Methane Emissions in PEMEX: A Targeted Approach for Reducing Flaring and Greenhouse Gas Emissions

PEMEX Corporate Directorate of Operations United States Environmental Protection Agency (USEPA)

February 12, 2010

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Overview

Venting and Flaring

Introduction to Methane to Markets (M2M)

PEMEX M2M: Bottom-Up Analysis Measurement campaigns

PEMEX M2M: Top-down Analysis CH4 inventory model

Marginal abatement cost analysis results

Key CH4 Emissions Reduction Measures PEMEX M2M: Next Steps

Summary

Flaring and Venting Are Related

GGFR and M2M share common goals Reduce waste of associated gas resources Reduce worldwide Greenhouse Gas (GHG)

emissions Promote use of valuable clean energy source

Linking projects to address natural gas flaring and venting will: Improve climatic impacts by increasing

greenhouse gas reductions Improve economies of scale by combining two

wasted gas streams for recovery projects Enhance energy efficiency by making use of a

valuable energy resource Drive innovation for greater recovery and use

of gas CNH has integrated both venting and

flaring in its guidelines

Global Climate Impacts of Flaring Versus Venting

Greater volume of gas flared but climate impact of venting/fugitives is greater

1 EIA. 2005 Dry Natural Gas Production.2 GGFR. 2005 Estimated Flared Volumes from Satellite Data, 2005 - 20083 EPA. 2005 Global Anthropogenic Non-CO2 Greenhouse Gas Emissions: 1990-2020.

Global Natural Gas Production1

2,850 Bcm

GHG Emissions:2

~400 million tonnes CO2e

GHG Emissions:3

~1,500 million tonnes CO2e

Gas Flared:2162 Bcm

Gas Vented / Leaked:3 104 Bcm

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Background: Methane to Markets (M2M)

The Methane to Markets Partnership is an international initiative that advances cost-effective, near-term methane recovery and use as a clean energy source in four sectors:

The goals of the Partnership are to reduce global methane emissions to: Enhance economic growth Strengthen energy security Improve air quality and industrial safety Reduce emissions of greenhouse gases

Coal Mines Landfills Agricultural WasteOil and Gas Systems

M2M Partnership Organization

Steering CommitteeChair - USEPA

AgricultureChair UK

Co-Chair Argentina

Coal MinesChair US EPACo-chair India

Vice chair China

LandfillsChair Italy

Co-chair - Argentina

Oil and GasChair Mexico

Co-chair RussiaVice Chair Canada

Project Network Project Network Project Network Project Network

ASG(Administrative

Support Group EPA)

US Government commitment U.S. EPA coordinates efforts across the US Government

Other agencies participating are USTDA, USAID, Department of State, Department of Energy and USDA

Pledge of $53 million over five years to support technology transfer and project development

Mexico involvement Ministry of Environment and Natural

Resources (SEMARNAT) Participation on the Agriculture, Landfill, Coal

Mines and Oil & Gas Subcommittees Mexico represented by PEMEX , Co-presides

O&G Subcommittee with Russia and Canada

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Cost-Effective Mitigation Options Are All Along Oil & Gas Value Chain

Leaks from unprotected steel mains and service lines

Picture courtesy of American Gas Association

Venting of casinghead gas

Centrifugal compressor seal oil

de-gassing

Oil Production

Flash emissions from crude oil storage tanks

Reciprocating compressor rod packing

Venting from glycol reboilers on dehydrators

Gas-driven pneumatic devices

Well completions, blowdowns and workovers

Natural Gas Production & Processing

Venting of gas for maintenance or repair of pipelines or compressors

Leaks from pipelines, compressor stations

Gas Transmission

Leaks at metering and regulating stations

Gas Distribution

Pipeline blowdowns

Processing plant leaks

Why Do Companies Lose This Gas?

Unlike flares, vented emissions are not readily visible, yet they have a much greater GHG effect

Methane to Markets Resources

Resources to advance cost-effective oil &gas sector methane emission reductions:

General technology transfer, training, andcapacity building

Technical documents and research outliningover 80 mitigation options, including analysesof economic, environmental and operationalbenefits

Workshops and conferences Study tours

Individual assistance to help companiesidentify and assess project opportunities

Estimated methane emission inventories Pre-feasibility and feasibility studies Measurement studies

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PEMEX M2M Collaboration

Joint projects since 2006

Bottom-up analysis Measurement studies Project identification and

development

Top-down analysis PEMEX-wide methane

emissions inventory Economic analysis of

methane emissions mitigation options

PEMEX M2MMeasurement Studies

5 PGPB gas processing centers

1 PEP compressor station

Measured 12 million m3/yr CH4 Emissions reduction potential:

175,000 tonnes CO2e/y

Typical recommended projects Periodic leak survey and repair

Install compressor dry seals PEP Cunduacn

Identification of Fugitive and Vented Emissions

Natural gas is odorless and colorless, so leaks from valves, connectors, and open- ended lines go unnoticed

Leak inspection and repair surveys using leak detection technologies Infrared camera Ultrasonic detector Organic vapor analyzer Bubble tests

Source: Leak Surveys, Hand-held camera

Emissions Measurement

Verification of emission reductions and project scoping requires emissions measurement High volume sampler

measures emissions up to 14 m3/hour

Meters measure larger flow rates and vent lines

Calibrated bags measure vent emissions by timing inflation

Use of IR camera at Cunduacn Compressor Station

PEMEX Measurement Examples

Measurement of gas flow to flare (CPG Burgos).

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PEMEXM2M Baseline Methane Emissions Study

PEMEX and M2M have undertaken the first detailed inventory of PEMEX methane emissions and their mitigation potential.

Objectives Prepare a comprehensive baseline CH4 emissions inventory Estimate abatement potential that is technologically feasible. Quantify the costs and benefits of achieving incremental reductions. Provide a basis for PEMEX to prioritize methane emission reductions

as part of its climate strategy.

Study Period April July 2009

Bases of Analysis PEMEX DCO SISPA database equipment and component inventory 2008 data Emission factors: IPCC, API, USEPA, as well as measured data from PEMEX

where available

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CH4 Emissions Inventory - Findings

Total CH4 emissions estimate: 36.1 MtCO2e/y PEP accounts for 96% of total emissions. Uncombusted methane from flares is largest single source,

accounting for 78% of total emissions (2008 data).

PEMEX SubsidiaryAnnual

Emissions (tCH4)

Annual Emissions (MtCO2e)

% of Baseline Emissions

PEP 1,654,798 34.75 96.3%Flaring System 1,350,085 28.35 78.6%

PGPB 60,772 1.28 3.5%Gas Transmission 30,421 0.64 1.8%

PREF 2,826 0.06 0.16%

PPQ 211 0.00 0.01%

Total Annual CH4 Emissions 1,718,607 36.09 100%

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-$10

$0

$10

$20

$30

$40

$50

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0

Cumulartive Emission Reductions (MtCO2e)

Bre

ak E

ven

Pric

e ($

/tCO

2e)

-$18

$0

$18

$36

$54

$72

$90

$108

0% 20% 40% 60% 80% 100%

Reductions as Percent of Baseline

Req

uire

d G

as P

rice

($/M

MB

TU)

4% 9% 13% 18% 22%0%

MAC Analysis Findings (not including flaring)

Cost effective reductions = 1.6 MtCO2e/y

Value of gas recovered = $23 Million USD/y

Total Abatement Potential = 3.7 MtCO2e/y

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PEMEX MAC Analysis Results

Cost-effective abatement measures identified by the MAC analysis (not including flaring). Fuel gas retrofit on reciprocating compressors

DI&M processing plants

Reduce glycol circulation rates in dehydrators

Replace high-bleed pneumatic devices

Replace High-bleed pneumatic devices

DI&M - Compressor Stations

Install vapor recovery units on crude oil storage tanks

Surge vessels for station venting

Installation of Flash Tank Separators

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Importance of PEMEX MAC Model

Integrated software including: component-based inventory abatement options economic analysis graphical and tabular outputs

Specific to PEMEX Straightforward to use and understand Allows continual updating with new PEMEX data Based on over 15 years of international oil and gas

industry experience Includes fugitive emissions, venting and flaring Can serve as a model for a broader GHG analysis

Top Fugitive and Vented Emission Sources

Tank Venting Install vapor recovery units, micro-turbine generators

Pneumatic Instrument Venting Replace high-bleed with low-bleed or use instrument air

Fugitive Emissions Leak detection and repair program with infrared

technology

Compressors Fuel gas retrofit Economic rod packing replacement in reciprocating

compressors Replace centrifugal compressor wet seals with dry seals

M2M analysis, based both on MAC model, and on in-plant measurement campaigns

Tank Venting

Problem: Gas is vented from low-pressure crude oil and gas condensate storage vessels due to flashing, working, and standing losses

Best Practices: Vapor recovery towers (VRT) and units (VRU) capture tank vapors using compressors

Source: Anadarko, VRT Source: Hy-Bon Engineering, VRU

Pneumatic Instrument Venting

Problem: Process controllers, chemical pumps, and glycol pumps often vent pressurized natural gas used for pneumatic actuation

Best Practices: Retrofit high-bleed devices

to low-bleed Replace natural gas with

compressed air Use electric or solar

powered pumps

Directed Inspection & Maintenance Program

Best Practice: Identification, verification and project scoping for emissions reductions scoping requires emissions measurement

Team approach: identification; measurement/quantification; repair

Build capacity of operating staff Program for regular inspections Instrumentation: IR camera; high-volume

sampler; meters, calibrated bags

Compressor Methane Losses

Problem: Compressor seals are designed to leak gas; shutdown practices vent large volumes of gas

Best Practice: Economic replacement of rod packing Replace wet seals with dry seals Route blowdown gas to fuel

Source: CECO, Rod packing

Source: EPA, Dry seal schematic

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Possible Next Steps forCH4 Inventory / MAC Study

Methane Emissions Baseline Inventory Improve data on PEP emission sources to improve initial

estimates

Field studies to determine PEMEX specific emission factors for various PEP sources

Validation of assumptions and emission factors for 2009 inventory

Training on GHG inventory preparation

Mitigation potential study (MAC curves) Individualized MAC models for each PEMEX subsidiary

Additional PEMEX data integration into MAC model

Technical support on MAC model utilization

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Proposed Next Steps: M2M-PEP

Field Measurement Joint PEMEX M2M selection of PEP facilities as

sample measurement sites Up to 3 measurement campaigns in 2010

Project Implementation Support Identification and definition of CH4 emissions

mitigation projects

General Training event on E&P technologies and experiences

to raise awareness among decision makers

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PEMEX M2M Collaboration: Summary

Methane emissions reduction is both profitable and necessary under current regulation for PEMEX

Methane emissions reductions projects can play a prominent role in PEMEX commitment to national GHG emissions reductions

PEMEX - M2M have more than 3 years of successful and committed collaboration

Methane emissions program in PEMEX can be consolidated over 2010 special focus on PEP

PEMEX-M2M emissions reduction program has clear links to efforts to reduce flaring. Inventory and abatement analysis Measurement Emissions reduction measures

Thank You

For more information:

Carey Bylin bylin.carey@epa.gov

Mark Oven mark.oven@paconsulting.com

www.methanetomarkets.org

mailto:bylin.carey@epa.govmailto:mark.oven@paconsulting.comhttp://www.methanetomarkets.org/

Methane Emissions in PEMEX: A Targeted Approach for Reducing Flaring and Greenhouse Gas Emissions PEMEX Corporate Directorate of Operations United States Environmental Protection Agency (USEPA)February 12, 2010OverviewFlaring and Venting Are RelatedGlobal Climate Impacts of Flaring Versus VentingBackground: Methane to Markets (M2M)Slide Number 6Cost-Effective Mitigation Options Are All Along Oil & Gas Value ChainWhy Do Companies Lose This Gas?Slide Number 9Slide Number 10PEMEX M2MMeasurement StudiesIdentification of Fugitive and Vented EmissionsEmissions MeasurementSlide Number 14PEMEXM2M Baseline Methane Emissions StudyCH4 Emissions Inventory - FindingsMAC Analysis Findings (not including flaring)PEMEX MAC Analysis ResultsImportance of PEMEX MAC ModelTop Fugitive and Vented Emission SourcesTank VentingPneumatic Instrument VentingDirected Inspection & Maintenance ProgramCompressor Methane LossesPossible Next Steps forCH4 Inventory / MAC Study Proposed Next Steps: M2M-PEPPEMEX M2M Collaboration: SummaryThank You