1. Lessons Learned from Natural Gas STAR Offshore Technology Transfer Workshop Shell, GCEAG, API, Rice University and EPA’s Natural Gas STAR Program June 8, 2004 Partner Reported Offshore Methane Emissions Reduction Opportunities

2. Page 2 Reducing Emissions, Increasing Efficiency, Maximizing Profits Offshore PROs: Agenda p Introduction to Partner Reported Opportunities (PROs) and Lessons Learned p Selected PRO Overviews p DI&M p DI&M Industry Experience p Discussion Questions

3. Page 3 Reducing Emissions, Increasing Efficiency, Maximizing Profits Why Are Partner Reported Opportunities (PROs) Important? p Partner Annual Reports document Program accomplishments u BMPs: The consensus best practices u PROs: Partner Reported Opportunities p Simple vehicles for sharing successes and continuing Program’s future u Lessons Learned: Expansion on the most advantageous BMPs and PROs u PRO Fact Sheets u Technology Transfer Workshops u Posted on www.epa.gov/gasstar

4. Page 4 Reducing Emissions, Increasing Efficiency, Maximizing Profits Why Are Partner Reported Opportunities (PROs) Important? p Many production facilities have identified practical, cost-effective methane emissions reduction practices p Production partners report saving 187 Bcf since 1990, 80% from PROs p Vapor recovery units (VRUs) account for 30% of PRO emissions reductions

5. Page 5 Reducing Emissions, Increasing Efficiency, Maximizing Profits Gas STAR PRO Fact Sheets p 14 PROs apply to offshore operations u From 38 PROs applicable to production  12 focused on operating practices  26 focused on technologies p PRO Fact Sheets are derived from Annual Reports 1994-2002 uTotal 56 posted PROs at epa.gov/gasstar/pro/index.htm

6. Page 6 Reducing Emissions, Increasing Efficiency, Maximizing Profits Gas STAR Lessons Learned Studies p7 Lessons Learned studies are applicable offshore uFrom 10 applicable to production  2 focused on operating practices  8 focused on technology pAll 16 Lessons Learned studies are on Gas STAR web site uwww.epa.gov/gasstar/lessons.htm

7. Page 7 Reducing Emissions, Increasing Efficiency, Maximizing Profits Lessons Learned Studies for Offshore Operations p Installing Vapor Recovery Units on Crude Oil Storage Tanks p Optimize Glycol Circulation and Install Flash Tank Separators in Dehydrators p Options for Reducing Methane Emissions from Pneumatic Devices in the Natural Gas Industry p Convert Gas Pneumatic Controls to Instrument Air p Reducing Emissions When Taking Compressors Off- Line p Replacing Gas-Assisted Glycol Pumps with Electric Pumps p Replacing Wet Seals with Dry Seals in Centrifugal Compressors

8. Page 8 Reducing Emissions, Increasing Efficiency, Maximizing Profits More Opportunities Reported by Partners p Replace Gas Starters with Air p Replace Ignition – Reduce False Starts p Install Electric Starters p Rerouting of Glycol Skimmer Gas p Convert Gas-driven Chemical Pumps to Instrument Air p Pipe Glycol Dehydrator to Vapor Recovery Unit p Convert Pneumatics to Mechanical Controls p Install Electronic Flare Ignition Devices p Install Ejector p Inspect & Repair Compressor Station Blowdown Valves p Install BASO ® Valves p Use Ultrasound to Identify Leaks p Test and Repair Pressure Safety Valves p Begin DI&M at Remote Facilities

9. Page 9 Reducing Emissions, Increasing Efficiency, Maximizing Profits Examples of Technology Enabled PROs p PROs enabled by instrument air system u Replace Gas Starters with Instrument Air u Convert Gas-Driven Chemical Pumps to Instrument Air p PROs enabled by glycol dehydrators u Reroute Glycol Skimmer Gas u Reroute Glycol Dehydrator to Vapor Recovery p PROs enabled by electric power u Install Electric Starters

10. Page 10 Reducing Emissions, Increasing Efficiency, Maximizing Profits Replace Gas Starters with Air p What is the Problem? u Pressurized gas used to start engines is exhausted to atmosphere p Partner Solution u Replace gas with compressed air p Methane Savings u Based on one 3,000 HP reciprocating compressor with 10 start-ups per year p Applicability u All natural gas pneumatic starter motors u Needs electric power to run air compressor Methane Savings 1,356 Mcf/yr Project Economics Project Cost < $1,000 Annual O&M Costs $100 - $1,000 Payback < 1 yr

11. Page 11 Reducing Emissions, Increasing Efficiency, Maximizing Profits Convert Gas-Driven Chemical Pumps to Instrument Air p What is the Problem? u Circulation pumps powered by pressurized natural gas vent methane p Partner Solution u Replace natural gas with instrument air to power pumps p Methane Savings u Based on one gas assisted glycol pump for a 10 MMcf/d gas dehydration unit p Applicability u Can use surge capacity of existing instrument air system u Need electrical power if new instrument air compressor is installed Methane Savings 2,500 Mcf/yr Project Economics Project Cost $1,000 - $10,000 Annual O&M Costs $100 - $1,000 Payback < 1 yr

12. Page 12 Reducing Emissions, Increasing Efficiency, Maximizing Profits PROs for Glycol Dehydrators p Dehydrators present an excellent opportunity to reduce emissions p How much methane is emitted? u A 20 MMcf/d dehydrator with no flash tank separator (FTS) and a gas pump can produce 7,600 Mcf/yr of losses p How can these losses be reduced? u Lots of choices…install a flash tank separator, convert gas pump to electric pump and adjust glycol circulation rate

13. Page 13 Reducing Emissions, Increasing Efficiency, Maximizing Profits Reroute Glycol Skimmer Gas Methane Savings 7,600 Mcf/yr Project Economics Project Cost <$1,000 Annual O&M Costs $100 - $1,000 Payback < 1 yr p What is the Problem? u Gas from condensate separator is vented to atmosphere p Partner Solution u Reroute condensate separator gas for fuel use p Methane Savings u Based on 20 MMcf/d dehydrator with no FTS, circulating 300 gph p Applicability u All dehydrators with vent condensers u Small footprint u Condensate separator must operate at higher pressure than the gas destination

14. Page 14 Reducing Emissions, Increasing Efficiency, Maximizing Profits Pipe Glycol Dehydrator to Vapor Recovery Methane Savings 3,300 Mcf/yr Project Economics Project Cost $1,000 - $10,000 Annual O&M Costs > $1,000 Payback < 1 yr p What is the Problem? u High pressure gas used to drive gas assist glycol pump is vented p Partner Solution u Reroute gas from reboiler stack condenser vent to a VRU p Methane Savings u Based on 10 MMcf/d gas dehydration unit with FTS, condenser and gas assist pump p Applicability u Can use excess capacity of existing VRU u Small footprint

15. Page 15 Reducing Emissions, Increasing Efficiency, Maximizing Profits Install Electric Starters p What is the Problem? u Pressurized gas used to start engines is exhausted to atmosphere p Partner Solution u Replacing starter expansion turbine with electric motor starter p Methane Savings u Based on one engine starter, ten start-ups per year and methane leakage through gas shut-off valve p Applicability u All sectors of gas industry u Access to electrical power supply Methane Savings 1,350 Mcf/yr Project Economics Project Cost $1,000 - $10,000 Annual O&M Costs < $100 Payback 1- 3 yrs

16. Directed Inspection & Maintenance

17. Page 17 Reducing Emissions, Increasing Efficiency, Maximizing Profits What is the Problem? p Gas leaks are invisible, unregulated and go unnoticed p STAR Partners find that valves, connectors, compressor seals and open-ended lines (OELs) are major sources u 27 Bcf methane emitted per year by reciprocating compressors seals and OELs u Open ended lines contribute half these emissions p Facility fugitive methane emissions depend on operating practices, equipment age and maintenance

18. Page 18 Reducing Emissions, Increasing Efficiency, Maximizing Profits How Can These Losses Be Reduced? p Implementing a Directed Inspection and Maintenance (DI&M) Program Source: CLEARSTONE ENGINEERING LTD

19. Page 19 Reducing Emissions, Increasing Efficiency, Maximizing Profits What is a DI&M Program? p Voluntaryprogram to identify and fix leaks that are cost-effective to repair p Voluntary program to identify and fix leaks that are cost-effective to repair p Outside of mandatory LDAR p Survey cost will pay out in the first year p Provides valuable data on leakers

20. Page 20 Reducing Emissions, Increasing Efficiency, Maximizing Profits How Do You Implement a DI&M Program? SCREEN and MEASURE leaks Estimate repair cost, FIX to a Payback criteria PLAN for future DI&M Record savings/REPORT to Gas STAR CONDUCT baseline survey FIX on the spot leaks

21. Page 21 Reducing Emissions, Increasing Efficiency, Maximizing Profits One of the Newer Operating Practices p Begin Directed Inspection and Maintenance at Remote Facilities u SAVES… 362 Mcf/yr u PAYBACK … < 1 yr p Enables several PROs u Inspect and Repair Compressor Station Blowdown Valve u Use Ultrasound to Identify Leaks u Test and Repair Pressure Safety Valves Bubble test on leaking valve Source: CLEARSTONE ENGINEERING LTD

22. Page 22 Reducing Emissions, Increasing Efficiency, Maximizing Profits Screening and Measurement

23. Page 23 Reducing Emissions, Increasing Efficiency, Maximizing Profits Combustion Equipment 9.9% Amine Vents 0.5% Flare Systems 24.4% Non-leaking Components 0.1% NRU Vents 0.3% Storage Tanks 11.8% Leaking Components 53.1% Source: Clearstone Engineering, 2002 Natural Gas Losses by Source

24. Page 24 Reducing Emissions, Increasing Efficiency, Maximizing Profits Control Valves 4.0% Open-Ended Lines 11.1% Other Flow Meters 0.2% Orifice Meters 0.1% Pressure Relief Valves 3.5% Valves 26.0% Blowdowns 0.8% Connectors 24.4% Compressor Seals 23.4% Crankcase Vents 4.2% Pump Seals 1.9% Pressure Regulators 0.4% Source: Clearstone Engineering, 2002 Natural Gas Losses by Equipment Type

25. Page 25 Reducing Emissions, Increasing Efficiency, Maximizing Profits How Much Methane is Emitted?

26. Page 26 Reducing Emissions, Increasing Efficiency, Maximizing Profits How Much Methane is Emitted?

27. Page 27 Reducing Emissions, Increasing Efficiency, Maximizing Profits Cost-Effective Repairs

28. Page 28 Reducing Emissions, Increasing Efficiency, Maximizing Profits DI&M - Partner Experience p Partner A: Leaking cylinder head was tightened, which reduced the methane emissions from almost 64,000 Mcf/yr to 3,300 Mcf/yr u Repair required 9 man-hours of labor u Gas savings were approximately 60,700 Mcf/yr u Value of gas saved was $182,100/year at $3/Mcf p Partner B: One-inch pressure relief valve emitted almost 36,774 Mcf/yr u Required five man-hours of labor and $125 of materials u Value of the gas saved was $110,300 at $3/Mcf

29. Page 29 Reducing Emissions, Increasing Efficiency, Maximizing Profits DI&M - Partner Experience p Partner C: Blowdown valve leaked almost 14,500 Mcf/yr u Rather than replace the expensive valve, Partner spent just $720 on labor and materials to reduce the emissions to ~100 Mcf/yr u Value of gas saved was $43,200 at $3/Mcf p Partner D: Tube fitting leaked 4,121 Mcf/yr u Very quick repair requiring only five minutes reduced leak rate to 10 Mcf/yr u Value of the gas saved was $12,300 at $3/Mcf

30. Page 30 Reducing Emissions, Increasing Efficiency, Maximizing Profits Discussion Questions p To what extent are you implementing these opportunities? p Can you suggest other opportunities? p How could these opportunities be improved upon or altered for use in your operation? p What are the barriers (technological, economic, lack of information, regulatory, focus, manpower, etc.) that are preventing you from implementing these practices?