Sulphur Industry News

Sour gas reinjection resumes at Kashagan

Kazakhstan’s oil and condensate output increased by 7% from 1.79 million bbl/d to 1.92 million bbl/d in early June after sour gas reinjection operations resumed at the Kashagan offshore oil and gas development following a recent outage, according to the Kazkah Energy Ministry. Reinjection of sour gas into two wells resumed on 8th June, enabling operator the North Caspian Operating Company (NCOC) to boost oil and condensate production at a large artificial island in Kazakhstan’s Caspian Sea waters. Reinjection was paused on May 20th following the detection of sour gas during routine sampling and a subsequent integrity test. Kashagan normally produces about 300,000 barrels of oil per day. Kazakhstan expects Kashsgan to raise oil production this year to 18.2 million t/a from 12.7 million t/a in 2022.

In spite of this, state oil producer KazMunayGaz has reported declining revenues and profits. 1Q 2023 revenues fell by 14% to $4.24 billion, while net profit declined by 13% compared to the same period of 2022 in site of a 9% rise in oil and condensate production to more than 500,000 bbl/d. KazMunayGaz says that it has been able to export crude via the Russian ports of Novorossiysk and Ust-Luga at a significant premium to Russia’s Urals export blend, even though Kazakh oil commingles with Russian crude once it enters the country’s pipeline network, and has the same density and sour content as Urals, and there are no restrictions on Kazakhstan’s oil shipments from Russian ports, with Kazakh crude labelled Kebco to differentiate it from Urals.

Kazakhstan has also said that it plans to change the terms of oil and gas production sharing agreements with foreign majors that operate the three largest developments in the country in a bid to raise more tax.

Kazakh Prime Minister Alikhan Smailov said the government is creating a special joint group to work out proposals to amend existing PSAs to be discussed with international partners on the Tengiz, Kashagan and Karachaganak fields. The group will be led by the Ministry of Energy, and will include representatives of other ministries, the parliament, state investment holding Samruk-Kazyna and KazMunayGaz.

TAIWAN

Quality award for gas scrubbing system

CPC Taoyuan received the 22nd Public Construction Golden Quality Award for the successful startup and continuous operation of its new wet gas scrubbing system for flare gas desulphurisation. CPC partnered with Mascol Engineering and Elessent Clean Technologies for the design and provision of the MECS® DynaWave® system, which features reverse jet scrubbing nozzles designed to remove hydrogen sulphide and waste water chemical oxygen demand using high efficiency soda scrubbing. A typical Claus sulphur recovery unit only recovers 95%-98% of sulphur present. The DynaWave® scrubber is an open duct in which scrubbing liquid is injected through a non-restrictive reverse jet nozzle, counter current to the dirty inlet gas. Liquid collides with down-flowing gas to create the “froth zone,” a region of extreme turbulence with a high rate of mass transfer, and this froth zone technology allows for desulphurisation in a wet gas environment, delivering over 99.9%+ sulphur removal.

Eli Ben-Shoshan, Elessent CEO, said of the project, “We are delighted to be a part of this project and to assist CPC Taoyuan with emissions regulations compliance… We are committed to providing clean solutions that are specifically designed to address the demands of the oil and gas industry and reduce the environmental impact of refineries on the environment.”

For sulphur recovery unit (SRU) tail gas cleaning, the DynaWave® technology makes it possible to quench incinerated gas, remove potential sulphur particulate entrainment, and absorb SO2 . The technology offers high turndown capabilities and the unique flexibility of handling extremely high SO2 concentrations when conventional tail gas treatment units (TGTUs) are bypassed during start-up, maintenance, or unexpected outages, ensuring uninterrupted SRU operation with guaranteed low emissions at all times.

CANADA

S&P forecasts increase in oil sands production

Higher crude prices and continued optimisation improvements have driven the first upward revision to the S&P Global Commodity Insights 10-year oil sands production outlook in more than half a decade.

The new forecast, produced by the S&P Global Commodity Insights Oil Sands Dialogue, expects Canadian oil sands production to reach 3.7 million barrels per day (bbl/d) by 2030; 0.5 million bbl/d higher than today. The new projection represents an increase of 140,000 b/d in 2030 from the previous outlook.

“Higher oil prices have driven record returns for the Canadian oil sands,” said Celina Hwang, Director, North American Crude Oil Markets, S&P Global Commodity Insights. “Although producers continue to demonstrate capital discipline, stronger balance sheets are now giving oil sands companies renewed confidence in regard to their intentions for capital spending.”

The main driver of the upward revision has been the identification of additional opportunities to improve efficiency and/ or optimise output, the analysis says. The ongoing ramp-up and operational efficiency gains from learning by doing and step-out optimisation projects are the most significant contributors. Step-out optimisations are a relatively new phenomenon and include, as the name suggests, stepping out from existing operational areas into new high quality adjacent lands.

Capital expenditures for oil sands production in 2022 reached their highest levels since 2015 and could rise further this year. However, most of that increase occurred to offset increased inflation and there has not been a resurgence in large-scale greenfield or even brownfield oil sands projects, the analysis says.

“The Canadian oil sands have entered an ‘era of optimisation’,” said Kevin Birn, Vice President, Canadian Oil Markets Chief Analyst, S&P Global Commodity Insights. “Learning by doing and step-out optimizations account for nearly 90% of our overall production outlook. The remainder of additions are expected to come from yet another form of optimisation – debottlenecking projects. Optimisations now dominate the oil sands production growth outlook.”

A deceleration in growth is expected to begin around the mid to late 2020s, but a very shallow decline only begins to emerge in the early 2030s.

DENMARK

Sustainable aviation fuel plant on track for 2026

Arcadia eFuels, a leading developer of green fuels has signed a license agreement with Sasol and Topsoe for Arcadia’s Vordingborg eFuels plant. The agreement represents a major milestone ahead of Arcadia’s final investment decision. Once operational, the plant will deliver green fuels for the Danish and European aviation markets to help meet the European Union mandate of 1.2% Renewable Fuels of non-Biological Origin in 2030.

Amy Hebert, CEO of Arcadia eFuels, said: “We’re pleased to conclude this license and engineering agreement with two best in class companies acting as a single point licensor. Their commercial experience in syngas, Fischer Tropsch and refining technology development and licencing combined with Arcadia’s novel engineering approach allows us speed to market. Meeting the needs of the aviation and heavy transportation industry’s decarbonization efforts is of high priority for Arcadia.”

NIGERIA

Dangote Refinery commissioned

A commissioning ceremony was held at the end of my for the 650,000 bbl/d Dangote Petroleum Refinery and petrochemicals plant, presided over by outgoing Nigerian president Muhammadu Buhari. The Dangote Refinery is Africa’s largest oil refinery and the world’s largest single-train facility. It will also integrate refining with petrochemical production, producing not only various petroleum products but also polypropylene and polyethylene. The refinery will meet 100% of Nigeria’s requirements for refined products as well as having a surplus for export, creating a market for $21 billion per annum of Nigerian crude. Nigerian crude oil typically has an API gravity between 28 and 42. Lighter crudes are easier to refine as they contain fewer impurities and require less energy for processing. It is also known for its low sulphur content, which makes it desirable for refining. Low sulphur content reduces the emissions of sulphur dioxide (SO2) during combustion, helping refineries comply with environmental regulations.

Despite having a refinery nameplate capacity that can meet nearly all of its domestic demand, Nigeria, the largest oil producer in Africa, is fully reliant on imported petroleum products to meet domestic demand because its state-owned refineries have been shut in for long-term maintenance or rehabilitation since 2020.

KUWAIT

Al Zour to reach capacity by end of the year

Kuwait’s Al-Zour refinery has restored full operation of crude distillation units 1 and 2, with output back up at 345,000 bbl/d, up from 205,000 bbl/d in April. The third CDU is expected to be ready by the end of 2023, bringing production to the refinery’s full capacity of 615,000 bbl/d, according to Kuwait Integrated Petroleum Industries Co (KIPIC). KIPIC said in April that its CDUs 1 and 2 were offline temporarily due to a technical problem. The second CDU had only started up operation in early March. However, the CDU 3 planned startup by the year’s end is reported to be a “more cautious prediction” than earlier plans for it to be operating by around July.

CHINA

PetroChina producing sour gas from Tieshanpo

PetroChina says that it has begun sour gas production at the Tieshanpo block in the southwestern province of Sichuan. The field was abandoned by Chevron in 2019. PetroChina is aiming to tap the high H2 S content (14.2-15.5%) reserves to boost gas production as part of its energy transition drive. Six production wells have been drilled so far, able to produce 1.71 million cubic metres per day of gas. In the long run, it will add three more production wells at Tieshanpo. The development includes one new dehydration station, two gas collection well stations, one handover metering station and an export pipeline extending 17.3 kilometres, PetroChina said. The two-train gas plant at Wanyuan city is able to treat 4 million m3 /d of gas.

Gas production at Tieshanpo is running six months behind the initial schedule because of safety measures to prevent leaks. PetroChina has put in place a simultaneous leakage monitoring and emergency support system by using fixed gas detectors and a cloud-mounted laser leakage monitoring system in the gas gathering and transportation facilities, as well as infrasonic leak detection, distributed optical fibre acoustic sensing and distributed optical fibre temperature sensing.

Tieshanpo is part of the Chuandongbei sour gas complex, which includes the Dukouhe, Qilibei and Luojiazhai assets. PetroChina brought in Chevron as a partner at the Chuandongbei sour gas project in 2007 after several incidents highlighted its need for expertise in handling the high sulphur content gas. Chevron has a 49% non-operated interest in the Luojiazhai play, which is already in production, but relinquished its interests in the Tienshanpo, Dukouhe and Qilibei natural gas plays four years ago.

UNITED ARAB EMIRATES

Bids in for Hail and Ghasha

Expressions of interest are in for the latest EPC tendering round for the massive Hail and Ghasha sour gas development after ADNOC began a new tender round for the project in April, following the cancellation of the pre-construction services agreements (PCSAs) that had been awarded in January, reportedly due to cost constraints. Firms were initially asked to express interest in the new EPC tendering round by 14 May, later extended until 19 May. ADNOC’s execution strategy for the development has now been divided into three packages: subsea pipelines, umbilicals, cables, risers and other offshore structures; offshore drilling centre facilities, the Ghasha offshore processing plant and central living quarters; and the Manayif onshore processing plant, including offsite export pipelines and tie-ins, utilities, the main control building and process buildings. Work on a Ruwais sulphur-handling terminal and other non-process buildings is an optional scope for this package.

ADNOC holds the majority 55% stake in the Ghasha concession, along with Eni (25%), Wintershall (10%), OMV (5%) and Lukoil (5%). Production is targeted at 1.5 bcf/d of sour gas from the Ghasha concession by the middle of this decade. Four artificial islands have already been completed in the Ghasha concession, and development drilling is under way.