Technology Roundtable: Power Generation

Organising power generation for an oilfield used to be a simple case of purchasing a power supply. Nowadays this has evolved into choosing a turnkey, specifically designed technology solution. Do you agree with this? How do you tailor your solutions for your customer’s needs?

Caterpillar Oil & Gas: Our customers’ needs have evolved over time as the viable number of fuel sources has expanded to include crude, heavy fuel, associated petroleum gas and natural gas. The increased flexibility in choice of fuel allows turnkey suppliers to customize our solutions. From our perspective, the wide range of fuel choices allows us, as a power solution provider, to offer a more comprehensive solution that leads to the lowest power generation cost for the customer. At the end of the day, customers in the industry want a manufacturer who can provide a complete solution that allows them to excel in their given expertise.

GE Power & Water: GE has always been a company, who provides a project specific hardware. This means fulfilling specific customer’s requirements based on available economically viable technology.

Understanding unique site conditions and wanting to better serve our customers, GE established the Distributed Power business, which incorporates various means of on-site power production namely aeroderivatives gas turbines as well as diesel- and gaseous-fuelled reciprocating engines.

HIMOINSA: Power generation is the central core of any project. The power supply is determined by the immediacy of the demand and the availability of fuel supply. Each project will have its own key selection criteria depending on location, type of facility and fuel, so the concept of ‘one size fits’ all is a little naïve, especially if we are talking about permanent installations, in which case we need to review the requirement for each individual project.

The Power Plant or Stand Alone Generator design for oil field depend of the available fuel on site (Diesel or Gas or Dual) and depends of the area classification (safe or zone 2 or zone 1).

Whatever is the classification, the generator control panels should be ready to work in parallel with the Grid (can be gas turbines powered, for offshore) and design for high voltage output, every oil field projects must be a “tailor made” solutions from HIMOINSA.

ZVEZDA-ENERGETIKA: Yes, we agree with this. Using state-of-the-art and increasingly sophisticated technologies for drilling and production raises the bar in terms of the quality and reliability needed from a power supply. We offer packaged solutions for power generation and distribution, all integrated within the main processes of the oilfield.

Hited: Turnkey projects are indeed becoming more popular. This is down to the fact that companies are currently trying to increase efficiency as much as possible, which is very difficult to achieve without a complete solution. It’s important to realise that tailoring the solutions to the needs of a specific project is the result of a whole package of work. The most important thing is to identify, from the very beginning, the exact needs of the client, and this is not as simple as it may seem at first glance. Very often people keep in mind the primary goal, but do not honour other requirements and capabilities. This can result in the project having to be reworked which in turn can increase the costs. We try to tailor our solution as much as possible to the requirments of our clients, so that they stay within their budgets and eventually save money.

Do you offer rental or purchased power generation solutions? What are benefits of this option to your clients?

Caterpillar Oil & Gas: We offer both rental and fully-purchased power generation equipment. Customers go for rental or purchased solutions based on a few criteria. Rental equipment offers the benefit of a worry-free service where Cat dealers provide the equipment, onsite service (including oil changes) and maintain our assets for the customers.

Customers tend to choose to buy power generation equipment when they desire more control over the assets. For Caterpillar customers who fully purchase their power gen equipment, they have the option to buy product support service from Cat dealers. Customers who already have a maintenance crew in place and existing infrastructure and/or resources to maintain assets are typically more inclined to purchase power gen assets. The size of the installation and duration of power needs factor into the decision as well.  When the installations are for a very large and permanent power plant, customers prefer to buy versus rent. For a large power plant with short-term power needs, customers will tend to rent equipment.

GE Power & Water: Our standard model is sales of equipment to end customers. We also have a possibility of providing rental solutions through the specialized rental partners. Unique project specific factors will dictate which option is the best-fit for the customer.

HIMOINSA: HIMOINSA offer purchase power solutions, we do not rent equipment. We do however consider ourselves as one of the largest suppliers to the rental companies.

Purchasing you power equipment makes much more sense in the long run where cost is a prime consideration. Renting a power plant is an expensive business in the long run.

As mentioned above, if the site requires high level of classification, the rental isn’t the suitable solution because the generators must be tailor made.

ZVEZDA-ENERGETIKA: We offer our clients both the simplest rental solutions for unattended diesel power plants and packaged power supply solutions involving large power plants (including those running on associated gas or crude oil) fully operated by our company. It’s only natural that in order for such a solution to be beneficial to both parties, the contract must be sufficiently long-term.

Hited: Our company, in cooperation with leading financial service companies, offers our clients special conditions for projects financing, including lease options and investment loans. Indeed, for pre-approval, just a basic package of documents is required. Thanks to our close cooperation and a vast experience of joint projects, our financial partners can offer HITED clients more beneficial conditions of the projects funding. This is due to the fact that our partner company is already aware of the realistic payback periods and potential risks for the projects.

The cost of purchasing and maintaining a power generation unit varies greatly. Where does your product sit within the price versus quality and run cost matrix?

Caterpillar Oil & Gas: We have an extensive product range suited for varying applications. We’re fortunate to have a comprehensive power range enabling us to work with our customers to tailor our solutions for their specific application needs. For example, in certain cases, customers want the most efficient equipment offered. In other instances, customers prefer a solution that tolerates a wide variety of fuel quality, which might diminish efficiency in favour of fuel flexibility. Depending on the customers’ key criteria, we have products to match their varying needs. The bottom line is that the customers’ specific application will determine our best power solution for them.

GE Power & Water: GE offers its customers highly-engineered products, which offer comprehensive value propositions both on capital expenditure and operational expenditure. More and more, lifecycle cost is the key factor why our equipment is selected repeatedly by customers.

HIMOINSA: HIMOINSA supplies top quality product at a reasonable price, we have some of the best quality machines on the market and you don’t pay a premium for the brand name that some competitors demand.

For long or medium period of power plant utilization, the operating (or run) cost is mainly the fuel consumption cost. HIMOINSA solutions propose the suitable generators configuration (Prime power or COP) as per the site need, to get the best performances (Consumption and maintenance periods). HIMOINSA generators are powered by the best quality of engines.

ZVEZDA-ENERGETIKA: It is true that our products are not the cheapest available in the market, as they are inherently designed to be very reliable, and to operate in harsh and extreme environments. However, this allows our clients to save money on running costs and maintenance. Some of our power plants have been continuously in operation for 9 years running on low quality associated petroleum gas, and they have paid off their cost many times during this period.

Hited: We are closer to the top of the list in terms of qulaity, and there are solid reasons for this. Going down this list is only possible through a deterioration in quality, as the prices and expenses are quite strictly pegged to this parameter. And there is another important point here – when you reduce the quality and, accordingly, the maintenance costs, you shorten the service life of the equipment, i.e. it will have to be replaced much sooner. So it turns out that you can save money today by reducing the operating expenses, but you’ll have to pay extra tomorrow. Therefore, in the long run, it is cheaper not to economise on maintenance.

Russia has many oilfields based in remote locations and in harsh environments. What power generation options are available – natural gas, diesel, crude oil etc – and which would you suggest that operators/drilling contracts use?

Caterpillar Oil & Gas: We have products that use all of the aforementioned fuels and are suitable for operation in cold environments. We also have Arctic enclosures that are designed to house our solutions if they need a containerized solution. Cat power has been reliably operating throughout the Russian region for decades. Today, we have solutions operating in extreme conditions ranging from the Sakhalin Islands to eastern Siberia. We recommend operators and drilling contractors contact the local Cat dealer for their region-specific needs, our local Cat dealer will provide the best solution based on their deep expertise, local and regional knowledge and understanding of the diverse needs of the Region.

GE Power & Water: GE’s Distributed Power business offers gas- and diesel-fuelled reciprocating engines. While diesel-fuelled products have many benefits, we think that gas engines, running on associated petroleum gas, are an attractive alternative for drilling rig operators, as they provide much lower fuel costs while also reducing environmental impact of operations.

HIMOINSA: HIMOINSA supplies Diesel, Natural Gas, Hybrid, Bifuel, Biogas and  LPG solutions.

ZVEZDA-ENERGETIKA: The simplest and most mobile option is using mobile diesel power plants. Clients can also save a lot of money using the option of power plants that run on crude oil. We offer both mobile and permanent plants in these options. Also, at the later stages of the field development, the most economically viable option is building a large power station running on associated petroleum gas. Our company has commissioned more than 20 such “turn-key” facilities including gas processing systems.

Hited: There is no “one-size-fits-all” formula for resolving the power supply problem. Using the generic solutions engineered by the HITED specialists, we select, within a short period of time, the solution that best meets the client’s needs. However, one should realise that each individual facility has unique characteristics that must be kept in mind when engineering a package solution. We offer equipment capable of running on any type of fuel.

For the most severe operating conditions, we have engineered solutions that involve fuel oil or crude oil using Mitsubishi engines. Power stations of 1 to 15 MW capacity make it possible to provide power to virtually any type of facility. When a gas of sufficiently good quality is available at the facility, solutions based on gas piston or gas turbine units may be used.

Diesel fuel solutions are better for facilities that require the power units to be mobile as much as possible, e.g. in the geological exploration sector.

Lifecycle costs and the availability of servicing and spare parts are key areas that operators and drilling contractors will look at when buying power generation solutions.  How can the user minimize the “cost per kilowatt” with your system?

Caterpillar Oil & Gas: Cat power solutions have developed the reputation for the lowest cost per kilowatt over the entire lifecycle of the product in the industry. At Caterpillar, our engineers start optimizing our solutions for the lowest owning and operating costs at the design stage. A key driver that benefits Cat customers in terms of minimizing the ‘cost per kilowatt’ is the legendary reliability and durability our products offer to keep on-going operating costs minimal. Additionally the Cat dealer network offers around the clock service and support, allowing our customers to keep their power generation costs minimal when it matters the most.

GE Power & Water: GE’s Distributed Power business has a wide range portfolio of high efficiency and fuel flexible engines that allows operators and contractors to enhance their operations based on quality of fuel, power requirements and other variable conditions. By tailoring solutions to each application our solutions allow attractive “cost per kilowatt” operation.

HIMOINSA: As Power Solutions provider, HIMOINSA designs the power plant to get the best performances by studying the suitable generator rating (Prime or COP), COP rating provides better engine consumption and major maintenance intervals are twice as long compare to Prime rating, and engine life can be multiply by two. As well, the selection of output voltage (high voltage = less loss of energy in wiring) and generators anciliaries quality (step-up transformer efficiency, cooling system) is having an impact on “cost per kilowatt per hour”.

HIMOINSA operates a network of dealer distributors throughout the region, where service and spare parts support can be localised to the operating areas.

ZVEZDA-ENERGETIKA: Our company has a large number of service engineers (over 250) and a network of service centres in the regions where our clients are located. The engineers have been trained at the equipment manufacturing plants and can perform most complex service operations. A certain spare parts inventory is always kept in the warehouses for quick access. Also, our products are designed to be repaired in place, without having to disassemble the major units.

Hited: The answer here is quite obvious and simple: the closer the spare parts storage and the servicing specialists are, the lower the servicing costs will be. Even if we consider reducing the operating expenses without sacrificing the quality, it will only be possible to save money on the spares delivery and the specialists’ travel expenses. That is why HITED is expanding the network of its branches – this makes the service more accessible to our local clients. We have decided not to use the services of third parties whose work quality we would be unable to control, but instead organise fully-fledged company offices in the largest cities of the most federal districts of the Russian Federation. Each branch has a fully functional spare parts and special tools storage, employs certified technical personnel, and has commercial sections. This allows us to ensure the consistent quality of work, increase the response speed, optimise own expenses and reduce the expenses of our clients.

How can a drilling contractor or operator optimize their power generation package once its onsite?

Caterpillar Oil & Gas: The key to optimizing power gen equipment once it is onsite is to follow installation guidelines, recommended maintenance practices and last but certainly not least, ensure that actual fuel quality matches the bandwidth of the original specifications.

GE Power & Water: Proper maintenance and service are key to run your power generation equipment effectively. In addition, GE provides its customers with possibilities of product upgrades throughout the units’ lifetime.

HIMOINSA: By taking care of a suitable maintenance of the generators (oil analysis …). By operating the suitable number of running generators (i.e., the operator must take care that all generators run at optimized kW (100% for COP rating, 75% for Prime rating), and the operator must take care about the power management (same number of running hours for each generator of the plant to balance the maintenance intervals)

The idea of optimising on site is probably a bit late. As every power expert knows, there are power transmission losses that increase with distance, so you need to keep the power package as close as possible to the biggest loads, but the real optimisation is done in the design to suit the load profile, to ensure you have suitably sized individual units that only run when the demand is there. The fuel savings can be dramatic.

ZVEZDA-ENERGETIKA: First of all, they should sensibly select the power package equipment based on the loads characteristics, work schedule, requirements to the electric power quality, and automation requirements and the integration into process management system in the field. Only a professional company with serious engineering potential is capable of selecting the most efficient power package configuration.

Hited: Optimisation is a trend of our times! The possibilities currently emerging to market are ready to ensure the completion of tasks even for the most exacting of customers.

If we are going to comply with the latest requirements of the market, we have to use the advanced technologies of monitoring, accounting and dispatching. A properly organised monitoring system allows the client to identify the possible areas for improvement in the equipment operation, which makes it possible to optimise the operation of the existing equipment and, therefore, leads to reducing the operating expenses.

Besides the requirement of collecting the details of the equipment operation, drilling contractors and operators often face the problem of unstable operation of power generation equipment in the conditions of dynamically changing loads. For such cases, we have got a solution based on “Uninterruptible Power Supplies” that allows us to optimise the operation of the existing equipment, increase the reliability and availability of operation and, in some cases, even reduce the capital expenses.

What systems do you have to enable real time remote monitoring of the unit?

Caterpillar Oil & Gas: Cat^® Connect is the industry’s broadest suite of integrated equipment and asset management service and solution offerings, leveraging various technologies to meet customer needs. Caterpillar has progressively rolled out the varied offerings in the Cat Connect portfolio on a regional basis throughout 2014. Included within Cat Connect is ProductLink™, a telematics solution enabling customers, dealers and enterprise users to remotely determine the location, operation and health of connected Cat products.  Cat Connect is now offered as a standard factory component for larger engines in the well servicing, gas compression, drilling and production applications worldwide. In addition to Product Link, Cat Connect utilizes a variety of technologies to connect to customer equipment. By combining these technologies with its deep domain expertise, Cat Connect includes Condition Monitoring services to provide Asset Managers with insight to emerging issues with both equipment operation and health. With this insight, Asset Managers can subsequently make informed decisions on how best to utilize available resources to proactively address operational and maintenance issues at the lowest cost and highest productivity.

GE Power & Water: GE offers all of its product lines with remote monitoring options as part of our products’ control system. Remote monitoring managed by the operator or contractor or alternatively by GE’s international service centers.

HIMOINSA: We can supply a variety of GSM modules that will report parameters to remote locations, or can be viewable over the internet.

ZVEZDA-ENERGETIKA: We develop and manufacture the management systems for our power plants in-house and, therefore, we can offer to our clients the option of real-time remote monitoring of each and every process at the facility.

Hited: To resolve the issues related to remote monitoring of power packages located at our clients’ sites, and also for the lease stock of HITED diesel power stations, we use our own remote monitoring system called RedPine. This software and hardware package is the best for increasing the reliability of the power system, for transparent accounting of power resources and provision of a high speed of information sharing, as it includes the entire required set of automated facilities for a state-of-the-art operations team. As often happens, the information regarding incidents from the field may be received may be delayed by more than 24 hours, which is absolutely unacceptable during field operations! The speed of decision-making, of establishing the causes and effects of incidents, taking actions to rectify the fault – all these factors affect the welfare of our clients and, therefore, our relations with them.

HITED has real-life experience of operating power units equipped with RedPine systems. We have learned from our first-hand experience that an immediate response to an incident and, what’s most important, the possibility to prevent the incident are sometimes invaluable.

APG, Associated Petroleum Gas, is a major issue, is Russia improving its utilization is a big consideration. Do you offer APG fuelled engines? What advantages do they offer?

Caterpillar Oil & Gas: We definitely offer APG-fuelled engines. We have products ranging from 100 kW to 10 megawatts that can use APG fuel. Built in the United States and Germany, our wide range of offerings for APG offer wide fuel flexibility and tolerance, which is their most significant advantage. Other benefits include broad load step capabilities and the ability to generate power with low cost fuel like flare gas. Additionally, Cat engines utilizing APG can be paralleled together. Customers can parallel our solutions to ensure their power needs are met far beyond 10 MW. Multiples of the units can be paralleled together to offer any size power plant the customer needs.

GE Power & Water: GE’s Distributed Power Jenbacher and Waukesha product lines are both offered in versions specially designed to handle associated petroleum gas and other hot gases. These units will run on the fuels with limited or no fuel treatment. We treat every project individually selecting products and service offerings based on the customers’ technical and economics needs.

HIMOINSA: Associated Gas can be used to power machines, the challenge is the gas itself. Petroleum gas does not have consistent properties, it is not a refined product, so the calorific value varies. Hence the power that can be produced from a given volume of gas varies. Add to this the complication of sour gas (H2S), which has the capacity to kill instantly or corrode stainless steel, then you have a bit of a challenge to overcome. Nevertheless this can be dealt with, but when you end up having to build portable gas scrubbers, then each application requires close scrutiny in an industry that already has one of the most challenging safety environments in the world.

ZVEZDA-ENERGETIKA: Our company has gained vast experience in building power plants running on APG, and we have commissioned over 20 large units to date. We offer modular equipment that minimises the construction and assembly work in-situ and reduces the commissioning period. Our solutions are based on gas piston or gas turbine units including the possibility of using gas that contains sulphur. We offer “turn-key” solutions that include designing, manufacturing, delivery and installation of all main and auxiliary systems including gas treatment, start-up and, if necessary, operation by the personnel of “ZVEZDA-ENERGETIKA”.

Hited: Being a provider of turnkey solutions, our company cooperates with all leading international manufacturers of power equipment. In APG utilisation, we offer solutions based both on gas turbine and gas piston units. When selecting the equipment, the key parameter is the APG composition. Once the gas test results become available to our specialists, they select the required equipment based on the customer’s objectives and financial capabilities. Our solution also includes the required number of power units, a fuel gas processing system (where necessary), and switchgears. This enables offering to our clients a complete solution that includes the services of power centre designing, and of delivery, installation, commissioning and servicing of the supplied equipment.

Venkat Jayaraman  
Caterpillar Oil & Gas Global Petroleum

Venkat Jayaraman is the land drilling and production segment Product Marketing Manager at Caterpillar Oil & Gas. In this role he is responsible for new product development and marketing of Caterpillar’s natural gas, dual fuel and diesel reciprocating engines for land drilling and production power applications in the oil and gas industry. Mr. Jayaraman joined Caterpillar Inc. in 1995 as a research engineer and since has held several positions of increasing responsibilities within the company in the areas of sales, marketing, manufacturing, R&D program management and general management. Mr. Jayaraman earned his master of business administration from University of Chicago and a master’s degree in mechanical engineering from the University of North Carolina at Charlotte.

Alexey Andreev
ZVEZDA-ENERGETIKA

A. Andreev was head of the Kronstadt Marine Plant Subsidiary – Turbokron providing  gas turbine engine and gas transfer unit overhauls. From 2006 to 2013 A. Andreev held the position of Commercial Director of JSC ZVEZDA-ENERGETIKA. Since 2013
A. Andreev has been the Company EPCM Division Head.

Ruslan N. Pakhomov  
GE Power & Water

Ruslan, a graduate of Moscow State Technical University n.a. Bauman, joined GE in 1997 and has held a number of leadership positions in GE Russia in Energy, Oil & Gas and Corporate. His experience includes Sales, Service, Sourcing and Market Development. 2007 – 2011 Ruslan was GE Energy’s Country Executive for Russia developing and implementing growth strategies for the business. From 2012 to 2013 Ruslan was General Director of energy machine building holding company NOVAEM, before returning to GE as Regional Executive for Russia/CIS for GE’s Distributed Power business.

Guillermo Elum  
HIMOINSA

Guillermo Elum studied Business Administration in Spain and has many years of experience in the power generation sector. From 2004 to 2008 he was Sales Director at Genelec, the French center of the HIMOINSA Group, manufacturing in the miltary sector. Elum is Sales and Marketing director at HIMOINSA. He knows the Russian market extensively and works directly with the main companies in the Oil & Gas sector, therefore he understands the industries needs and its key solutions. HIMOINSA offers gas generator sets wich are powered by environmentally friendly fuels, such as natural gas, LPG and biogas.

Alexander Makhnovsky
Hited

Graduated from Moscow Electronics and Mathematics Institute. More then 20 years spent working with autonomous, standby and uninterruptable power systems. He has 8 invention certificates in autonomous energy systems thematics. Alexander has been responsible for “Hited” technical development strategy and its implementation since 2001.