity in temperature gradient due to latent heat of hydrate formation Causes discontinuity in wax formation gradient Changes wax deposition profile Several kilometres for all the hydrate that will form to form Heat transfer the determining step Concurs with published results from OLGA hydrate kinetics model Twax THydrate

22. 22 Case Study 2; Economic Evaluation Generate Production Profile of new technologies and compare them to the existing E.g. Cold Flow not necessarily worse than insulated system; Higher liquid viscosities But lower velocities (less gas) Result; less frictional pressure drop The effect on topsides equipment can be evaluated too Example shows the additional topsides heating requirement to return the slurry into gas, oil and water Different CAPEX, OPEX, revenue, availability, etc Discounted cash flow analysis to investigate the potential

23. Case Study 2; Conclusions An early “real life” investigation of an R&D project can yield great results Sense check with other disciplines Compare to conventional technologies Highlight the technical issues that matter Focus the R&D Understand what cases it’s applicable for, which it isn’t Get a realistic understanding of the potential Such R&D programs should be aimed at adding models of their “widget” into concept design tools If not in Concept Select, with years before first oil, when would you select something as radical as cold flow? 23

24. Final Remarks IPM is an excellent way of investigating alternatives Facilities engineers can learn a lot from Subsurface regarding how to look at problems Fairly compare different options in dollars Value Maximisation rather than CAPEX minimisation Display technical issues through design life Makes issues easier to understand and easier to explain IPM means different things to different people Different ways to achieve IPM They are good at different things The Twin IPM approach has been invaluable on most of the front end projects I’ve worked on Speeding up design and decision making QA’ing the production profile 24