Decarbonization of offshore industry seen accelerating, but emissions likely persist for decades: panel
17th August 2021 07:08 GMT

Decarbonization of the global offshore industry is already underway and will likely accelerate as technology advances, but "significant" emissions may still come from the sector by 2050 – when many oil, gas and service/equipment companies have pledged to be at net-zero volumes, a top industry researcher said Aug. 16.

But advances in subsea systems, electrification and associated natural gas management could reduce that substantially, helping to bring industry to within sight of its net-zero goal by mid-century, Amy Bowe, head of carbon research for energy consultants Wood Mackenzie, said at the opening panel of the Offshore Technology Conference 2021 in Houston.

Offshore emissions currently account for about 21% of the 1,700 Mt of CO2 equivalent total global upstream emissions, and Wood Mac estimates they will grow about 8% out to 2027, Bowe said.

Some of the decline after that is just "lack of visibility" for projects and some is concerted corporate efforts to reduce emissions, she said. But industry will likely still emit 360 Mt of CO2e emissions overall by 2050, although it is "likely" the figures will change as companies take a variety of mitigation steps and new technologies emerge, she added.

"Emissions from industry are growing at a slower pace than production," Bowe said. "Per unit of oil and gas produced, emissions will decline 6% on average by 2027."

Also, offshore emissions intensity is expected to decrease 14% over the same time period, led by conventional Continental Shelf assets, which are expected to decline in emissions intensity by 8% in absolute numbers, even as that production grows 8%.

As for deepwater, even now it is one of the least intensive emissions sectors globally, while conventional (shallow) offshore more ranks on a par with the global average, said Bowe.

Offshore emissions intensity regionally differs according to variations in reservoir quality, hydrocarbon composition and quality, an asset's maturity and market conditions, she said.

Big emitting assets contain high gas volumes

 

Higher-emissions intensity assets all have high volumes of CO2 gas, such as in LNG projects, she said –-- for example, projects in Indonesia, Malaysia and Australia. However, in regions such as the US Gulf of Mexico and Russia's offshore even large natural gas fields are less intensive to produce than oil.

Subsea technology is increasingly deployed today, especially owing to development of tied-back fields near existing production hubs, and there is a high potential to expand these developments as industry moves to full subsea "factories" combining subsea compression, boosting, separation and reinjection, said Bowe.

Decarbonization technologies can provide operational and financial benefits – higher revenues, increased production, longer production lifespans, lower costs and less tangible but important benefits of greater safety and smaller environmental footprints.

Even oilfield services and equipment providers are working on emissions-reduction projects.

Technip FMC, an oilfield provider specializing in offshore and harsh environment technologies, is currently working on an energy system it calls Deep Purple which "combines offshore renewable energy as input and produces green hydrogen," according to Jonathan Landes, the company's president of subsea.

"Effectively we're taking renewable input and when there's more energy input than what's needed, hydrogen is produced and converted and stored subsea," Landes said. "When renewable energy input drops below what's demanded, we reconvert that hydrogen back to electricity."

Typically hydrogen can store more than 15 times the megawatt hours than the largest tank battery that's offered today, he said.

Of course, carbon capture and storage projects are becoming more plentiful – at least they are being looked at and planned. Occidental Petroleum has a large project aimed at the Permian Basin, but other projects are also planned by smaller E&P producers such as Gulf of Mexico operator Talos Energy along the US Gulf Coast and even small California Resources Corporation contemplated for its key basins in that state.

 

Electrification's mitigation potential

 

Also, "electrification offers one of the greatest potentials for mitigation but it's not feasible in all offshore environments – at least not without significant advancement of floating wind or other renewable technologies," Bowe said.

The potential impact size that those technologies can have may be large. Bowe said they vary from 15% emissions reductions at the Lula-Iracema field offshore Brazil to almost 90% at the Johan Sverdrup field offshore Norway's Continental Shelf.

Johan Sverdrup operator Equinor's website said the field, which came on stream in October 2019, is expected to increase daily production to 535,000 boe/d in mid-2021 and 720,000 boe/d after 2022, with CO2 emissions only 4% of the world average.

Average emissions for every barrel of oil produced worldwide totals about 18 kg of CO2, Equinor said, compared with the average on Norway's Shelf of 8 kg.

Bill Langin, Shell's senior vice president of deepwater exploration, noted his company recently sanctioned the Whale development in the remote US Gulf of Mexico deepwater which will utilize energy-efficient gas turbines and compression systems,

The major has said its production in the US Gulf is among the lowest greenhouse gas intensity in the world for producing oil.

In addition, Shell is currently drilling an appraisal well at Blacktip, a nearby discovery, Langin said, with results expected later this year. Blacktip and Leopard, another nearby find made in 2021, "will be looked at later this year ... to see if they can be taken to lowest-cost, lowest-carbon development."

"Whether those discoveries are produced through the Whale hub, after its production begins to decline in coming years or through Perdido, "still remains to be seen," he said. "We’ll need a couple of more appraisal wells to make that decision."


Bunkerworld .,
17th August 2021 07:08 GMT