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grid – the catalyst, and the air used to transport it back from the cooler, were being very poorly distributed. This was causing a localised cold area that wasn’t burning carbon efficiently. The transport gas from the cooler was also generating large, oxygen-rich bubbles of gas that broke through the bed and then burned in the cyclones and ducts. A short-circuit from the cooler to the riser accounted for the high catalyst circulation rates. Click the link below to view a panel about the CFD technique Enlarge image d This unwanted situation was revealed by the ‘X-ray vision’ of the CFD technique, which also allowed the BP refinery engineers to see how various possible changes to the regenerator would affect performance. After trying several changes, they opted to install a two-armed distributor for the catalyst returning to the fluidised bed from the cooler at a higher location in the bed. According to the simulations, this would improve the temperature distribution and combustion. The modifications were made in July 2003 and the results were immediate. ‘The unit capacity and capability were improved straight away and production levels returned to design targets,’ says Lee. Following this success, other BP teams look set to use CFD to improve the throughput of other BP crackers. ‘It has the ability to improve the efficiency of combustion performance of all the FCCU regenerators in the group,’ says Lee. ‘This should increase overall processing capacity in units where combustion in the regenerator is a bottleneck for the FCCU.’ First filter While the CFD project at Bulwer Island sought to render the invisible visible, a separate initiative at BP’s Kwinana refinery in Western Australia managed to achieve just the opposite. This time, the aim was to virtually eliminate the visible emissions from a FCCU regenerator stack. The Kwinana FCCU has two regenerators running in series. Each regenerator is equipped with cyclones to prevent the catalyst escaping. Until earlier this year, however, some catalyst still ended up as fine dust in the flue gas, creating a visible plume from the second regenerator. ‘These dust particles are very small, measured in microns,’ explains Michael Glenny, BP’s principal specialist in catalytic cracking at Kwinana. ‘But there is worldwide pressure to clamp down on this type of particulate emission, and the environmental authorities in Western Australia have set stringent standards for this.’ From existing dust emissions of between 150 and 400 milligrams per normal cubic metre (mg/Nm 3 ) of flue gas in 2003, BP had to reach 2004 targets of between 150 and 250mg/Nm 3 . Furthermore, the regulations are expected to become even tighter in the future, with an anticipated overall limit of 50mg/Nm 3 , and strict control on particles less than 2.5 microns in size. Glenny and his colleagues considered several clean-up options, including installing a wet scrubber, adding still more cyclones or putting in an electrostatic precipitator. But in the end, a filter was the only technology thought likely to meet all emissions targets into the foreseeable future. The BP engineers opted for a filter from Pall Corporation – the first time such a unit has been used in an FCCU flue gas cleanup application. Installing a new filter at BP's Kwinana refinery has led to a reduction in dust particle emissions (bottom right) The massive filter vessel stands 20m high and is 3.5m in diameter. Inside are over 1000 sintered stainless steel filter elements. The flue gas enters the vessel and passes through the elements on its way to the stack. Catalyst dust particles build up in a cake on the outside of the elements until the pressure drop across the elements reaches a set limit. At that point, air flowing in a reverse direction is introduced and the filter cake is blown off the elements and removed. The elements are cleaned in rotation, with one sixth of them in the blowback sequence at a time. Using a filter in this application for the first time was not without its risks. ‘The main challenge is reliability,’ says Glenny. ‘The last thing we want is the filter to shut the FCCU down. That would cost hundreds of thousands of dollars a day.’ The biggest potential operating problems are erosion from the catalyst particles and corrosion from moist, acid flue gases. The engineers incorporated a combination of measures to minimise these risks, including over-sizing the vessel to reduce erosion and using hot gas for the blowback to keep the atmosphere dry. The filter was installed in June 2004, and is performing extremely well. ‘We are reading opacity measurements from the particles in the flue gas of less than 1%. This is equivalent to dust particles of less than 5mg/Nm 3 ,’ says Glenny. Other BP refineries are now looking to take similar steps and Glenny believes filters will eventually become standard equipment on FCCUs around the world. ‘My personal opinion is that in 10 to 15 years, only a filter-type arrangement will be acceptable in refineries,’ he concludes. Frontiers copyright and legal notice in all published material including photographs, drawings and images in this magazine remains vested in BP plc and third party contributors to this magazine as appropriate. Accordingly neither the whole nor any part of this magazine can be reproduced in any form without express prior permission, either of the entity within BP plc in which copyright resides or the third party contributor as appropriate. Articles, opinions and letters from solicited or unsolicited third party sources appearing in this magazine do not necessarily represent the views of BP plc. Further, while BP plc has taken all reasonable steps to ensure that everything published is accurate it does not accept any responsibility for any errors or resulting loss or damage whatsoever or howsoever caused and readers have the responsibility to thoroughly check these aspects for themselves. Any enquiries about reproduction of content from this magazine should be directed to the Managing Editor (email: knott@bp.com ). In this section Welcome from the Editor Delving deeper Drilling beyond the best Viewpoint: Productive scepticism High seas safety Cracking the case Fount of enthusiasm New plastics from old Insight: A riddle from the ice age Article tools Print this page Add to download folder Download Cracking the case (pdf, 756KB) Download Manager 0 items, 0.0 KB View back to top 1996-2005 BP p.l.c. | Legal Notice | Privacy Statement BP Global/Reports and publications/Fount of enthusiasm Hester Thomas learns"/> Site Index | Contact us | Reports and publications | BP worldwide | Home Search: About BP Environment and society Products and services Investors Press Careers BP Global Reports and publications Frontiers Issue 11 Issue 13 Issue 12 Issue 11 Issue 10 Issue 09 Archives Fount of enthusiasm Motivating people’s interest in engineering comes naturally to BP’s Meredith Short, who now has no shortage of opportunities to put her enthusiasm to the test, as Hester Thomas learns Meredith Short, BP’s project manager for Engineers Week ‘I feel engineering is the perfect fit for me, after trying jobs in other industries,’ says Meredith Short, speaking about her new role as Engineers Week project manager for BP. ‘I never knew an engineer when I was growing up. If I’d known what engineers do, my life might have been very different.’ At 32 years old, Short has secured a demanding and high profile post within BP. From BP’s bases in Houston and Sunbury she will be working with the great and the good – from personnel at the Engineers Week Foundation through to engineers and managers across the BP network, as well as with group chief executive officer Lord Browne. Engineers Week, founded in the USA in 1951 by the National Society of Professional Engineers, is a coalition of more than 70 engineering, education, and cultural organisations, along with over 50 corporations and government agencies. It aims to raise public awareness of the contributions engineers make to the quality of life – whether as mechanical, chemical, petroleum, electrical or other engineering professionals. In 2005, Engineers Week is scheduled to run in the USA from 20-26 February, while events in other countries will take place throughout the rest of the year. ‘In addition to raising public awareness, Engineers Week seeks to motivate young people to pursue an engineering education and career,’ adds Short. BP, as the leading industrial sponsor and co-chair with the American Society of Mechanical Engineers, intends to spread that message around the company and in the local communities around the world where BP operates. ‘Exposing youngsters to a technical curriculum and jobs interests me because for some people it may make a big difference. They may not be able to change careers later in life as I did.’ Changing tack Short’s appointment to Engineers Week project manager comes after having joined BP as a mechanical engineer just less than two years ago. While that rapid rise to responsibility may seem remarkable, her route into engineering is even more extraordinary. As a child growing up near Louisville, Kentucky, her two over-riding interests were building mechanical structures and vehicles with sophisticated LEGO kits – and reading novels. Deciding what to pursue at university was not easy. She considered both engineering and literature, but the smaller school atmosphere of a liberal arts college won out, leading Short to graduate in English literature in Ohio. During the university’s summer vacations she worked in a bank, and on graduating took the obvious step of joining the banking industry. For four years she moved from Kentucky to Indiana to Pennsylvania in a series of roles from retail branch manager to market coordinator. However, with the bank focusing on cost-cutting and failing to provide challenges, Short became increasingly dissatisfied. She opted for a career counselling session with an independent advisor, who, after an in-depth discussion, suggested two career options: accountant or engineer. She baulked at the idea of being an accountant. But becoming an engineer? Short, who by now was working with more advanced robotic LEGO sets, finally realised that learning to be a mechanical engineer was the right thing to do. Short enrolled at Montana State University-Bozeman. Being a mature student had its pluses. ‘At 28 years old, you’re better prepared for a course of study. You’ve got good time management skills and are more focused.’ High grades also meant that she attracted a number of scholarships. She always had her eyes set on the end-goal – a sound job. With that in mind, each summer she gained work experience in a different company. At the Jet Propulsion Laboratory in Pasadena, California, she joined the low temperature science and engineering group testing design features to be used on the International Space Station. She won a NOVA (Notable Added Value Award) for designing testing apparatus that would raise and lower a probe into liquid nitrogen. ‘I made the model out of LEGO,’ she says, smiling. ‘It was neat because I had PhDs coming by to see what they could create too!’ The next summer, she worked as an engineer at the university’s Space Science and Engineering laboratory. There she prepared computer models for the Montana EaRth Orbiting Pico-Explorer (MEROPE) satellite using 3-D modelling software. Although interested in America’s space programmes, Short decided not to take the jobs any further. ‘Many of the experiments which are carried out are done for pure science. While I understand the value of that, I prefer to work in areas where I can contribute to an obvious end-goal.’ Moving to oil At Conoco, she worked on capital and maintenance projects for crude and product pipelines plus their associated terminals and pump stations. It didn’t take long for her to realise that the industry was as good as she had perceived from outside, and the right place for her to be. BP made her an offer of full-time employment when she graduated. ‘I accepted because of the company’s reputation, the opportunities and the financial rewards,’ she says, candidly. Since then, the opportunities have come thick and fast. Short started as a project engineer at BP’s Cherry Point refinery in Blaine, Washington. Based in the projects group, she contributed to a variety of projects from pipelines transfer and heaters to health and safety. She also did a stint in reliability engineering, followed by turnaround planning for the hydrogen plant and reformer. The tasks both stretched and developed her project management skills. ‘My time management has become even better, I’ve learned about project controls, scheduling and estimating as well as how to get my hands on the best resources – both people and materials.’ However, it is in her latest role as Engineers Week project manager where all these skills will be honed – albeit in a completely different arena – while she also learns more about leadership. ‘BP will support the Engineers Week target of reaching up to 5 million primary and secondary school children in the USA to promote the importance of a technical education and engineering, through a range of projects,’ she explains. ‘Switching youngsters on to engineering is vital if companies are to maintain their technical base.’ Reaching out BP will also promote the goals of Engineers Week throughout the world externally and internally. In particular, the company is focusing on emerging markets and locations that have an extensive engineering resource and where it will continue to recruit engineers. These include the UK, Germany, Azerbaijan, Trinidad and Angola. Other countries may also be added. ‘We want to encourage ongoing participation by engineers in local school and youth programmes – such as the UK’s Schools Link Programme. We also want to recognise and show appreciation for the achievements of BP’s engineers.’ The success of Engineers Week will hinge, to a large extent, on the ability of participants to inspire their audiences. Short, who can beat the drum about engineering, talk enthusiastically about it, and motivate others to do the same, is a prime example of how engineering can offer a fascinating and varied career. ‘It’s been great and change has happened very fast. I’ve gone from mechanical engineering to an international job promoting engineering. I’m looking forward to experiencing more aspects of BP and being exposed to many different people and places.’ As for what she does when she’s not working – well, she always has a book near to hand. But more importantly, she’s still playing with LEGO. If you would like more information about Engineers Week please email Meredith.Short@bp.com or visit the website: http://www.eweek.org Frontiers copyright and legal notice in all published material including photographs, drawings and images in this magazine remains vested in BP plc and third party contributors to this magazine as appropriate. Accordingly neither the whole nor any part of this magazine can be reproduced in any form without express prior permission, either of the entity within BP plc in which copyright resides or the third party contributor as appropriate. Articles, opinions and letters from solicited or unsolicited third party sources appearing in this magazine do not necessarily represent the views of BP plc. Further, while BP plc has taken all reasonable steps to ensure that everything published is accurate it does not accept any responsibility for any errors or resulting loss or damage whatsoever or howsoever caused and readers have the responsibility to thoroughly check these aspects for themselves. Any enquiries about reproduction of content from this magazine should be directed to the Managing Editor (email: knott@bp.com ). In this section Welcome from the Editor Delving deeper Drilling beyond the best Viewpoint: Productive scepticism High seas safety Cracking the case Fount of enthusiasm New plastics from old Insight: A riddle from the ice age Article tools Print this page Add to download folder Download Fount of enthusiasm (and Insight: A riddle from the ice age) (pdf, 891KB) Download Manager 0 items, 0.0 KB View back to top 1996-2005 BP p.l.c. | Legal Notice | Privacy Statement BP Global/Reports and publications/New plastics from old Nina Morgan investigates a new way to recycle plastics"/> Site Index | Contact us | Reports and publications | BP worldwide | Home Search: About BP Environment and society Products and services Investors Press Careers BP Global Reports and publications Frontiers Issue 11 Issue 13 Issue 12 Issue 11 Issue 10 Issue 09 Archives New plastics from old An innovative BP recycling initiative is promising to improve Europe’s environmental and recycling performance, and provide a buffer against rising polymer feedstock costs. Nina Morgan investigates a new way to recycle plastics Waste must be the ultimate renewable resource – it is constantly generated, readily available and has potential for a wide range of uses. Thanks to greater public awareness of environmental issues, coupled with European Union environmental legislation and rising landfill charges, there is a growing demand for all forms of recycling, and because plastics take up such a large amount of space in the average household refuse bin, the demand for plastics recycling is particularly strong. Making the most of the plastics we discard is the aim of a BP-led project known as SPORT (sustainable polymers to olefins recycling technology). The fundamental approach is to break waste plastics down into their basic building blocks so that these can be used again. According to PlasticsEurope, the European association of plastics manufacturers, in 2003, some 3.1 million tonnes of plastic waste, equivalent to almost 15% of western Europe’s total collectable plastic waste, were mechanically recycled by conventional methods, compared to around 22% of the total being incinerated for energy recovery – SPORT could help significantly improve recycling performance. ‘I’m passionate about this project because it promises to benefit both BP and society in a material way,’ says Graham Rice, project leader for sustainable polymers based in BP’s olefins and derivatives chemicals business in Sunbury, who instigated the project in 2002 and has championed it since. ‘There is a substantial, albeit dispersed, resource of hydrocarbons in the form of waste plastics just waiting to be exploited. With the outlook for a sustained high oil price, and hence high polymer feedstock costs, the time is now right for polymer manufacturers to exploit this waste plastics resource. BP is ideally placed to take the lead with its second generation proprietary Polymer Cracking technology.’ If all goes according to plan, Rice won’t have to wait long to see his dream start to come true. A SPORT demonstration plant, capable of processing between 30,000-50,000 tonnes per year of waste plastic could soon be feasible. Polyethylene pellets: BP’s SPORT process is designed to recycle used plastics back to their ‘virgin’ form More than solid oil All mainstream plastics today are made from feedstocks derived from virgin oil and gas. ‘Conventional thinking is that waste plastics are essentially solid oil,’ explains Rice, ‘and that if they cannot be recycled cost-effectively using purely mechanical means, then the next best option is to burn them as a fuel to recover their energy. While this is true for yesterday’s technology, it need not be true for tomorrow’s. Plastics are certainly much more than solid oil – a great deal of processing has gone into converting the oil into plastics, through refining, cracking and polymerisation. By partially reversing the process through SPORT’s Polymer Cracking technology, it is possible to manufacture valuable petrochemicals from waste plastics, more cheaply and using less energy than manufacturing them from virgin oil, while at the same time conserving valuable resources.’ Over the past two years a series of technological innovations has transformed BP’s Polymer Cracking technology into a highly energy efficient process. However, this alone is not enough. Of equal importance is the supply chain, adds Rice. ‘The overall life-cycle environmental performance of recycling plastics through SPORT must be better than the energy recovery alternative if the process is to earn wide acceptance. The trick is to shape the supply chain to meet our needs, and optimise the critical interface between supply chain and recycling process. Integrating the waste industry with the chemical industry in order to convert plastics – which are contaminated with just about everything you can think of – into pure ethylene and propylene will certainly not be easy. This has never been done before, but there is a strong will among the various stakeholders to make it happen. Together, I believe we can do this.’ SPORT is a ‘rational green project’ in that its distinctive environmental, social and marketing value is built on sound economic foundations of long-term, low-cost feedstocks. The aim is to decouple a portion of current polymer feedstocks from the oil price, and meet the growing market demand for high quality recycled plastics. Recycling plastics in this way, Rice believes, will help to conserve oil reserves, fight climate change and create ‘green jobs’ throughout Europe. In effect, this is a pioneering step towards improving the sustainability of polymers. A life-cycle assessment carried out by an external consultancy, the URS Corporation, confirmed that SPORT would offer substantial improvements in using resources more efficiently and in conserving non-renewable hydrocarbon resources. There would also be reductions in greenhouse gas emissions compared to virgin polymer manufacture, plus reductions in the amount of waste going to landfill. And, importantly, it would ensure that Europe’s waste plastics are recycled locally in a safe and responsible manner. Open and closed cases The existing recycling schemes for polyolefins – polyethylene (PE) and polypropylene (PP) – are ‘open loop’ mechanical processes. The plastics are sorted, washed, melted and reformed into lower grade products such as garden compost bins, water butts, bollards, fence posts and garden furniture. For technical performance and consumer safety reasons, they are rarely recycled back into their original applications such as food packaging. Although this approach is good in theory, in practice the recycling of mixed plastics raises some environmental and social concerns. For example, more than a third of the plastic waste collected in the UK is exported, where sorting and reprocessing may not be carried out to the best safety and environmental standards. In addition, the polymer end-use industry is highly technical – manufacturers normally require polymers tailored in terms of molecular weight and structure, with additives and formulations to match their own conversion processes and end-use requirements – hence mechanically recycled plastics will never be able to replace new plastics in many applications. In contrast, SPORT employs ‘closed loop’ recycling technology by which waste plastics are broken down, or ‘cracked’, to create ‘virgin’ raw materials or feedstocks (see link below to a graphic of the SPORT process). The small molecules produced, such as ethylene, propylene and benzene, are easily purified to create a low cost feedstock identical to the virgin feedstocks used for the manufacture of PE, PP and polystyrene (PS). Click the link below to view a graphic of the SPORT process Enlarge image d Closed loop recycling is already in common use in the paper, glass and metals industries, where scrap is broken down to provide an economical source of feedstock for the manufacture of new products. ‘SPORT technology would put plastics on a par with these materials in terms of recyclability and closed loop use of resources,’ says Andrew Simmons, chief executive officer at RECOUP, a national stakeholder body working to increase efficient household plastics recycling in the UK. ‘Turning used plastics back into new polymers offers a major step forward in sustainable plastics consumption and use. Successful implementation of SPORT would provide an environmentally sound recycling outlet for hundreds of thousands of tonnes of plastics currently landfilled in the UK, and would result in energy savings and a reduction in carbon dioxide emissions.’ SPORT is designed to handle all types of waste PE, PP and PS, taking in everyday items such as cereal and pasta packets, carrier bags, milk and bleach bottles, yoghurt pots, margarine tubs and shrink wrap. Together this packaging accounts for more than 80% of household waste plastics in the UK. SPORT can tolerate a certain amount of other plastics such as polyethylene terephthalate (PET) and polyvinylchloride (PVC), though these are not the target materials for recycling. ‘A key advantage of SPORT,’ adds Paul Davidson, materials sector manager for plastics at WRAP, ‘is that it provides a more sustainable solution to the waste management of mixed plastics, which are hard to recycle by other means.’ WRAP is the Waste and Resources Action Programme, an organisation supported by a number of UK government departments and which works to accelerate resource efficiency by creating markets for recycled materials and removing barriers to waste minimisation, re-use and recycling. Linking up the supply chain Location and timing will play a large part in the success of the supply chain development. Location is important because SPORT needs to be on a petrochemical and refinery site to maximise the value of all by-products, and also needs to be well connected by sea, rail and road to optimise the transport efficiency of materials. Timing is important because changes to waste and recycling collection and sorting infrastructure are expensive – and any shaping of the supply chain to meet the needs of SPORT must be aligned with the UK’s National Waste Strategy. BP’s Grangemouth site is a good candidate not only because of the PE and PP production facilities it offers, enabling the waste plastics to be turned full-circle back into new plastics on one site, but there is also a unique window of opportunity over the next few years in the UK to shape the supply chain. Changes that local authorities will soon make to their collection infrastructure are expected to endure for around 20 years. The opportunity to back-load the deliveries of virgin polymer from Grangemouth with waste plastics to minimise transport costs is being investigated, as is the possibility of co-locating a material reclamation facility (MRF) with SPORT. An integrated approach to material recycling is essential, and Grangemouth is well placed to serve as an MRF hub for all types of recycling. Along with a plentiful source of waste plastic, there are also major aluminium, steel, glass and paper producers located relatively nearby – paper represents over two thirds of the weight of recycled material from households. In addition, the local authorities are keen to support recycling. Other possible locations for closed loop plastics recycling facilities include BP’s sites at Lavéra in France and Köln in Germany. Creating a supply chain for SPORT that pleases everyone will not be easy, admits Rice. On the one hand, local authorities want a collection scheme that is cheap and simple to use, to ensure high participation. This usually involves co-mingling as many types of dry recyclable materials as possible. On the other hand the waste management companies would prefer separate material collection, which is more costly, but makes it easier for them to meet the quality specifications of the recyclers of each material. It’s a tall order, but given the very substantial environmental benefits this project could deliver and the potential transformative effect on the way plastics are produced and reused, Rice believes it is a challenge well worth rising to. Frontiers copyright and legal notice in all published material including photographs, drawings and images in this magazine remains vested in BP plc and third party contributors to this magazine as appropriate. Accordingly neither the whole nor any part of this magazine can be reproduced in any form without express prior permission, either of the entity within BP plc in which copyright resides or the third party contributor as appropriate. Articles, opinions and letters from solicited or unsolicited third party sources appearing in this magazine do not necessarily represent the views of BP plc. Further, while BP plc has taken all reasonable steps to ensure that everything published is accurate it does not accept any responsibility for any errors or resulting loss or damage whatsoever or howsoever caused and readers have the responsibility to thoroughly check these aspects for themselves. Any enquiries about reproduction of content from this magazine should be directed to the Managing Editor (email: knott@bp.com ). In this section Welcome from the Editor Delving deeper Drilling beyond the best Viewpoint: Productive scepticism High seas safety Cracking the case Fount of enthusiasm New plastics from old Insight: A riddle from the ice age Article tools Print this page Add to download folder Download New plastics from old (pdf, 156KB) Download Manager 0 items, 0.0 KB View back to top 1996-2005 BP p.l.c. | Legal Notice | Privacy Statement BP Global/Reports and publications/Insight: A riddle from the ice age Frontiers ’ anecdotal series from BP’s technology community, Peter Metelski , senior research scientist in the group’s petrochemicals business in the USA, highlights an unusual application for expertise in analytical chemistry"/> Site Index | Contact us | Reports and publications | BP worldwide | Home Search: About BP Environment and society Products and services Investors Press Careers BP Global Reports and publications Frontiers Issue 11 Issue 13 Issue 12 Issue 11 Issue 10 Issue 09 Archives Insight: A riddle from the ice age In Frontiers ’ anecdotal series from BP’s technology community, Peter Metelski , senior research scientist in the group’s petrochemicals business in the USA, highlights an unusual application for expertise in analytical chemistry While on a photographic expedition to the Kobuk Desert in central Alaska, zoologist Ray Pawley came across some remarkable rock structures whose odd shape intrigued him. He speculated that the rocks might have originated as the urine of migrating mammoths during the last ice age. But how to prove it? The mysterious rock structures (above left) were discovered in Alaska’s Kobuk Desert (map above right) Pawley connected with BP scientists Gerry Zajac and Jim Kaduk, analytical technology specialists working at BP’s Naperville research facility in Illinois. They found traces of organic nitrogen in a sample of the rock, supporting Pawley’s theory that the Kobuk rocks might once have been urine. But determining the age of the individual components of the sample was critical to proving its origin. Fortunately BP also had the means to do just that. In Naperville, our team of BP scientists has developed a technique for tracing the origins of carbon oxides in combustion processes. We applied this to the rock sample, enabling us to extract carbonates from the sample to separate the ‘old’ carbon from geological sources from the relatively ‘new’ carbon arising from biological sources. The technique dated the Kobuk structures at 9500 years old, corresponding nicely with the migration of mammals at the end of the last ice age about 10,000 years ago. The scientific evidence supports the idea that the rock structures are the result of passing mammoths. BP scientists are continuing to monitor the study of the unusual Kobuk samples, as their history is unravelled. Frontiers copyright and legal notice in all published material including photographs, drawings and images in this magazine remains vested in BP plc and third party contributors to this magazine as appropriate. Accordingly neither the whole nor any part of this magazine can be reproduced in any form without express prior permission, either of the entity within BP plc in which copyright resides or the third party contributor as appropriate. Articles, opinions and letters from solicited or unsolicited third party sources appearing in this magazine do not necessarily represent the views of BP plc. Further, while BP plc has taken all reasonable steps to ensure that everything published is accurate it does not accept any responsibility for any errors or resulting loss or damage whatsoever or howsoever caused and readers have the responsibility to thoroughly check these aspects for themselves. Any enquiries about reproduction of content from this magazine should be directed to the Managing Editor (email: knott@bp.com ). In this section Welcome from the Editor Delving deeper Drilling beyond the best Viewpoint: Productive scepticism High seas safety Cracking the case Fount of enthusiasm New plastics from old Insight: A riddle from the ice age Article tools Print this page Add to download folder Download Insight: A riddle from the ice age (and Fount of enthusiasm) (pdf, 891KB) Download Manager 0 items, 0.0 KB View back to top 1996-2005 BP p.l.c. | Legal Notice | Privacy Statement BP Site Index | Contact us | Reports and publications | BP worldwide | Home Search: About BP Environment and society Products and services Investors Press Careers BP Global Site Index Site Index About BP BP at a glance Who we are - Our brands - Our history - Group organization - The board - World advertising What we do - An overview of BP - Exploration and production - Pipelines and shipping - Refining and marketing - Gas and power - Petrochemicals - Renewable and alternative energy Where we operate - BP worldwide How we run the business - 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Being a leader in technology development and commercial innovation – and doing it simultaneously on many different fronts – is not often achieved when a company has a portfolio of businesses as diverse as that operated by BP. But it does sometimes happen, as the features in this issue of Frontiers demonstrate. We learn of the importance of liquefied natural gas (LNG) in BP’s strategy for building its energy business in the Atlantic and Mediterranean basins, and the spearhead provided for this by Europe’s first integrated LNG import and power station project in Bilbao, Spain. We find how BP has led the way in developing a new high strength steel for constructing long-distance gas pipelines, which offers significant practical and economic advantages. We explore how the rapid evolution of hydrotreating technology has been brought to bear on the production of new low-sulphur fuels in BP’s refineries, and the way that BP’s excellent safety record in its petrochemicals laboratories and pilot plants is being taken to an even higher level. And we discover how the giant Thunder Horse offshore development in the deep waters of the Gulf of Mexico has successfully led to a whole new generation of components for completing the very long wells drilled into this high pressure, high temperature reservoir. Impressive achievements when viewed individually – and more so when taken together as marks of simultaneous progress across the BP group. Terry Knott, Managing Editor Frontiers copyright and legal notice in all published material including photographs, drawings and images in this magazine remains vested in BP plc and third party contributors to this magazine as appropriate. Accordingly neither the whole nor any part of this magazine can be reproduced in any form without express prior permission, either of the entity within BP plc in which copyright resides or the third party contributor as appropriate. Articles, opinions and letters from solicited or unsolicited third party sources appearing in this magazine do not necessarily represent the views of BP plc. Further, while BP plc has taken all reasonable steps to ensure that everything published is accurate it does not accept any responsibility for any errors or resulting loss or damage whatsoever or howsoever caused and readers have the responsibility to thoroughly check these aspects for themselves. Any enquiries about reproduction of content from this magazine should be directed to the Managing Editor (email: knott@bp.com ). In this section Welcome from the Editor Thunderous innovation Iberian energiser Refinery rejuvenation X times stronger Oiling the works Sharing safety Viewpoint: Between hype and cynicism Insight: Chalk, oil and red wine Article tools Print this page Add to download folder Download Frontiers 10 front section (pdf, 1051KB) Download Manager 0 items, 0.0 KB View back to top 1996-2005 BP p.l.c. | Legal Notice | Privacy Statement BP Global/Reports and publications/Thunderous innovation Site Index | Contact us | Reports and publications | BP worldwide | Home Search: About BP Environment and society Products and services Investors Press Careers BP Global Reports and publications Frontiers Issue 10 Issue 13 Issue 12 Issue 11 Issue 10 Issue 09 Archives Thunderous innovation BP’s field developments in the deep waters of the Gulf of Mexico are setting new benchmarks in almost every aspect of offshore engineering. Terry Knott takes a look at the pioneering work done in one particular area – completing the oil and gas wells for the largest of the fields, Thunder Horse In an industry where technology achievements frequently attract analogies with the space programme, finding new superlatives for oilfield successes can be a little tricky at times. But some achievements stand clear of the pack with or without a catchy superlative label. In this regard, the Thunder Horse development in the Gulf of Mexico is unmistakably accepted as one of the most ambitious offshore field developments ever undertaken. Located 190km south of New Orleans, the Thunder Horse field is the largest discovery in the region to date. But along with the abundance of reserves, comes a set of challenges of equal if not greater magnitude to recover them. For the Thunder Horse reservoir lies beneath some 6000m of mud, rock and salt, topped by 1900m of ocean. To reach the hydrocarbons requires some of the longest deviated wells in the world, which when they enter the reservoir are greeted by a combination of formation pressure and temperature rarely encountered in the Gulf of Mexico or anywhere else – over 1200 bar and 135°C. In other words, everything about Thunder Horse is at or beyond the limits of the offshore industry’s experience. And that means that tried and tested off-the-shelf solutions that have served the industry well over time, are few and far between when it comes to meeting Thunder Horse’s inherently difficult operational demands. Over the past four years since field operator BP and its development partner ExxonMobil embarked on the Thunder Horse project, an army of industry vendors and specialists has been involved in an unprecedented collaborative programme of equipment development, testing and qualification, to come up with a new generation of engineering solutions to handle the field’s unique combination of challenges ( Frontiers , September 2001 - click link below to view PDF of article). Frontiers 01 (September 2001): Deep thinking (pdf, 557KB) On the seabed where the field’s wells are located, new subsea valve trees and manifolds, and their control systems, have had to be designed and built to withstand the huge pressures, both internal and external. From those subsea wells, steel flowlines taking hydrocarbons several kilometres across the seabed must be insulated against near-freezing sea temperatures to prevent ice-like hydrates forming in the lines – the project has also developed a new low dosage chemical hydrate inhibitor which will be injected into the hydrocarbon stream to help prevent hydrates. And a range of steel catenary risers, longer and stronger than any before – some are up to 600mm in diameter with walls thick enough to make them resemble gun barrels – have been designed to take the gathered well fluids on their long journey to the sea surface and the field’s central processing hub. Here the well fluids will be handled onboard the world’s largest production semisubmersible, a floating production, drilling and quarters (PDQ) platform with a displacement of 130,000 tonnes (pictured below). The platform is currently being constructed in South Korea, and is scheduled to be transported to Corpus Christi in Texas later this year, and then to its moored location offshore in 2005. The list of development breakthroughs is formidable even by the standards of large oil industry projects, pushing technical know-how out to new boundaries. In operation, many of these equipment developments will be out of sight beneath the waves. Another set of first-time achievements will be even more invisible – deep down inside Thunder Horse’s wells. The Thunder Horse PDQ platform will be the central hub for the development Risk reduction ‘The wells on Thunder Horse presented us with many new challenges,’ says Bill Kirton, BP’s wells delivery manager for the project. ‘In addition to the very high bottom hole pressures and temperatures, the production rate from individual wells is also high, up to 50,000 barrels per day (bpd) in some cases. This means we needed larger bore tubing inside the wells than is normally used in the Gulf of Mexico, up to 150mm internal diameter, and high strength materials to construct it. On top of this the wells are really deep, stretching to 8200m vertical depth, and drilling the wells has to be carried out from 1900m above the seabed. ‘When we started out we acknowledged the uncertainties were many. And sometimes we didn’t even know what we didn’t know.’ Reducing those uncertainties was aided by forming a strong drilling and completions team comprising hand-picked people from BP and ExxonMobil with experience of high pressure, high temperature (HPHT) developments elsewhere. BP’s ‘Beyond the Best’ process for drilling and completions was employed to strengthen front-end planning, risk assessment and quality assurance activities. Another essential ingredient was the integration of key contractors and vendors into the team, with funding of new technology development where none existed that was capable of meeting the duties required for Thunder Horse. While a close eye was kept on up-front costs – there are more than 25 wells currently envisaged for Thunder Horse – Kirton notes that safety, protection of the environment, and subsequent well performance during operations, took precedence on the project. Click the link below to view graphic: 'Thunder Horse well completion' Enlarge image d Large and small alike High on the team’s list of new engineering challenges to be addressed were the completions for the wells – the complex system of tubing, valves and barriers installed inside the wells following the drilling operation, which channels hydrocarbons safely from the reservoir producing zone to the wellhead on the seabed. Ensuring the completions were designed correctly, and that they could be installed from the sea surface, was critical, as Eamonn O’Connell, leader of the completions engineering design team, explains. ‘Each completion on Thunder Horse costs tens of millions of dollars. It is vital to get each one right first time, because if a well fails, the entire string of completion components must be pulled out of the well for repair – intervention like that can cost as much again, and you lose hydrocarbon production while you do it. ‘The tendency in the past has been to focus on the really expensive components in the completions string. But it’s often the small widget that can catch you out. We acknowledged these smaller components to be of equal importance for the project and developed a quality assurance programme which would give them equal attention.’ Reflecting the complexity and magnitude of the completions task, an early move in 2002 was to split the activities into two teams – O’Connell’s design team would focus solely on designing, developing and testing new components, while an operations delivery team under Steve Schellenberg would turn its attention to the intricate procedures that would be required for the installation of the completions equipment from the state-of-the-art deepwater drillship Discoverer Enterprise . O’Connell notes that having five completions engineers in the design team alone, compared to a more usual one or two, was an indication of the work that had to be done. ‘We were doing virtually everything from scratch, and had to question even the most basic assumptions. For example, with wells flowing at 50,000bpd, could the whole completions string vibrate itself to pieces? Answering such questions required an extensive testing and quality assurance programme for the many new components. It is astounding to think that of the 32 major components in a 140mm diameter Thunder Horse completions string, 18 of these are classed as “Serial Number Ones” – that is to say, they are the first of their kind ever made. You might expect one or two Number Ones in a completion. But certainly not eighteen.’ The 18 new design components were just the tip of the iceberg – a further seven were existing designs that had to be modified. And by the time the operations team had developed ways to install and operate the completions strings, a further 89 Serial Number Ones were notched up. Delivering Number Ones The new equipment was developed in close conjunction with the coalition of contractors and vendors in the Thunder Horse team, often by asking more than one supplier to come up with competing solutions to solve a given problem. Important to the success of this approach was having ‘informed in-house buyers’ from BP to monitor developments, challenge decisions, and make selections on which products were best aligned with the project’s ‘fit-for-function’ philosophy. ‘While this multiple supplier methodology increases overall workload and creates additional cross-company interfaces, the net result is beneficial,’ says Kirton. ‘The development programme on Thunder Horse has yielded a range of qualified products, making competitive alternatives available at reasonable cost. This is good for the wider offshore industry, particularly as we move into deeper and deeper waters.’ Funding for design, development and testing was provided for several key items. Among these are the subsurface safety valves (SSSV), one of which sits in each well some 3000m below the seabed. In the event of hydraulic power being lost to control the well, this valve automatically closes to act as a barrier to hydrocarbon flow. To develop and deliver such a valve to handle the high pressure, extreme depth and large tubing sizes on Thunder Horse, took 18 months, with two of the industry’s leading suppliers working on the SSSV programme. Advanced electronic downhole gauges for measuring pressure and temperature were also developed anew, as were new packers for sealing off the annular space between the production tubing and well casing outside it – outside tubing diameter is 178mm while the inner casing varies from 250mm to 298mm in diameter. Click the link below to view the nitrogen gas cap graphic Enlarge image d Another Serial Number One focused on the packer fluids which are used to fill that sealed annular space. The hot oil flowing inside the tubing can cause the packer fluid to expand, rapidly building up pressure in the sealed annulus. This can particularly occur during well startup when packer fluid is very cold, an effect which in extreme circumstances could conceivably collapse the tubing or burst the casing – or vice versa during cooling contractions during shutdown. Normally, in conventional wells, this pressure is bled off into the flowline from the well, but as the pressures in the Thunder Horse flowlines are so high, this technique is not practical. Instead the completions team developed a method for placing a nitrogen gas cap in the annulus above the packer fluids, which absorbs the effect of the changing packer fluid volume. ‘The nitrogen cap acts in a similar way to a car’s shock absorber,’ adds O’Connell. ‘This is the first time this has been done in a deepwater subsea well.’ (See diagram on page 11.) The packer fluid itself is also a Serial Number One in the industry, a nine-month development fulfilling several operational criteria. These include the packer fluid being water-based for added safety, lightweight to meet the well casing design criteria, and low viscosity to enable pumping from and to the surface. In addition, the packer fluid is hydrate-inhibited to prevent freezing, environmentally friendly, and long-term compatible with downhole metallurgy, elastomer seals and the nitrogen gas cap. The design of the tubing string also presented a challenge. With such long wells with high pressures and high flowrates, it was difficult to design a large bore tubing string that met all of the design requirements. The weight of the completion, which is suspended from the tubing hanger at the top of the well, can reach almost 250 tonnes before it is landed in the well and the packer is set. When the well is flowing, the tubing is subjected to further loads that approach the limits of existing tubing hanger connection ratings. ‘Rather than the usual practice of accepting a single standard minimum wall thickness throughout the tubing string,’ explains O’Connell, ‘we modelled each well to determine precisely what forces the tubing will experience at different points in the well. Then, we worked with the tubing vendor and reviewed wall thickness inspection reports of thousands of joints of similar tubing. We then applied statistical analysis to predict the actual wall thickness of each joint of tubing that we ordered. This enabled us to custom-fit the wall thickness of the tubing to match the force resistance profile of the well, being strongest where it needs to be, giving us an optimised design to reduce overall tubing weight. The thickness only varied by about 2mm, but over an 8000m-long completion, this adds up significantly in terms of weight saved.’. The presence of hydrogen sulphide in the well fluids requires a special steel alloy to be employed for manufacturing the tubing, in order to resist potential corrosion cracking caused by hydrogen embrittlement of the steel. A 25% chrome alloy high-strength steel is being used, with which the industry has only limited experience, requiring a significant testing programme focused on such characteristics as its long-term performance at high pressures and temperatures – steel strength reduces with increasing temperature – and the integrity of joint connections. As the alloy is slightly ‘softer’ than standard tubular steel, it tends to mark more easily, providing sites for potential corrosion; hence new handling equipment has been developed by the project for installation operations. The tubing hanger was one of several components for which full-scale ‘mock-ups’ were built, enabling the operations crew to become familiar with the equipment in advance of its installation. For installation, the tubing is made up on the Discoverer Enterprise in joints, and lowered down to the well through the drilling riser. At the same time, hydraulic and electrical control lines, connected to downhole tools and sensors in the well, are spooled from large reels and clamped onto the outside of the tubing string, eight lines in all. These lines are encapsulated with a strong thermoplastic cover for protection while sliding down the wellbore. The lines must be cut, the thermoplastic covers stripped, and the lines connected to the tubing hanger at the surface so that connectivity will be maintained with each tool and sensor in the well. Traditionally, the plastic ends have been removed manually using a sharp knife, a tough two-handed operation with inherent safety risks. This practice too was subjected to improvement by the completions team – originating from one BP employee in his garage at home – resulting in the development of a new suite of blade-free cutting, bending and connection-making tools for downhole control lines. The team has developed new blade-free cutting, bending and connection-making tools Water and sand As if the detailed structural analysis of the tubing and its performance during hydrocarbon production was not enough of a challenge, the team also had to take account of the fact that any of Thunder Horse’s wells could be switched from hydrocarbon production duty to water injection duty at some stage in the field’s life. This would radically change operating pressures and temperatures – typically from 135°C to 4°C. In addition to the capacity of the PDQ platform to handle 250,000bpd of oil, 5.6 million m 3 per day of gas and 140,000bpd of produced water, the platform will also be equipped to deliver 300,000bpd of treated seawater and produced water for injection into the reservoir to maintain pressure. At this rate and with a delivery pressure greater than 550 bar, the injection pumps and associated facilities are the largest in the world. When the injection water mixes with the water in the reservoir formation, bacterial action will create hydrogen sulphide – hence the chrome alloy steel – but in addition, barium sulphate can be formed, potentially resulting in severe scaling of well tubing and other equipment. Pre-emptive chemical ‘squeezes’ can be pumped into the well to prevent scale build-up, for which the project has developed long-acting chemical treatments that will function at high temperatures, containing ‘diverting’ agents to ensure the chemicals reach all the targeted parts of the reservoir and not only the high permeability zones. Sand, too, will be produced from the reservoir. Although sand will only be present in small amounts, when travelling at high velocities in the tubing this could cause erosion, particularly where internal diameter changes occur, for example at valve shoulders. Working with the University of Tulsa – acknowledged experts in modelling sand erosion – the project is confident that the completions design will not be adversely affected by sand. Looking ahead, the well completions have been designed for modification if additional equipment is required at a later stage, including downhole optical fibre sensors for measuring parameters such as temperature and pressure, or ‘smart wells’ incorporating surface-operated valves to isolate individual zones of the reservoir to minimise water production and maximise hydrocarbon recovery. The three producing zones of the Thunder Horse reservoir formation fortunately contain rock strong enough to be perforated and produced without additional sand control measures ( Frontiers , August 2003), although a few of the future wells in the northern section of the field may need sand control. Should well intervention be necessary, the project has taken the industry’s standard method of using coiled tubing for well intervention to new levels, developing a 50mm diameter coiled tubing system with a yield strength of over 800,000 kilopascals that can operate in wells at distances up to around 10,000m from the surface. Spreading success In January this year, the first of Thunder Horse’s wells was completed successfully, since which time two more have followed. ‘The first well took 51 days to complete from the Discover Enterprise, including the time to prepare the well,’ says O’Connell. ‘We learned a lot and made good use of the twin derricks onboard the drillship to carry out some operations “off-line” in parallel with live operations in the other derrick. For example, we can make up long sections of completion tubing in one derrick while running tubing sections into the well with the other, or have the subsea tree already lowered from the drillship and at the seabed, ready to attach it to the subsea wellhead – operations such as this can save days. By the time we did the third completion, we had the overall time down to 25 days, and reduced the downtime by 75%.’ While Thunder Horse’s completions team can rightly be proud of their achievements, their success is also bringing benefits to BP offshore projects around the world, including others in the Gulf of Mexico, such as the deepwater Atlantis field, and in Angola, Azerbaijan and Trinidad. Such has been the effectiveness of the exhaustive quality assurance and control processes on Thunder Horse, that the project’s approach to developing new completions has become the standard practice for all BP’s completions operations. Keeping a close eye on even the smallest widgets in Thunder Horse’s pioneering completions programme seems to have paid off handsomely for BP’s most ambitious deepwater development. Frontiers copyright and legal notice in all published material including photographs, drawings and images in this magazine remains vested in BP plc and third party contributors to this magazine as appropriate. Accordingly neither the whole nor any part of this magazine can be reproduced in any form without express prior permission, either of the entity within BP plc in which copyright resides or the third party contributor as appropriate. Articles, opinions and letters from solicited or unsolicited third party sources appearing in this magazine do not necessarily represent the views of BP plc. Further, while BP plc has taken all reasonable steps to ensure that everything published is accurate it does not accept any responsibility for any errors or resulting loss or damage whatsoever or howsoever caused and readers have the responsibility to thoroughly check these aspects for themselves. Any enquiries about reproduction of content from this magazine should be directed to the Managing Editor (email: knott@bp.com ). In this section Welcome from the Editor Thunderous innovation Iberian energiser Refinery rejuvenation X times stronger Oiling the works Sharing safety Viewpoint: Between hype and cynicism Insight: Chalk, oil and red wine Article tools Print this page Add to download folder Download Thunderous innovation (pdf, 479KB) Download Manager 0 items, 0.0 KB View back to top 1996-2005 BP p.l.c. | Legal Notice | Privacy Statement BP Global/Reports and publications/Iberian energiser Site Index | Contact us | Reports and publications | BP worldwide | Home Search: About BP Environment and society Products and services Investors Press Careers BP Global Reports and publications Frontiers Issue 10 Issue 13 Issue 12 Issue 11 Issue 10 Issue 09 Archives Iberian energiser Delivering natural gas to Spain through Europe’s first integrated LNG and power project in Bilbao is a key step in BP’s strategy for unlocking the energy supply chains in the Atlantic and Mediterranean Basins. With the first expansion of the facility recently completed, Terry Knott reports on the plant and its role in BP’s wider energy supply plans. The interior of one of the two LNG storage tanks at BP’s Bilbao plant during construction While Spain may conjure up images of sunny skies, good wine and glamorous flamenco dancers in the minds of many, to a global energy producer such as BP, the attractions are of an entirely different nature. Since the country’s energy supply and consumer market was opened up to external players in 2000, Spain has become the most liberalised energy market in continental Europe, offering opportunities to new entrants with innovative supply solutions. And within this rapidly growing market, natural gas is claiming an increasing share of the energy mix. ‘Over the past ten years the Spanish gas market has seen unprecedented growth of 12% a year, to reach the current consumption level of 24 billion cubic metres per annum (bcma) of gas,’ explains Tom Quigley, leader of BP’s Mediterranean gas and power business unit based in Madrid. ‘But the gas share of the primary energy mix is only about 13%, low compared to the rest of Europe at around 20-25%. Further rapid growth is expected to redress this, with gas sales forecast to reach 40bcma by 2010. BP is already established as the leading new player in Spain’s gas market, and we intend to strengthen this position as gas captures more of the energy business here.’ He describes Spain, along with its neighbour Portugal on the Iberian peninsula, as an ‘energy island’, having almost no indigenous oil or gas production, resulting in imports accounting for 98% of energy demand. Of the 24bcma of gas currently coming into Spain, about half arrives via long distance pipeline, some 80% of which originates in Algeria, with the remainder being transported from Norway through a pipeline crossing France. The other half of imported gas arrives in the form of liquefied natural gas (LNG) from a wide variety of sources, ranging from Trinidad to North and West Africa and the Middle East, while some spot market LNG cargoes come from as far afield as Australia – clearly demonstrating that along with liberalised markets also comes intense competition. ‘BP was an early mover in the Spanish gas market, and the first foreign major to be awarded a gas commercialiser licence,’ Quigley points out. ‘We now have 11% of the industrial gas market here supplied under the BP brand, in addition to which we have stakes in other gas coming into Spain, for example from the In Salah gas project in Algeria ( Frontiers , April 2004 - click link below to view PDF of article)and from Trinidad. Overall we are the second largest player after the incumbent Gas Natural company. Our goal is to increase our gas supplies into Spain by a factor of three over the next five years.’ Frontiers 09: Desert delivery (pdf, 526KB) At the heart of BP’s plan for this increasing share is the supply of gas in the form of LNG. This offers more flexibility than large gas pipeline supplies by being scaleable to match market growth, coupled with the ability to manage energy demand swing and the potential to divert LNG to alternative markets. Acting as the spearhead in BP’s Spanish gas growth strategy is the new LNG storage and regassification facility located near Bilbao on the northern coast of Spain. The first phase of the plant came into operation in August 2003 with capacity to import the equivalent of 3.5bcma of gas, with the facility’s second phase – an expansion to double its capacity to 7bcma – being completed in May 2004. Alongside the LNG plant and constructed in tandem is a new 800-megawatt (MW) electricity generating station, fuelled by the imported gas. Together they mark Europe’s first purpose-built integrated LNG ‘regas’ and power project, a development led by BP. The new LNG storage, regas and power site at the port of Bilbao Interchangeable gas While the Bilbao facility is a notable achievement in its own right – as described later – the development also carries a wider significance in the context of BP’s LNG strategy for the Atlantic and Mediterranean Basins. ‘When the Bilbao regas and power facility was first conceived in the 1990s, the idea was that it would be supplied with LNG from Trinidad, where BP is the leading participant in the Atlantic LNG partnership,’ says Quigley. ‘But with BP’s subsequent commitment to grow its global gas business, what was originally viewed as a point-to-point value chain between Trinidad and Bilbao has been subsumed into a much bigger gas marketing strategy. Now we see them as two important nodes in a larger portfolio of gas supply sources and a portfolio of gas markets, spanning the Atlantic and Mediterranean regions. With hindsight, the contract to supply the Bilbao regas and power facility was the first step in unlocking the Atlantic Basin.’ Anchoring this ‘bigger picture’ are the world class gas resources offshore Trinidad and Tobago in the Caribbean, operated by BP, where estimated reverses of gas are measured in hundreds of billions of cubic metres. The bulk of the gas being produced is used as feedstock for three LNG production trains currently on stream in Trinidad, operated by the Atlantic LNG consortium in which BP holds the major stake alongside partners BG of the UK, Spain’s leading international oil and gas company Repsol YPF, Tractebel of Belgium and the National Gas Company of Trinidad and Tobago. Together the three trains are capable of producing 9 million tonnes per annum (mta) of LNG – equivalent to 12.8bcma of natural gas -- 75% of which is supplied by BP as gas feed to the liquefaction trains. A fourth train is planned, which will take overall output to over 14mta by late 2005. Contractually, Repsol YPF is committed to supply 2.15bcma of gas to Bilbao as LNG – 1.1bcma to fuel the power station and 1.05bcma to the local gas company Gas D’Eskade. But contrary to the logic most observers would apply to this apparent point-to-point relationship, the LNG can originate from sources other than Trinidad. ‘In reality,’ remarks Pedro Garcia Marquez, vice president for Southern Europe in BP’s global power business, ‘some LNG cargoes have been sourced from other supplies – for example, from Das Island in Abu Dhabi. Having this flexibility in supply provides us with an important advantage in that we can match our LNG supply portfolio to customer demand in order to extract the best value from our products.’ The ‘best value’ he refers to currently lies in the energy markets of the USA, where demand for gas in the form of LNG is rising rapidly. And with Trinidad geographically located near to the USA, sending some LNG to this growing market where gas commands a stronger price, makes good business sense. ‘Traditionally, LNG deals have primarily been long-term contracts based on dedicated gas supplies and fixed LNG supply points,’ adds Garcia Marquez. ‘But we were able to take advantage of a new approach known as diversion and backfilling. In essence, we divert the LNG from its source to the best market, and backfill – or supply – the contractual LNG by buying it from other locations.’ Integrated portfolio BP’s expertise in optimising across different price bases and between different markets is controlled by BP’s global LNG unit in London, and gives the company a distinctive edge over its competitors, says Quigley – ‘where any piece of gas can go to any market.’ Given that a typical 135,000m 3 LNG vessel cargo can command a market price of $10-$12 million, such astute trading operations can bring very worthwhile financial rewards. Strategically, the company is building up its Atlantic-Mediterranean LNG supply sources portfolio – which includes Trinidad, Algeria and Egypt, and other potential additions from Africa and the Middle East – while expanding its market portfolio, including the USA, UK and southern Europe, notably Spain, France and Italy. To integrate the portfolio position still further, BP is also developing a strong LNG shipping capability, having already taken delivery of three new LNG carriers – the British Trader , British Merchant and British Innovator – from South Korean shipbuilder, Samsung. These were the first LNG carriers to be delivered to an operator without being tied to a specific LNG source or customer, giving BP the flexibility to respond to customer needs and commercial opportunities. The British Innovator delivers Bilbao’s first cargo of LNG in August 2003 But other cargoes of LNG from Trinidad – for example those purchased by Repsol YPF and Gas Natural – do make their way physically to Spain, totalling 6.3bcma. Part of this enters via Bilbao, the remainder – along with LNG from other sources – is imported through Spain’s three other LNG terminals at Barcelona, Cartagena and Huelva (click link above right to see map). ‘BP is the only company in Spain to import LNG into all four terminals, currently sourced from Trinidad, Algeria, Abu Dhabi, Qatar and Oman,’ Quigley points out. ‘This reflects the importance of Spain as an energy market to BP. The Mediterranean business unit is responsible for gas markets that now reach as far away as Turkey and the Caspian, and offers gas sales opportunities for several of BP’s growing profit centres. But Spain remains at the focal point of this, and Bilbao is a key entry point.’ Uniting gas and power BP’s confidence in the Spanish market was clearly demonstrated when the decision to build the Bilbao plant was taken early in 2000, against the prevailing backdrop of a regulatory framework still in formulation at that time due to the imminent liberalisation of the country’s gas and electricity markets. While three LNG regas terminals already existed, these were all owned by Enagas, a subsidiary of Gas Natural, the Spanish gas utility. Bilbao is the first privately developed LNG terminal, and the combined $780 million regas and power plant development represents the largest private investment in Spain’s energy sector over the last decade. ‘Bringing the LNG regas facility together with the power plant was a win-win situation,’ notes Garcia Marquez, who was instrumental in contract negotiations. ‘Spain wanted more energy, the Basque region around Bilbao needed more electricity, and BP wanted to monetise its gas from Trinidad. By committing to both the regas plant and the power plant developments, BP was able to cement this value chain and lock in the gas supply with a guaranteed customer. The net result is the first integrated LNG regas and power plant in Europe.’ Located in the municipality of Zierbena at the western end of the 15km-long port of Bilbao on the Bay of Biscay, the plant sits on a 230,000m 2 site between existing installations for the import and storage of petroleum products. Two companies were created for the development – Bahia de Bizkaia Gas (BBG) for the regas plant, and Bahia de Bizkaia Electric (BBE) for the 800MW power plant. Each of the companies has the same four partners, each holding a 25% share, namely BP, the Basque Energy Board EVE, Iberdrola – one of Spain’s largest electricity generators – and Repsol YPF. ‘By building the two facilities in parallel, we gained a number of synergies in terms of construction logistics and shared resources,’ says BP’s Bruce Cartwright, who led the developments as project director. ‘The contracts for the work were awarded in July 2000. By August 2003 the power plant was complete, with the first phase of the gas plant being handed over four months later, all commissioned and tested. ‘The plant was designed for expansion from the outset. Building the second phase as a direct follow-on to the first gained further savings.