Solar Enhanced Oil Recovery: Myth and Reality in Solar EOR

Solar Thermal for Oil Production
and Industrial Process Heat
Steven Geiger
Director of Business Development, Solarlite
MENA New Energy Conference, Dubai, April 25-26, 2017

Summary
• Thermal EOR faces challenges from insufficient gas supply &
carbon risks
• Solar steam can help reduce EOR cost, emissions, and risks
• Solarlite provides the lowest-cost, highest-quality steam for EOR
• Solar EOR can also advance economic diversification, local job
creation, and a better environment
• Common equipment allows faster cost reductions
- 1 -

What is SEOR?
Solar Enhanced Oil Recovery (SEOR): generating cheaper steam with
solar mirrors for standard thermal EOR projects
Standard
Steam
Boilers
(OTSG)
Solar mirrors
simple tie-in to common steam
header
uses standard oilfield water
Oil + water
Separator
Steam in reservoir
Can reduce natural
gas consumption by
100%, but 25% is
initial target
- 2 -

SEOR solves multiple problems
• Oil reserves getting heavier and harder to extract
• Many countries lack surplus gas (must burn diesel or crude)
• Lowers EOR costs
• Reduces fuel price volatility (often 60% of total EOR costs)
• Reduces carbon tax risk and gas hedging, making SEOR $3-4/barrel
more competitive than traditional thermal EOR
SEOR offers $2-4/mmbtu gas equivalent price with
zero volatility and zero emissions.
- 3 -

Using two highly-proven & bankable technologies
Solar mirrors
producing steam
Steam EOR
CSP power plant
Egypt 1912
CSP power plant
Morocco 2015
$3 billion bankfinanced
60 years’ of continuous
steamflood EOR
2 billion barrels of oil recovered
from just one field
- 4 -

Key SEOR markets
SEOR requires:
• heavy oil
• high solar DNI
• Lack of very cheap fuel, or possible carbon price
70% of immediate market is in 4 countries:
• Kuwait
• Oman
• California
• Partition zone (Saudi/Kuwait)
- 5 -

Kuwait
Kuwait dry natural gas 2001-2013 (bcf)
consumption
• Major plans for SEOR; short on gas;
importing >3 mln MT LNG.
production
LNG
imports
• Needs heavy oil as light oil declines
• $75 bln heavy-oil program
X
• KOC plans 270,000 bpd new heavy oil
production by 2023, requiring 0.9
million bpd steam (19 GWth @ 100%
SEOR)
Kuwait
oil fields
• Solarlite won open tender to supply 1 st
SEOR project to KOC
- 6 -

Oman
Oman oil production 1996-2015 (kbpd)
EOR
increasing
production
• Declining oil production -> aggressive
EOR
• World EOR leader, applying multiple
technologies (steam, miscible,
chemical, SEOR)
• Gas-constrained; LNG exports may
stop by 2024
• Currently building 1 GWth SEOR
• >5 GWth SEOR possible by 2022
- 7 -

California
600
California thermal EOR production
(2015, kbpd)
• 370,000 bpd oil requiring ~1.4 mln
bpd steam
500
400
80
Oil
Steam
• Gas price

Four main possible technologies
Parabolic
trough
Linear
fresnel
Glasshouse
Solar tower
Standard
High-efficiency composite (Solarlite)
- 9 -

Key requirements for solar EOR systems
• Direct steam generation
• Wind resistance
• Reasonable cleaning requirements
• Flexible, modular design
• Low-cost steam
- 10 -

Why Solarlite is the SEOR leader
Process Advantage
*
• Solarlite pioneered Directsteam
generation (DSG) and
built world’s-1 st commercial
DSG power plant
• Higher temperatures (550 C
vs. 300 C)
• Up to 100% steam quality vs.
85% for standard OTSG
• Safe & clean: only water
• Most solar thermal
companies use synthetic oil:
lower temperature limits
and unacceptable HSE/fire
hazard in a live oilfield
*actual CSP plant fire (Daggett, CA)
• Modular blocks better
suited to tight oilfield
• Simply connect to
common steam header
• Greatly minimizes
execution risk
• Modular for any size
- 11 -

Why Solarlite is the SEOR leader
Technology Advantage
• Lightweight, rigid trough =
excellent wind performance
• Thin mirror = higher
reflectivity (>96%) & total
efficiency (76.1%)
• Composite = lower cost
• Patents and IP protection
• Custom DSG receiver
• Selective coating = greater
spectral absorption,
efficiency
• Lower thermal losses =
cheaper steam
• Electro-hydraulic drive
• Greater accuracy
• Fail-safe independent
power
- 12 -

Why Solarlite is the SEOR leader
Cost Advantage
Competitors suffer from:
+
Low-cost DSG
Lightweight,
rigid trough
HSE risks
Poor wind performance
(De-focusing & twisting)
+
=
Low losses,
high efficiency
+
Excellent wind
performance
Lowest-cost, reliable steam
$2-4/mmbtu gas equivalent
20% loss from
row shading
X
X
Low efficiency & high losses
from design limitations
10% loss
from glass
10% loss from
poor reflector
- 13 -

Why Solarlite is the SEOR leader
• Selected by KOC in November 2015 in an open
tender to build Kuwait’s first solar EOR project
• Beat all competitors including Abengoa,
Glasspoint, TSK, and others
• Solar steam is essential to Kuwait’s $75 billion
strategic heavy oil program, offering Solarlite a
substantial opportunity
- 14 -

Comparison of SEOR technologies
Criteria
Solarlite
trough
Standard
CSP trough
Fresnel
Glasshouse
trough
Comments
Shading losses by structure low low low high Glasshouse structure reduces efficiency by 10%
Shading losses by design low low moderate very high Glasshouse shading reduces efficiency another 20%
Direct Steam Generation
(High Pressure)
Proven to
110 bar
unproven
Proven at
50 bar
Proven to
100 bar
Commercial DSG experience is critical for SEOR
Commercially-deployed DSG yes pilot yes pilot Commercial DSG experience is critical for SEOR
High Temperature
Proven to
550C
oil limit
390C
Proven to
500C
proven to
312C
Wind impact low high moderate very low
Higher temperatures more valuable in EOR
CSP troughs de-focus/break in high winds, Fresnel
mirrors also shake and de-focus
Dust collection low low moderate high Fixed glasshouse collects 3-5x dust of moving trough
Cleaning & abrasion easy/low easy/low moderate moderate
Fresnel mirrors located in sand abrasion zone
Daily cleaning = daily abrasion
Sand erosion low moderate moderate low Composite trough protect the mirrors
Modular design Yes No Yes Yes Required for tight oilfield spaces
Vacuum receiver Yes Yes possibly No
Vacuum receivers increase efficiency (less heat
losses)
Existing desert application Yes Yes Yes Yes
Troughs installed in UAE, Egypt, Spain, Morocco,
USA deserts
Cost of steam lowest high Medium high Rigid troughs + high efficiency = lowest steam cost
- 15 -

Solarlite produces the lowest-cost steam
Head-to-head comparison with Glasspoint’s 1 GWth project in Amal, Oman
Solarlite Solarlite
Glasspoint (same size)___ (same price)
Project size: 1021 MWth 1021 MWth 1090 MWth
Project price: $600 Million $560 Million $600 Million
MT steam per day: 6000 MT 8700 MT 9290 MT
Solarlite systems are 45% more efficient and
produce 55-70% more steam for the same price.
Why burden your company / country with uncompetitive oil production?
- 16 -

Solarlite’s modular design is best for tight oilfield spaces
- 17 -

Myth and Reality in Solar EOR
• Many myths & deceptions created about SEOR
• Creates unnecessary confusion in oil community
• Damages the advancement of SEOR
- 18 -

SEOR Myth #1
“Open solar fields can’t survive harsh desert conditions”
Fact
• CSP was designed to work in open harsh deserts
• Plants working normally in California, Spain, and UAE deserts
• the largest Middle East desert solar thermal plant is operating
normally (SHAMS 1 in Abu Dhabi, 300 MWth)
- 19 -

SEOR Myth #2
“CSP can’t operate in high desert wind conditions”
Fact
Solarlite operates efficiently up to 20 m/s windspeed (72 km/h)
and survives 45 m/s windspeed (162 km/h)
5 years of data from
Spanish desert plant
independently managed
by DLR
Here Solarlite temp
proves stable at 400C
with winds up to 10 m/s
- 20 -

SEOR Myth #3
“Dust and cleaning are such a problem in desert conditions”
Fact
• Cheap & trivial
• Low-water
• Robot cleaning
• Only 1x per week
- 21 -

SEOR Myth #3
“Dust and cleaning are such a problem in desert conditions”
• Remember, troughs spend most their life upside-down or vertical
• In contrast, roofs are a dust magnet requiring daily cleaning (abrasion)
x
Glasshouse
50-60% of time 10-15% of time
24/7 dust depositing
- 22 -

Additional sand and dust control measures
• A combined wind+dust fence is
used where extreme dust control
is required
• Further reduces wind load on
solar collectors, allowing full steam
production in high wind speeds
• Cleaning intervals are significantly
reduced (once per week)
- 23 -

SEOR Myth #4
“Glass is cheap, so a glasshouse can make cheaper steam”
Example: 1 GWth project in Amal, Oman
Solarlite Solarlite
Glasshouse (same size)___ (same price)
Project size: 1021 MWth 1021 MWth 1090 MWth
Project price: $600 Million $560 Million $600 Million
MT steam per day: 6000 MT 8700 MT 9290 MT
Fact
Solarlite troughs produce 55-70% more steam
for the same price (and higher quality steam)
- 24 -

Side note
Haven’t we seen this movie play out before in solar PV?
Remember 2007-2008?
• High polysilicon prices force search for alternatives
• $ billions invested in low-efficiency glass solutions (CIGS, CIS, a-Si, CdTe)
based on a “glass is cheap” story
What happened? Higher-efficiency PV absolutely crushed the lowefficiency
glass-based solutions.
And now history is repeating itself in solar thermal.
- 25 -

SEOR Myth #5
“Glasshouse design offers smallest SEOR footprint”
Glasshouse footprint
300 Ha
6000 MT steam/day
Land efficiency:
0.05 Ha/MT steam/d
Solarlite footprint
216 Ha
6000 MT steam / day
Land efficiency:
0.036 Ha/MT steam/d
Fact
Solarlite uses only 72% the land required by a glasshouse
- 26 -

Proven steam leadership in commercial plants
Solarlite TSE-1 : World’s first commercial CSP power
plant with Direct Steam Generation using PT
• Electrical power: 5 MWe nominal
• Solar field thermal capacity: 19 MWth nominal
• Live steam temperature: 330 °C
• Live steam pressure: 30 bar
• Yearly Output: 7 to 9 GWh e (Solar radiation varies
annually: up to ± 10 %)
• Peak efficiency (solar to electric): 18%
• Solar field area: 12 ha; Power block: 2.4 ha
- 27 -

Proven high-temp & high-pressure steam generation
Solarlite DUKE / DISS facility in Spain
• Direct steam generation running at 400-500°C and 110 bar since 2012
• 5 years of data, independently operated by experts (DLR of Germany)
• Proven high-wind performance
- 28 -

Solarlite reference projects
Project description
Year
Photo
Capacity
Location
Type
DUKE – 1 st DSG
High temperature
Parabolic Trough
2012
2,5
MWth
Spain
Almeria
Research
World’s 1st
commercial DSG
CSP Parabolic
Trough Power Plant
2011
19
MWth
5 MWel
Kanchanaburi
Thailand
Commercial
Solar – Biomass
Power Plant with
solar Cooling
2009
2012
500
kWth
Phitsanulok
Thailand
Research
First commercial
Parabolic Trough
Plant in Germany –
combined with
Biomass
2007
220
kWth
Woltow Duckwitz
Germany
Commercial
- 29 -

Wind-proof construction and robust components
The torsion pipe allows
continuous operation
under high wind loads.
←
→
The solid composite
structure creates a rigid
parabolic body, using
less steel & allowing
superior optical focus
and efficiency (76.1%)
even in high winds due
to superior handling of
torsional loads.
- 30 -

Wind-proof construction and robust components
Other CSP designs
are sensitive to wind
loads.
←
→
Solarlite composite
troughs and
components
withstand high
winds and sand
abrasion.
- 31 -

Ultra-rugged equipment, extreme testing
• a 1 kg rock was thrown at Solarlite mirrors
• only localized cracks, easily repaired
• no effect on performance
• no possible damage possible to receivers (mirror sticks to trough)
• Warning: do NOT try this on a glasshouse or regular CSP mirrors
5 cm diameter crack
- 32 -

Desert-ready, sand-proof construction with 30-year life
• Solarlite troughs are manufactured with
epoxy resin and glass fibers to create the
highest stiffness and highest UV stability.
The FRP material is completely covered
with UV and scratch-resistant coating.
• Longevity is > 30 years with excellent
resistance to heat and moisture.
• The material has a long track record
surviving extreme conditions in ocean
boats, yachts and surf boards.
- 33 -

Easy management of sand accumulation and sand storms
• Sand accumulation is common, caused by drifting wind and sand storms
• Solid base of the wind fence prevents sand accumulating inside the solar field,
and protects troughs from high winds
• Sand is easily removed from the fence base periodically
• Largest operating solar thermal plant in a windy GCC desert uses a similar
solution (300 MWth SHAMS1 in Abu Dhabi)
Source: Shams Power Company
- 34 -

The BIG PICTURE: the greater thermal universe
• Same equipment
SEOR
• Each a >50-500 GWth market
• Scale economy accelerator:
each benefits from scale
achieved by the others
CSP
SIPH*
* Solar industrial process heat
- 35 -

U.S manufacturing process energy
Source: NREL, 2015
- 36 -

U.S. industrial steam usage by temperature
Potential market for Solarlite
Source: NREL, 2015
- 37 -

Best to start where there is a lot of sun
- 38 -

California high DNI and gas costs allow solar industrial steam
Source: NREL, 2015
- 39 -

Cost
The BIG PICTURE: the greater thermal universe
Scale . . . creates SCALE . . .
creates SCALE
Today
SEOR: $3-3.50/mmbtu
CSP: 8c/KWh-e
SIPH: 1.4c/KWh-th
SEOR: $2.50/mmbtu
CSP: 6c/KWh-e
SIPH: 1-1.4c/KWh-th
SEOR: $1.75/mmbtu
CSP: 4-5c/KWh-e
SIPH: 0.7-1.4c/KWh-th
GWth
3-5 10
- 40 -

Join the solar steam leader &
lock in the lowest cost
possible for thermal EOR!
www.solarlite.de
- CONFIDENTIAL -