Rising demand for energy efficiency solutions abroad may offer new, and expanding, opportunities for US renewable energy firms.
Omani state-owned oil firm Petroleum Development Oman (PDO) has awarded California-based GlassPoint a contract to build a pilot 7MW solar enhanced oil recovery (EOR) system at a an existing thermal EOR project in southern Oman.
The companies both discussed the appeal of solar enhanced oil recovery in the Breaking Energy stories Oil Majors Seek Power Of The Sun and The Geographic Realities Of Abundant Sunlight.
The Omani project is GlassPoint’s second solar EOR facility. The first, installed at US independent oil producer Berry Petroleum’s 21Z property in Kern County, California, is the world’s first commercial solar EOR project.
Thermal EOR involves the injection of steam, often generated by burning natural gas, into an oil reservoir to extract more crude. In sunny areas, GlassPoint estimates that its solar EOR systems–which substitute solar power for natural gas in steam generation–can reduce natural gas use by up to 80% in addition to cutting emissions.
“The goal of solar EOR is to reduce the amount of natural gas burned for thermal EOR, releasing gas for higher value applications, including power generation, desalination, industrial development and export,” said GlassPoint.
Strategic Solar
Glasspoint’s facility in Oman will be 27 times larger than its Kern County system. While the increase in project scale is considerable for the US firm, “for [PDO] it’s a drop in the bucket, it hardly scrapes the energy use”, GlassPoint CEO Rod MacGregor told Breaking Energy. GlassPoint estimates show projected Omani natural gas use for EOR projects at 200 million million Btu by 2015.
But if the initial project is successful, the system will be scaled up to full-field development, and could potentially be adopted at additional Omani thermal EOR operations.
“From our perspective there’s almost unlimited opportunity there for solar,” MacGregor told Breaking Energy.
MacGregor cited several conditions that make Oman an ideal location for its solar EOR systems: “the best sunshine, heavy oil, and the third thing that makes it even more compelling is that the country is short of gas.” A growing population and rising living standards require commensurate increases in electricity use, as well as continued oil exports to generate revenues.
“They really do have a strategic need for solar EOR,” he said.
And GlassPoint’s design could also draw the eye of other producers in the region using thermal EOR to maximize heavy oil production. Oman’s PDO is the Middle East’s leader in EOR, and “everyone else looks to PDO to see what they’re doing,” MacGregor said.
Read an Breaking Energy profile of GlassPoint’s technology: The Solar Powered Oil Rig.
Back At Home
It is unclear whether US-based competitors will try to take a share of the solar EOR market in Oman, or elsewhere in the Middle East. Existing solar EOR systems, such as GlassPoint’s system in Kern County, and US solar firm Brightsource’s pilot project underway at Chevron’s Coalinga field in California, use concentrating solar power (CSP) to generate steam for injection into fields.
CSP installation in the US is growing rapidly, according to the Solar Energy Industries Association (SEIA), which lists over 1,850 MW scheduled for completion in 2011-13.
But this listed new capacity is designed for power generation, not solar EOR. And GlassPoint may have a leg up on potential entrants into solar EOR in Oman and other locations with similar climactic conditions. Its units were designed specifically for the MidEast Gulf, encased in glass structures that protect solar panels from dirt, dust, sand, and humidity.
GlassPoint has a contract to operate the facility, expected to come on line in 2012, for one year before handing it over to PDO. There is no fixed timeline for full-field development, which will depend on the outcome of the pilot project. But “because of the gas shortage, I don’t think they’ll be dragging their heels”, MacGregor said.
PDO is 60% owned by the Omani government, and includes stakeholders Shell (34%), Total (4%), and Partex (2%).
