Modular processing facilities aimed at small Slope fields

  • The recently patented Mobile Arctic Production System by NANA WorleyParsons subsidiary Kairos consists of four modules: one each for power generation, natural gas handling, electrical controls and a 5,000 barrels per day liquids production module. It can be leased for $13 million per year, according to company officials. (Image/Courtesy/Kairos LLC)

North Slope oil has historically been a game of making big discoveries needed to justify big development costs, but a team of NANA WorleyParsons engineers is trying to rewrite that playbook.

Kairos LLC, a subsidiary of NANA WorleyParsons, has developed what company leaders believe could turn small or otherwise marginal North Slope oil finds into productive members of the state economy.

Kairos is a Greek term for “a time when conditions are right for the accomplishment of a crucial action,” according to Merriam-Webster.

The time was early 2015; oil prices had just fallen to less than $50 per barrel and the industry was coming to grips with the fact that the downturn was the result of fundamental changes in global oil markets and not a recession-induced blip like 2008-09.

The crucial action, for NANA WorleyParsons, was finding a way to help its industry partners be profitable in Alaska, particularly during periods of lower prices. And the accomplishment turned out to be Kairos’ Mobile Arctic Production System.

The recently patented MAPS, as it is conveniently referred to, is a scaled-down and modular oil processing facility. Engineers of the system compare it to a “very small portable version of a flow station or gathering center.”

NANA WorleyParsons General Manager Daniel Formoso described it as a “plug and play” system that could preclude operators from having to spend upwards of $200 million or more on traditional processing facilities.

“This allows production of smaller fields that could otherwise be uneconomic to develop,” Formoso said.

The basic processing system consists of four modules: one each for power generation, natural gas handling, electrical controls and a 5,000 barrels per day liquids production module. It can be leased for $13 million per year, according to company officials.

Storage tanks and a truck loading facility are also part of the standard package.

Additional modules for handling sand, water, production heating and processing to sales-quality oil are available as well.

The system is scalable in 5,000 barrels per day increments by adding additional production modules, but company officials acknowledge that traditional, large facilities would probably be warranted for production above roughly 15,000 barrels per day. It’s intended for developments with less than about 10 wells.

While produced natural gas is intended to power the system, if the MAPS is installed on a well pad near accessible power — or a pipeline for that matter — the power generation or liquids storage equipment can be omitted.

“We could tailor it to be handling more gas than oil if we needed to,” Formoso added.

The flexibility in configuration should make the MAPS a viable option for most any oil-gas-water-sand production mix an operator encounters on the North Slope, according to Kairos.

The only thing an operator needs ahead of time is a small gravel pad of at least three acres, which is enough space for a few wells and a handful of the 20-foot by 60-foot truckable modules. The upfront cost to an operator would then be in the $20 million range, Kairos engineers estimate, as opposed to the cost of a more traditional 10- to 12-acre gravel pad to hold a suite of wells and large, permanent production facilities.

The MAPS could be applicable not only for small oil fields — of which there are several the company has identified that have been found and dismissed by producers because of traditional production costs — but it could also provide a revenue stream for a small producer while long-term full development of a larger field is ongoing.

Kairos estimates it could lower the all-important breakeven production cost on a new field from $55 per barrel of oil to $37 per barrel.

The modular production facility concept is not new; it’s widely used across the shale fields of the Lower 48. Kairos’ MAPS is similar to the systems employed down south but with Arctic-specific additions.

Company engineers note the small production systems popular in the North Dakota and Texas shale oil fields are built on open-air skids with no fire and gas detection or suppression systems and very little insulation on piping and other equipment.

Down south, where power connections are easy to find, gas is generally flared. The MAPS not only uses gas for self-sustaining power, thereby minimizing the need for diesel and its risks, but any gas flaring that needs to be done is enclosed as well, according to the designers.

“It’s made for our environment,” Formoso said.

NANA WorleyParsons officials said the first systems will likely require 12 to 18 months of lead time, during which a company could develop the requisite gravel pad infrastructure.

The company, which is a contractor for numerous Slope operators, has received interest from several producers, according to Formoso.

Not to be discounted is the fact that the MAPS is intended to be a fairly autonomous system with truck drivers transporting liquids being the primary on-site personnel during operations. A single person could monitor a handful of MAPS remotely, thereby reducing safety risks in the event of an accident on the production pad.

Finally, decommissioning — whether because of a field being exhausted or full-scale facilitates being completed — is as simple as calling NANA WorleyParsons and telling them to “come get your stuff” company leaders described. That cost is rolled into the lease.

Elwood Brehmer can be reached at [email protected].

02/21/2018 - 11:30am