IBP1502_12 SHALE GAS PLANT CONVERSION TO UCARSOL SHALE SOLVENT FOR REDUCED OPERATING COSTS OVER COMMODITY BLEND

Thiago Alonso1, Robert L. Dotson, P.E. 2

Copyright 2012, Brazilian Petroleum, Gas and Biofuels Institute - IBP

This Technical Paper was prepared for presentation at the Rio Oi & Gas Expo and Conference 2012, held between September, 1720, 2012, in Rio de Janeiro. This Technical Paper was selected for presentation by the Technical Committee of the event according to the information contained in the final paper submitted by the author(s). The organizers are not supposed to translate or correct the submitted papers. The material as it is presented, does not necessarily represent Brazilian Petroleum, Gas and Biofuels Institute opinion, or that of its Members or Representatives. Authors consent to the publication of this Technical Paper in the Rio Oil & Gas Expo and Conference 2012 Proceedings.

Abstract
It is a common perception that commodity amines have lower operating costs than formulated amines. This opinion is based on the premise that since the commodity amine costs less per pound it must be lower in operational cost. However, since commodity amines often require expensive chemical additives to reduce/inhibit corrosion, neutralize corrosion products, or cover other chemical deficiencies, the total operational cost may actually be higher. A premier midstream natural gas operator based in the United States, has used a commodity MDEA/DEA blend for many years in the Haynesville Shale region of the United States. Haynesville Shale gas is typically 3-4% mole CO2, 10-20 ppm H2S, and considered as CO2 only natural gas due to the low concentration of H2S. Since an MDEA/DEA blend was used to treat the CO2 only natural gas stream, it was necessary to add corrosion inhibitor and bicine killing chemicals increasing the complexity and cost of daily operations. During a planned 3-month long trial, the facility using the MDEA/DEA blend required multiple filter changes, had several foaming issues, some of which shut down the facility, and required the addition of expensive additives. The unit using Ucarsol Shale H-102 did not require a filter change, did not have a serious foaming issue, did not shut down the facility and used no additives. Both units used the same antifoam as necessary. Based on operational costs during this initial evaluation and one year of operational data since, the customer has estimated the payback for using Ucarsol Shale H-102 over their MDEA/DEA blend to be 0.29 years for a new facility and 1.34 years for an existing plant.

______________________________ 1 Technical Service Engineer - DOW OIL & GAS 2 Sr Technical Service Engineer DOW OIL & GAS

Rio Oil & Gas Expo and Conference 2012

1. Introduction
With the development of new drilling technology and hydraulic fracturing techniques, shale gas production has increased significantly over the past five years. This explosion of shale gas production, although lead by the United States, has expanded around the globe. In Latin America, Argentina has the largest proven reserves of shale and tight gas, with an estimate of 774 Tcf of gas resources. The new gas plus government program is helping to encourage new projects with higher prices for the gas produced from non-conventional sources. There are some companies like Apache, which are already producing gas in shale formations in the Neuqun basin with directional drilling in wells of 1600 to 4200 m in depth with other good locations to continue their search. (MARIANO RUIZ, Argentinean AMCHAM, 2012). In early 2011, after having plant operational issues, poor gas treating facility equipment reliability and higher than expected operational costs due to required supplier additives, a premier U.S gas treating operator met with Dow Oil & Gas to discuss the newly released Ucarsol Shale series of formulated solvents specifically designed for shale gas regions. Based on the operational performance information provided from reference facilities, solvent technical performance simulations and no requirement for expensive and complicated additives, the operator decided to offer one unit that was about to start-up as a demonstration facility. It was one of two units that would be fed from the same gas pipeline and were located side-by-side.

2. Amine/CO2 Chemistry
The absorption of CO2 from a gas stream uses the solvents ability to accept a proton, which provides a chemical driving force to assist solubilization of the CO2. This propensity for the aqueous CO2 to act as an acid in the subsequent reaction with an amine takes place due to the higher pKa of the amine. The larger the difference in dissociation constant between the amine and the CO2, the more complete the acid/base reaction that will take place. As shown in Table 1, MEA has the highest acid dissociation constant (9.5 at 25C) and therefore exhibits the highest degree of reaction of gas treating amines when compared to the pKa of aqueous CO2 of 6.0 (at 25C). (Martell, A.E, 2003) In comparison, DEA has a dissociation constant of 8.88 and MDEA is 8.52 at 25C Table 1. pKa of Common Amines and CO2 pKa (25oC) 13.8 9.5 8.88 8.52 6.0

OHMonoethanolamine (MEA) Diethanolamine (DEA) Methyldiethanolamine (MDEA) CO2 (first dissociation)

In spite of its high degree of reaction, DEA has disadvantages stemming from its ability to degrade in the presence of CO2 and corrode carbon steel. In a CO2-only natural gas stream, like the Haynesville Shale region of the United States, there is insufficient H2S concentration to form a stable layer of protective iron sulfide on the carbon steel piping and equipment. MDEA was developed to allow operations at higher concentrations without such degradation or need for corrosion inhibitors and other chemical additives. Unfortunately, MDEA alone was shown to be kinetically limited when compared to primary and secondary amines (MEA and DEA) as it will not form the carbamate directly. The carbamate moiety accelerates the reaction with CO2. MDEA is dependent on the CO2 hydrolysis reaction to create carbonic acid which is then reactive with MDEA to facilitate CO2 absorption. The CO2 hydrolysis reaction is very slow compared to direct reaction to the carbamate. Therefore, an activator is utilized to effectively assist the reaction rate and tune CO2 selectivity.

3. The Solvent Trial

In early 2011, the operator decided to compare Ucarsol Shale H-102 versus their standard 60%wt MDEA/40%wt DEA blend. Discussions proceeded to determine the data that would be collected and how to evaluate the data. Data collected during the trial are shown in Table 2.

Rio Oil & Gas Expo and Conference 2012 Table 2. Solvent Trial Data Collection Gas Flow, MMSCFD, Daily avg. Amine flow rate, gpm, daily avg. Filter Changes, total number Amine Make-up, Total Gallons Chemical additives, Total Dollars (US) Antifoam quantity Operational Reliability, Percent of time treating gas Amine analysis, bicine level, wt% Operating Ease, subjective operator opinion

3.1. Facility Information Haynesville shale gas composition for this area is shown in Table 3. Table 3. Haynesville Shale Gas Composition Temp Pressure CO2 H2S N2 Methane Ethane Propane C4+ 100 1000 3.000 0.001 0.100 96.400 0.025 0.030 0.444 100.000 Deg F PSIG %mole %mole %mole %mole %mole %mole %mole

3.1.1. Unit 1 - MDEA/DEA Blend Unit 1 is a 300-gpm facility with a typical gas treating design. 75 MMSCFD feed gas design Absorber : 6-ft diameter, 20 trays Flash Drum: 6-ft Dia x 12-ft TL-TL Regenerator: 5-ft diameter, 20 trays APV Plate & Frame L/R Exchanger Direct fired Bryan reboiler 10,500 gal system volume 50%wt blended amine (60% MDEA / 40% DEA) Facility is manned during day operations Facility is unmanned during night hours. Facility uses a Digital Control System (DCS) and paged alerts.

Rio Oil & Gas Expo and Conference 2012 3.1.2. Unit 2 - Ucarsol Shale H-102 Unit 2 is a 250-gpm facility with a typical gas treating design. 65 MMSCFD feed gas design Absorber: 6-ft diameter, 20 trays Flash Drum: 4.5-ft Dia x 12-ft TL-TL Regenerator: 5-ft diameter, 20 trays Dual shell & tube L/R Exchangers Kettle reboiler/Hot oil system from oil heater 15,000 gal system volume Aqueous Ucarsol Shale H-102 Facility is manned during day operations Facility is unmanned during night hours. Facility uses a DCS and paged alerts.

3.2 .Trial Description Unit 1 had been in operation for 4 months using the operators standard MDEA/DEA blend prior to the completion of Unit 2 construction. Unit 2 was water washed and drained, washed with a 3%wt amine solution, heated and circulated for four hours then drained. Finally, Unit 2 was loaded with the Ucarsol Shale H-102 and started up. Start-up was smooth and without issue. Both Units 1 and 2 were loaded with sour gas feed to a point the outlet gas composition met the treated gas specification. Since this operator has several units on the pipeline, they are able to move sour gas to these units, most of the time, to keep them loaded. Unit 1, using the MDEA/DEA blend, was designed for 75 MMSCFD of sour gas feed, but due to foaming issues, it was typically only able to treat 60 MMSCFD. Unit 2, using the Ucarsol Shale product, was designed for 65 MMSCFD of sour gas feed, but since the gas treating facility was so reliable, the plant operators loaded the facility with up to 72 MMSCFD, until equipment limits would not allow additional feed gas. Unit 1, using the MDEA/DEA blend, continued to add the required corrosion inhibitor and bicine killer, as recommended by the chemical supplier. Unit 2, using Ucarsol Shale H-102 required no additives. Amine samples for rich and lean streams would be collected monthly and analyzed in Dows amine lab and results evaluated. The evaluation would use lean and rich loadings to determine the system CO2 molar loading and regenerator operation; bicine wt% and iron ppmw for corrosion level potential; amine color, amine clarity and TSS to evaluate filtration performance and amine contaminants. Additional amine sample analyses are provided at no cost for an amine facility using Ucarsol by the Dow amine laboratory.

3.3. Trial Results Plant operators immediately noticed a difference in the operability of the two units. Unit 1, during most startups was very onerous and the unit often foamed. Operators stated they felt like they were fighting the unit to keep it running. Unit 1 required continuous antifoam, corrosion inhibitor, and bicine killer addition. Unit 2, on Ucarsol Shale H-102, started up without issue, rarely foamed and required no chemical additives. During the first month of the trial, Unit 1 had three upsets due to foaming causing the system to automatically shut down. A plant operator was required to travel to the facility and manually startup the system. During these foaming events, some quantity of amine was lost through the treated gas outlet and required make-up MDEA/DEA blend to be added into the system. Unit 1s 20-micron rich and lean cartridge filters were changed twice during the trial. During this same period, Unit 2, on Ucarsol Shale solvent, had no foaming issues, no unit shutdowns and no filter changes. Antifoam was added to Unit 2, as needed, but no serious foaming conditions occurred. Unit 2 used similar 20-micron cartridge filters. Both units ran approximately a 10% slipstream of the circulating amine through the particulate filters and carbon bed. The bicine concentration in all of the operators facilities using the MDEA/DEA blend was typically between 2000 and 4000 ppmw, but has been as high as 16,000 ppmw. Unit 1, while operating with the MDEA/DEA blend during the trial, had bicine concentrations between 3200 and 4000 ppmw. Unit 1, after upgrading to Ucarsol Shale 4

Rio Oil & Gas Expo and Conference 2012 H-102, has a non-detectable bicine concentration after 11 months of operation. Unit 2, while operating on Ucarsol Shale H-102 had non-detectable bicine concentration during the trial and is still non-detectible after one year of operation. Iron analysis results for Units 1 and 2 on Ucarsol H-102 over the past year have been maintained between 1-4 ppmw, indicating very low corrosion rates. Although this trial was scheduled for three months, the operator removed the MDEA/DEA blend in Unit 1 after only one month. The initial data provided enough information for the operator to conclude that the Ucarsol Shale H-102 formulated solvent was the lowest cost solvent. The lower price of the MDEA/DEA blend was more than offset by the cost of the required corrosion inhibitor and bicine killer. The additional cost of make-up amine and filter costs were not included in the initial cost evaluation, which would increase the cost advantage. The operators cost analysis did not include lost revenue due to down time (as they are able to switch gas to other units so it was not technically lost revenue). However, for a single or isolated unit that cannot switch gas to another unit, this lost revenue would further increase the cost advantage of the Ucarsol Shale solvent.

4. Cost Comparison
The operator estimated first year and annual operating expenses for a new 300-gpm facility, based on MDEA/DEA blend operational experience and trial experience, as shown in Table 4. A new facility requires an initial fill of either amine. The annual operating cost of the MDEA/DEA blend requires the addition of corrosion inhibitor and bicine killer at $22,752 for a unit this size. MDEA/DEA make-up amine, based on operator experience and trial results, was estimated to be four times the make-up requirement for Ucarsol Shale H-102. Antifoam usage for the MDEA/DEA blend, based on the trial, was estimated at ten times that for the Ucarsol. From operational experience, the high bicine concentration and other DEA degradation components, the operator estimated equipment repairs due to corrosion at $25,000 for the MDEA/DEA blend. The payback, as calculated by the operator, is 0.29 years for a new 300-gpm facility using Ucarsol Shale H-102 in place of the MDEA/DEA blend. This is due to the high annual costs of the chemical additives ($22,752), higher make-up amine usage (four times) and equipment maintenance costs related to corrosion (estimated at $25,000) of the MDEA/DEA blend. Note: Due to confidentiality and variable amine and antifoam pricing, specific amine and antifoam costs are not provided. All Operational Cost Comparison Tables provide the pounds of amine for a system fill, estimated pounds of annual make-up amine and a ratio of pounds of antifoam used annually in a 300-gpm facility, as determined by the operator. Payback calculations are based on antifoam and amine costs at the time of the trial (Spring 2011).

Table 4. Operational Cost Comparison of MDEA/DEA Blend and Ucarsol Shale H-102: New 300-gpm Facility

NEW FACILITY COST COMPARISON

Ucarsol Shale H-102 57,500 5,200 First year amine, lb Antifoam, annual pounds ratio Chemical Additives Corrosion Inhibitor, $/year Bicine Killer, $/year Annual Chemical Additives cost Equip corrosion, $/year Payback, yrs 62,700 1 $ $ $ $ 0.29 0 0 0 0 $ $ $ $ MDEA/DEA Blend 63,800 20,900 84,700 10 11,376 11,376 22,752 25,000

Amine, Initial fill, lb Amine make-up, lb/year

Rio Oil & Gas Expo and Conference 2012 These cost estimates and payback calculations do NOT take into account the lost revenue for Unit 1 downtime or additional operational expenses, such as filter cartridges, which would further justify the value of Ucarsol Shale H-102. The operator also estimated first year and annual operating expenses for an existing 300-gpm facility upgraded from MDEA/DEA blend to Ucarsol Shale solvent, based on MDEA/DEA blend operational experience and trial experience, as shown in Table 5. An existing facility requires the removal of the MDEA/DEA blend and an initial fill of the Ucarsol Shale H-102. All other costs; make-up, antifoam, corrosion inhibitor, bicine killer, and equipment repairs due to corrosion, remain the same for the two units. The cost of the removed amine disposal was not included, as the operator was able to move the amine to another facility using the MDEA/DEA blend. The first year expenses, in this case, are higher for the Ucarsol Shale H-102 to pay for the amine conversion, but the investment is quickly recovered by the higher annual cost for the MDEA/DEA blend for antifoam, chemical additive and equipment repairs due to corrosion costs. The payback, as calculated by the operator, is 1.34 years for the existing facility scenario using Ucarsol Shale H-102 in place of the MDEA/DEA blend. This is again due to the high annual costs of the chemical additives of $22,752 and higher make-up amine usage of the MDEA/DEA blend versus no chemical additives and negligible makeup requirement for the Ucarsol Shale H-102. Note: Due to confidentiality and variable amine and antifoam pricing, specific amine and antifoam costs are not provided. All Operational Cost Comparison Tables provide the pounds of amine for a system fill, estimated pounds of annual make-up amine and a ratio of pounds of antifoam used annually in a 300-gpm facility, as determined by the operator. Payback calculations are based on antifoam and amine costs at the time of the trial (Spring 2011).

Table 5. Operational Cost Comparison of MDEA/DEA Blend and Ucarsol Shale H-102: Existing 300-gpm Facility.

EXISTING FACILITY COST COMPARISON

Ucarsol Shale H-102 57,500 5,200 62,700 1 $ $ $ $ 1.34 0 0 0 0 $ $ $ $ MDEA/DEA Blend 0 20,900 20,900 10 11,376 11,376 22,752 25,000

Amine, Initial fill, lb Amine make-up, lb/year First year amine, lb Antifoam, annual pounds ratio Chemical Additives Corrosion Inhibitor, $/year Bicine Killer, $/year Annual Chemical Additives Cost Equip corrosion, $/year Payback, yrs

Even in a system where the quantity of make-up and antifoam are equivalent for the Ucarsol and MDEA/DEA blend and the equipment repairs due to corrosion are cut in half, the high cost of the additives are a significant operational expense for the operator. This is shown in Tables 6 & 7, where the advantages of Ucarsol Shale H-102 provide a payback of 0.62 years for a new facility and 2.88 years for an existing facility. In these cases, the calculated payback is almost exclusively based on the high cost of the corrosion inhibitor and bicine killer used with the MDEA/DEA blend.

Rio Oil & Gas Expo and Conference 2012 Table 6. Operational Cost Comparison of MDEA/DEA Blend and Ucarsol Shale H-102: New 300-gpm Facility With Equal Amine Make-up Pounds, Antifoam Use and One-Half the Cost of Equipment Repair Due to Corrosion.

NEW FACILITY COST COMPARISON

Ucarsol Shale H-102 57,500 5,200 First year amine, lb Antifoam, annual pounds ratio Chemical Additives Corrosion Inhibitor, $/year Bicine Killer, $/year Annual Chemical Additives Cost Equip corrosion, $/year Payback, yrs 62,700 1 $ $ $ $ 0.62 0 0 0 0 $ $ $ $ MDEA/DEA Blend 63,800 5,200 69,000 1 11,376 11,376 22,752 12,500

Amine, Initial fill, lb Amine make-up, lb/year

Table 7. Operational Cost Comparison of MDEA/DEA Blend and Ucarsol Shale H-102: Existing 300-gpm Facility With Equal Amine Make-up Pounds, Antifoam Use and One-Half the Cost of Equipment Repair Due to Corrosion.

EXISTING FACILITY COST COMPARISON

Ucarsol Shale H-102 57,500 5,200 62,700 1 $ $ $ $ 2.88 0 0 0 0 $ $ $ $ MDEA/DEA Blend 0 5,200 5,200 1 11,376 11,376 22,752 12,500

Amine, Initial fill, lb Amine make-up, lb/year First year amine, lb Antifoam, annual pounds ratio Chemical Additives Corrosion Inhibitor, $/year Bicine Killer, $/year Annual Chemical Additives Cost Equip corrosion, $/year Payback, yrs

Rio Oil & Gas Expo and Conference 2012

5. Conclusion
Evaluating the data collected during the one month side-by-side trial shows the following advantages for Ucarsol Shale H-102 over the MDEA/DEA blend, as shown in Table 8:

Table 8. Solvent Trial Data Collection Evaluation

Ucarsol Shale H-102

Gas Flow, MMSCFD, Daily avg. Treated more sour gas flow due to less foaming and shutdowns. Unit 2 designed for 65 MMSCFD averaged 72 MMSCFD as the solvent did not have issues. Lower L/G due to high CO2 removal performance providing more gas to be treated for the same amount of feed gas. No filter changes during the trial Required no make-up during the trial Requires no additives. Requires less antifoam due to a low foaming tendency. 100% operational reliability during the trial. Bicine concentration is non-detectable after one year or operation. Operators stated it operates much easier. Operating Ease, subjective operator opinion

MDEA/DEA Blend
Unit 1, designed for 75 MMSCFD was only able to treat an average of ~60 MMSCFD over the month trial due to foaming issues. Higher L/G. Required two filter changes during the trial. Required make-up due to lost amine during foaming issues. Requires expensive additives to control corrosion and bicine. Used about 10 times the antifoam due to multiple foaming events. Shut down three times during the trial: 97% reliability Bicine concentrations as high as 16,000 ppmw. Operators consider the MDEA/DEA blend a lot of work: higher foaming tendency, additive addition, filter changed more often. Amine is not as clean due to solids.

Amine flow rate, gpm, Daily avg. Filter Changes Total number Amine Make-up, quantity Chemical additives, Total Dollars (US) Antifoam quantity Operational Reliability, Percent of time treating gas Amine analysis, bicine level, wt%

Based on the experience of the operator, who has used a MDEA/DEA blend for over 10 years, and the data collected during the trial, the operator concluded that the cost of Ucarsol Shale H-102 has a payback that supports its use in their facilities rather than their standard MDEA/DEA blend. The requirement for continuous addition of expensive corrosion inhibitors and bicine killer chemicals, the higher cost of filter changes, the lower reliability of the system, the higher amine loss rates due to foaming and the higher maintenance cost to repair equipment damaged due to corrosion from the DEA degradation products justified their decision. The lower cost of the MDEA/DEA blend is more than offset by the higher cost of the chemical additives required. The operator determined the payback for a new 300-gpm facility is 0.29 years and the payback for an existing 300-gpm facility is 1.34 years. This cost evaluation is supported even when the estimates of higher antifoam and make-up rates are removed and equipment corrosion costs were reduced by one-half, resulting in a payback of 0.62 years for a new 300-gpm facility and 2.88 years for an existing 300-gpmfacility. To date, more than a year after this evaluation, the operator has upgraded ten (10) facilities and continues to find opportunities to upgrade their facilities to Ucarsol Shale H-102.

Rio Oil & Gas Expo and Conference 2012

6. References
Exploracion y produccion de yacimientos de gas no convencional, MARIANO RUIZ, Argentinean AMCHAM, 2012 MARTELL, A.E.; SMITH, R.M.; MOTEKAITIS, R.J. NIST Critically Selected Stability Constants of Metal Complexes Database, NIST Standard Reference Database 46, Vers. 7, U.S. Department of Commerce, 2003.