Production Chemicals Trilogy (Part 1)
Snake Oil or The Cure?
Having worked in Production Chemistry related roles for over 30+ Years for both chemical vendors and for oil companies big and small, you will be glad to know that production chemicals are the Cure way more often than being Snake Oil.
Ultimately, without production chemicals a large proportion of the oil and gas that has been produced would still be in the ground. However, this assistance in getting the oil and gas to market comes at a price. The current production chemical market is worth in the region of US$17 billion / year with the expectation that this will rise to U$30 billion / year by 2030.
Ranging from commodity to fit-for-purpose specialty chemicals, there are countless variations to an asset’s production chemical program and to get value for money you have to know the pitfalls. Knowing how best to approach the procurement of chemicals in a sensible and structured manner is all part of the process but it is usually easier said than done.
When you are spending that amount of money, it obviously buys you a lot of chemical to inject to the various systems. So where exactly are production chemicals used? Well they are used throughout the oil and gas production cycle from Upstream via Midstream all the way to Downstream.
For those that are not familiar with the oil and gas production process the Upstream segment involves the Exploration, Development and Production of oil and gas. Midstream transports and stores the oil and gas to where it needs to get processed. Finally in Downstream, the oil and gas is processed, refined and then set to the market as refined hydrocarbons and petrochemicals. At each step in the process production chemicals are required to maximise efficiency and minimise costs.
The graphic below lists many of the production chemical types and in what part of the oil and gas cycle they are used in. In short, production chemicals play a critical roll in protecting asset infrastructure from corrosion, maintain/improve the movement and separation of fluids along the production process, and prevent undesirable stability issues with produced oil/water/gas.
Production Chemical Supply
Hopefully you now have a better idea of where production chemicals are used in the oil and gas cycle but when it comes to the manufacture and supply of the chemicals that can be an even more complicated process and it is important to be able to understand the issues associated with this.
Fortunately, the Production Chemist specialists at Pontem Analytics have spent years helping Oil and Gas Operators navigate their way through the minefield of chemical performance qualification, chemical compatibility/suitability requirements, identifying injection point locations and procuring and applying production chemicals to name but a few of our skills.
Choosing the Production Chemicals required
With respect to the process of identifying what is needed from a production chemical perspective let us start at the beginning. Every reservoir is unique with wide variations in fluid properties (oil, gas, water compositional analyses), and production profiles will include a wide range of pressures, temperatures, and production rates of the fluids. Having a solid understanding of the system will help drive what production chemical types are needed. This critical first step requires an oil, gas and water sample testing program to understand the chemical composition of what is sampled. As the system is designed, various engineering disciplines will develop the expected ranges of temperatures, pressures and flow rates, and from these initial assessments petroleum engineers and production chemists can determine what production chemistry issues to expect. Once you know what you want to treat, you can start identifying the chemical types you will need to inject. When it comes to the production chemicals that are used in oil and gas systems in most instances you can split the chemical types that are likely to be used into two main categories. These are:
Commodity chemicals
Performance chemicals
Commodity Chemicals
Commodity chemicals are basic, non-proprietary substances that can be specified purely and completely by the composition and quality required. Some examples include Mono Ethylene Glycol, Methanol, Sodium Chloride solution, Calcium Chloride solution, Triazine, Diethanolamine (DEA) and Triethanolamine (TEA).
These chemicals do not need performance verification per se, though specific compatibility testing (with other chemicals, or specific materials used in the production system), environmental testing or safety testing may be necessary. They will be purchased from a vendor based upon quality, delivery and price. Typical characteristics for commodity chemicals include multi-purpose use, large volumes/bulk delivery and/or storage, and various grades of available purity.
Performance Chemicals (aka Speciality Chemicals)
Performance chemicals are those where the effect of the chemical is important, but the exact chemical makeup is not. Typical examples are corrosion inhibitors, scale inhibitors, biocides, demulsifiers, wax inhibitors, asphaltene inhibitors, flocculants, etc.
They are typically blends of chemicals made up of anywhere between 1-5 active chemical ingredients and a solvent package which will either be aqueous or hydrocarbon based depending on the type of performance chemical needed. With them being blends of chemicals this is where the production chemical vendor can add significant value by combining various chemicals to synergistically work together thus boosting performance. This is quite rightly a proprietary process because this is how each vendor can gain a competitive advantage over their rivals.
Performance chemicals recommended for Deepwater applications are, almost without exception, validated by laboratory experiment prior to selection and purchase. This is also best-practice advice for shallow water and onshore production systems. The vendor will select a shortlist of chemicals for performance trials. The specific laboratory validation programme will be determined at the time of chemical selection and may be performed by the chemical vendor, a 3rd party, or both. It should generally include:
Testing of chemical performance at laboratory conditions as close to process conditions as possible.
Compatibility testing with other chemicals expected to be present in the system, and with metals and materials known to be in the system.
Emulsion and foaming testing (if the process fluid is to be separated)
Effects on the produced water disposal plant (Important to know whether the chemical can enter the wastewater system)
Environmental rating determination
Stability of the chemical (particularly important in recirculating systems such as MEG, and those exposed to reboiling or distillation) to ensure that performance is maintained, and that the chemical does not form unacceptable breakdown products (such as solids, gunk or corrosive substances) even in ambient storage.
Validation tests may be repeated in a 3rd party independent laboratory to confirm results.
The performance, safety, environmental impact, practicality and cost will be balanced to select each final chemical for deployment.
A validation programme of on-site tests shall be performed shortly after chemical injection has commenced, to verify the chemical performance, and optimise the dosage.
The whole testing and validation process is not a simple process and to get it right it needs a lot of thought. Examples of things you need to do are:
Understand the conditions that the tests need to be performed at,
What the health, safety and environmental implications are when using the chemicals,
Any risks associated with using the chemical
Whether the chemicals are actually value for money
This experience is not always available in the oil and gas companies that are buying and applying the performance chemicals. So the benefit that Pontem Analytics can provide the end user of the performance chemicals is to use our comprehensive understanding of this process to guide and assist. By providing this service we make sure the client identifies the most efficacious, safe and cost-effective chemical solutions.
It is also worth pointing out that the vendors of the commodity and performance chemicals on many occasions are not the same. Many of the commodity chemicals come straight from the chemical manufacturers or via chemical trading houses. For these, there may be a significant number of options to choose from and very little testing to be done.
The situation for performance chemicals is quite different. Currently there is probably somewhere between 5-10 global players with the top four suppliers having the market share of the business. In specific geographic locations, there may be a number of smaller chemical vendors available and whether these are worth using will be dependent on the problem at hand and the technical capabilities these smaller companies have to provide the required technical support.
The global performance chemical suppliers are in the author’s opinion actually quite similar. In many instances, they will use many of the same or similar active ingredients, just put together in slightly different blends or combinations to maximise their performance, minimise costs and reduce their environmental impact. There are examples where one company has developed a much more effective product than everyone else but that is not so common. Where they usually differentiate themselves is their technical / testing capabilities, how good their supply chain is and of course the cost of the chemicals they are selling. For example, a nuanced understanding of various raw material sources and implementing a robust QC process to retain optimal performance and stability may provide a competitive advantage. As with most things it is usually about how skilled, knowledgeable, and capable the people from the chemical vendors are.
What chemicals will you need?
When it comes to performance chemicals there are a wide range of chemicals that are supplied to the oil and gas industry to be used mainly in Exploration & Production (Upstream).
The performance chemicals that are used in the Upstream sector can be used to prevent solids from depositing, aid in separation, improve flow and to meet the required oil and gas specifications required for export. It is also worth noting that some of the same chemicals are used in the Midstream sector during the transportation and storage of the oil and gas that was produced in the Upstream part of this process.
Some of the performance chemicals that are injected are:
Demulsifiers – These are used to aid the separation of the oil, gas and water phases and are one of the more significant production chemicals from a usage perspective. They are also known as emulsion breakers.
Corrosion inhibitors - Required all along the process stream where free water and carbon steel is present to prevent corrosion of the pipelines, vessels and equipment used in the oil and gas production process).
Paraffin treatment chemicals to prevent the deposition of paraffin and prevent gelling of the crude oil such as paraffin dispersants, paraffin inhibitors and pour point depressants.
Scale inhibitors - To prevent inorganic solids deposition.
Asphaltene inhibitors - To prevent the deposition of these polycyclic aromatic molecules
Hydrate Inhibitors – Some of the highest usage chemicals are hydrate inhibitors. They are injected to prevent the formation of ice like solids called hydrates that block oil and gas production systems.
Biocides - Prevent microbiological contamination throughout the oil and gas production process.
Water clarifiers / Deoilers – These chemicals are injected to ensure that the water separated from the crude oil is sufficiently free of hydrocarbon before water disposal. Often injected downstream of demulsifiers, they act as a secondary separation chemical and/or a water polishing agent.
Solids Flocculents / Filter aids – To help meet oil and water specifications these chemicals are used to aid in the removal of solids from both the oil and water phases.
Antifoam – These chemicals are added to the process stream to prevent foaming in the oil and gas processing facilities.
Drag Reducers / Flow improvers – Reduce pressure drops across the pipeline systems transporting oil thus increasing the volume of oil that can be produced through the pipeline.
H2S and O2 scavengers – Scavengers are used to remove impurities from the oil, gas and water phases to ensure oil and gas specifications are met and to minimise corrosion.
Other notable chemical types that are used during the production of oil and gas are:
Stimulation chemicals – This can be a wide range of chemicals that include surfactants and acids. These chemicals help remove blockages in the reservoir rock allowing for more oil and gas to be produced through the rock to the wellbore.
EOR (Enhanced Oil Recovery) / Water Shut-off chemicals – Best characterized as surfactants and polymers, these chemicals are applied into the formation rock to increase the amount of crude oil which can be extracted from an oilfield or to reduce the amount of water that gets produced along with the oil.
Drilling and Completion fluids are another crucial family of chemicals used primarily during the Exploration, Appraisal and Development phases when new wells are being drilled. These are supplied by specialist companies and include a varied selection of chemicals added to the drilling fluid to help with applying hydrostatic pressure to the formation to prevent the wells from blowing out, to prevent formation fluids from entering wells (known as fluid loss additives), drill cuttings removal and maintaining the temperature and cleanness of the drill bit in order to increase the rate of penetration.
As part of the well drilling and completion process there is a lot of cement added to wellbores to protect and seal the well. The process is also frequently used to permanently shut off water penetration into a well.
As well as identifying what problems each oil and gas system has that needs treatment with a production chemical. A lot of time and effort needs to go into testing and then selecting, the best chemical to use for each area of concern. As part of this, there is a commercial process to choose who to buy the various chemicals from. This can involve entering into contracts with various different chemical vendors or more commonly now, just choosing one preferred vendor to supply all the different chemicals. Both the chemical testing and tendering processes are very complex and deserve to be addressed separately. So keep an eye out for Parts 2 and 3 of our Production Chemicals Trilogy on how to navigate the minefield that is Production Chemical testing and tendering.
Managing Chemicals Once Injection starts
This is the point when the job of a Production Chemist really kicks in. If you are not familiar with what a Production Chemist does the following job description may help:
The purpose of the Production Chemist is to ensure that the Oil and Gas Operator extracts the maximum value from its assets by making certain that the chemical treatments applied optimise the lifecycle value of the reservoir, production stream and the hardware associated with it. This is achieved by proactive involvement from appraisal well sampling, through the development process, implementation (drilling, completion and start up) and operating phases. Issues covered will include reservoir (water injection souring, scaling, production scaling, asphaltenes, stimulation, completion fluids, mud selection issues), production through wells and flowlines (hydrate control, scaling, corrosion control, wax, asphaltenes) and production facilities chemical treatments (demulsifiers, corrosion control etc). This also includes the management of the supply chain logistics associated with the transportation and storage of the chemicals onsite and the chemical vendor/s who supply the chemicals.
From the job description above it can been seen that there can be a lot to manage from a Production Chemistry perspective, but the workload is very dependent on the system. For instance, oil systems are usually a lot more onerous than gas systems as the production chemistry problems are more numerous in oil systems when compared with gas systems.
When you are tasked with managing an asset from a Production Chemistry standpoint it not only involves the chemicals injected, the Production Chemist needs to also keep a close eye on how the system production rates, temperatures, pressures and product specifications are behaving. When it comes down to it, to understand whether the chemicals being injected are doing what they should be doing there is a lot of data that you need to keep on top of.
This includes but is not limited to:
Oil, gas and water production rates
Production chemical injection rates and storage volumes
Production chemicals on order and to be ordered
Daily oil, gas and water sample analysis and results data
Operational pressure and temperature data
Third party lab and testing analysis
Lab consumables and equipment maintenance
This results in the generation of a lot of data that then need to be inputted into spreadsheets that in turn need to be managed. Unfortunately, as with a lot of the data generated in the oil and gas business, this does not get used as efficiently as it should. More often than not, it is used to identify what caused a problem after it has occurred rather than to identify it before it happens.
To solve this problem Pontem Analytics have developed Dashboards that allow real time management of these issues. This is all part of Pontem Analytics goal of empowering the decision makers of tomorrow by bridging the gap between data and discipline. An example of one of these Dashboards has been included below:
Hopefully what we have shared with you in this post has allowed you a look under the hood of the Production Chemistry process and has shown they Production Chemicals are the CURE to so many of the production issues that befall oil and gas producing assets. Chemicals are a small cog in a big machine but a vital one none the less. Without functioning chemicals, the production of oil and gas in many cases would not be possible so it is worth spending a bit more time and effort in getting it right.
Look out for our Parts 2 and 3 of our Production Chemicals Trilogy, which will give information on how you go about designing a production chemical tests program and then managing the chemical vendor tendering process that comes afterwards.
If you want more information on all things Production Chemistry related feel free to contact Pontem Analytics at the link at the bottom of this article.
info@pontemanalytics.com