1

NewTechnologiesforSafeandCostEffectiveOilConditioninginNorthDakotaRevisionAddendum–4/29/2016

PrincipalInvestigator:DarrenSchmidt,StatoilPleasefindenclosedthisaddendumtoouroriginalapplicationsubmittedMarch1,2016.Upontechnicalreview,anumberofclarificationswererecommendedtofurtherdefinetheproposedscopeofwork,timeline,andbudget.Thefollowingistherequestedinformation.SummaryOurresearchteamandassetteamisfullyengagedtofindfieldsolutionsforimprovingtheabilitytoproducecrudeoilmeetingnewRVPrequirements.Thebiggestchallengesincludeoperationofexistingheater-treaters,andwhattodowhentherearelargeamountsofoff-speccrudeoilinthesystem.Technologiesthatcanbeimplementedatthewellheadaremostlikelytocombattheproblemsassociatedwithproduction,andhavethehighestlikelihoodforbeingeconomic.Wehaveselectedsonictechnologybasedonsupplierconversations,andbelieveitisworththepartnershipwiththeNDOGRPbecauseofthepotentialupsideifsuccessful.TheprojectteamconsidersthepotentialforchemicaltreatmenttobeareasonablesolutionfortreatingvolumesofhighRVPcrudethatmaybepresentwithinoursystem.Asabasis,presentoperationsdochemicallytreatcrudeinthepipelinesystem.Theneedhoweverisforaflexibleandeconomicchemicalservicetoworkacrosstheindustryinwhichweintendtoguidethedevelopment.Theproposedworkisspecificallyfocusedonthetaskswithinthatappeartohavethehighestreward;howeverourteamisremainingopentootherpotentialsolutionsaswemoveforward.ManyoftheapproacheswehaveencounteredtocomplywithrecentRVPrequirementsinvolvecentralizedstabilization,orsignificantequipmentaddedtothewellhead.Althoughrobust,sucheffortsaddsignificantcostandcomplexity.Theintentforthisworkistodevelopsimplesolutionsthatimproveperformancespecificallygearedtowardsreliability,andaddressingissuessurroundingfieldoperationsthatcanbeimplementedacrossthebasin.Forinstance,ifatechnologycanbolt-ontoanexistingtreater,bothoperationalreliabilityandacostadvantagecanbeachievedsimultaneously.ScopeofWorkTask1–Theprojectteamwillmodeltheevolutionoflightendsfromthewellheadtotankstorage.ThepurposeistogainagreaterunderstandingoftheexpectedvaporpressuresthroughouttheoilconditioningprocessatthewellheadandidentifythemechanismbehindtheRVPchallenge.Basedonresults,wemaybeabletoidentifysomeuniqueopportunitiesfortechnologytoremoveadditionallightendsbasedontheexpectedconcentrationsoflightends.Additionally,therearecurrentlyissuesinvolvingambienttemperaturesandstorage.Theteamwouldliketobetterunderstandthenatureoflightendsthatmaycondenseandcauseanincreaseinvaporpressure.Understandingthequantificationsurroundingthesemechanismsmayelucidatesimplesolutions.Mostofourwell-padlocationsuseatwo-phaseseparator,andheatertreaterarrangement.Thetwo-phaseseparatorisoperatedatpipelinepressuretopushgastosales(~100psi).FewofourlocationsincludeVRUs.Theprojectteamwillmodeltheconditionsattheoperatingpressuresandtemperaturesofthewellheadseparationequipment.Thelaboratoryequipmentintask2istobeoperatednearambientpressure;howeverwearealsooperatingourtreatersatrelativelylowpressures.TheNDIClimitstheoperatingpressureoftreaterstonogreaterthan50psi.

2

Task2–Anexperimentalapparatusisproposedtobetterunderstandtheapplicationofsonictechnologyinseparatinggasfromcrudeoil.Equipmentisreadilyavailableoff-the-shelfforflowthroughexperiments,andanumberofqualifiedlabshavethecapabilitytosampleandconductgasanalysisandlightendsanalysis.Wewillhirethemostqualifiedlaboratory.Weexpecttodevelopatestmatrixthatwillprovideoperationaldataatvarioustemperatures,acousticsettingsandresidencetimes.Theprojectteamwillsubcontracttoalaboratorytofullyinstrument,conductsampling,andanalyzeresults.Thisactivityisexpectedtocostontheorderof$100,000.Ourteamwillbeinstrumentalindesigningtheexperiments,andultimatelymeasuringtheRVPperformance.WeplantouseGrabnerinstrumentsfollowingASTMmethodD6377tomeasureRVP.Theexperimentalapparatuswillbeinstrumentedfortemperatureandpressureandtoprovideacompletemassbalance.Task3–WehaveidentifiedanumberofservicesthatcangelhydrocarbonswhichwillreduceRVP.Hydraulicfracturingisthemostcommonserviceinwhichgellingofcrudecanbeaccomplishedwithaphosphate-estergel.Howeverthistaskinvolvescustomizingthechemicalforthepurposeofreducingthevaporpressure,anddeterminingiftheservicecanbeeconomicallyappliedinthefield.Nosinglechemicalcompanyhasthecapabilityofsolvingtheproblemfromanoperationalviewpoint,andtheprojectteamisneededtoprovidetheguidancetoultimatelydevelopaservicethatourindustrycanuseeconomically.WeexpecttomeasuretheRVPofcrudesamplesbeforeandafterchemicaltreatmenttodetermineperformance,andminimizetheamountofchemical.Basedonservicingandchemicalcosts;wewillalsodesignanddetermineameanstotreatvolumesofhighRVPcrudeinthefieldfromindividualtanks,toin-linetreatment.Ultimatelywewilldeterminethedownstreamsaleableimpactsandchemicallimitations.NotesaboutsubcontractedworkWedidnotsolicitsubcontractspriortothisproposal.Theauthorsarefamiliarwiththeexpectedmagnitudeofthelaboratoryworkandtypicalcosts.Ourteamwillselectthebestcandidatetoperformthework.Mostlabsdonothaveflow-throughsonicationequipmentonhand.Weareexpectingtopurchasetheequipmentthroughthesubcontract,andexpectthelaboratorytoinstrumentandoperate.Theequipmentisoff-the-shelf.Wearebreakingnewgroundbylookingatasonictechnology.Thereislittleunderstandingforhowthistechnologywillperformrelativetoseparationofgasfromcrudeoil,andourprobleminNorthDakotaisuniquetotherecentorder.Thereareareasonablenumberofresourcesprovidingfundamentalsinsonochemistry,wearecurrentlyinvolvedinliteraturereviewinthisareatoenhanceourunderstanding.Budget

ProjectAssociatedExpense NDIC’sShare Applicant’sShare(Cash)Task1-Modeling $32,258.07 $12,903.23Task2-SonicTesting&Development $64,516.13 $38,709.68Task2-LabSubcontract $100,000.00Task3-ChemicalRVPTreatment $32,258.07 $12,903.23IndirectCosts $70,967.74 $35,483.87TotalProjectCosts $200,000.00 $200,000.00

3

Statoil’sshareoftheprojectincludescoststocompletethelistedtasks.Asubcontractisexpectedtobecompletedfortask2whichincludeslaboratoryequipment.Thecostsofequipmentisexpectedtobelessthan$10,000.

Timetable

Thethreeprojecttasksareexpectedtooccursimultaneously,andaremutuallyexclusivewithregardstoastage-gateprocess.Task1isintendedtoimproveourunderstandingofRVPinwellheadprocessesandstorage.Althoughthisinformationmaybeusefultotask2andtask3,itdoesnotsignificantlyinfluencetheearlylabworkplannedforthesetasks.Moreimportantly,task1mayhelpidentifyotherapproachestoRVPreduction.Task2involvesinitiallaboratorytestingofultrasonicstoenhanceourunderstandingoftheefficacyforRVPreductionofcrudeoil.Thestagesinvolvedinthecompletionoftask2includeestablishingthesubcontractedworkataqualifiedlaboratory,purchasingequipment,andcompletingthelabtesting.Thetechnologygateisthelaboratoryresultswhichwillinfluencethedecisionregardingfuturefieldtests.Task3involveslaboratorytestingofchemicalstoreducetheRVPofcrudeoil.Thelaboratoryworksisrequiredtoconfirmchemicalvolumesandpotentialcosts.Investigationofdownstreameffectswillalsobeconsidered.Thestagesforthistaskincludetechnicalfeasibilityfollowedbyeconomicevaluation.Technicalfeasibilityisthefirsttechnologygate,followedbyeconomicfeasibility.Athirdgateisfieldtestingandverification.

2016 2017June August November January March May

Task1-ModelingDeliverable ReportprovdingmassbalanceoflightendsaroundwellheadequipmentTask2-SonicSeparation&Dev. &ambienttemperatureinfluences.EstablishsubcontractCompletelabexperimentsReport&planforwardw/fieldtestNote:ifunsuccessful;decisiongateistoexploreothertechnologiessuchasVRUbasedoptions,andothermechanicalsolutions.

DecisiongateforTask2Task3-ChemicalRVPTreatmentlaboratoryworkFieldtestReportingDecisiongate:Attheconclusionofthelaboratorywork,costswillbeassessedtodetermineifaneconomicapplicationispossible.

DecisiongateforTask3Finalprojectreport

4

5

6

OilandGasResearchProgram

NorthDakota

IndustrialCommission

Application

Project Ti t le :

New Technologies for Safe and Cost

Ef fect ive Oil Condit ioning in North

Dakota.

Applicant: Statoi l

Pr inc ipal Investigator: Darren Schmidt

Date of Applicat ion: March 1, 2016

Amount of Request: $200,000

Total Amount of Proposed Project:

$400,000

Duration of Pro ject: 1 year

Point of Contact (POC): Darren Schmidt

POC Telephone: (701) 739-5680

POC E-Mail Address: dschm@statoil.com

POC Address: 14649 Brigham Dr.

Williston, ND 58201

7

TABLEOFCONTENTS

TransmittalandCommitmentLetter

AffidavitofTaxLiability&StatementofstatusonOtherProjectFunding

Abstract 5ProjectDescription 6StandardsofSuccess 12Background/Qualifications 13Management 14Timetable 15Budget 15ConfidentialInformation 15Patents/RightstoTechnicalData 15

8

ABSTRACT

Objective:OnApril1st2015order25417bytheNorthDakotaIndustrialCommission(NDIC)wentintoeffectthatrequiresallproducerstoinstallandutilizeoilconditioningequipmenttosignificantlyreducethevaporpressureofBakkencrudeoil.Althoughahighpercentageofcompliancehasbeenachievedbytheindustry,theseeffortshavebroughtonadditionalcosts,andoperationduringcoldandinclementconditionscontinuetobeachallenge.Compliancewiththeorderforthefirsttimethiswinterhasprovidedthefieldexperiencetopinpointanumberofoperationalissues.Thisproposalistoexplorecosteffectiverobusttechnologysolutionsthatcanbeimplementedasearlyasnextwintertoimprovesafeoperations,manageoperationalcosts,andcontinuecompliancewiththecrudeoilconditioningorder.

Proposedisaphase1feasibilitystudytobefollowedbyfieldtestingandimplementation.Specificallythescopeofworkincludes:

1)ModelingofsurfacetreatmentsystemsandstoragetoclearlyidentifyuniqueoperationalcircumstancesthatcontributeandcontrolReidVaporPressure(RVP)duringprocessingandhandling.

2)Sonicseparationatthewellheadthatdoesnotrelyontemperatureforoilconditioning.Thetechnologycanbeanalternativeoranenhancementtoexistingheatertreateroperations(1).

3)BatchchemicaltreatmenttoreduceRVPandmeetmidstreamstandards.Thisapproachisintendedtoprovideasolutiontovolumesofoilthatwouldotherwiserequireamoreexpensivetransportationandprocessingoption.

ExpectedResults:Theexpectedresultoftheprojectisimprovedreliabilityandsafetyassociatedwithoilconditioningoperations,andspecificallyfocusedonthemarketability,costcompetiveness,andultimaterevenuesachievedfromtheproductionofBakkencrudeoilinNorthDakota.Theprojectincludesafirstphasefeasibility.Theresultsfromthescopeofworkinclude:

1) Technicalandscientificresultsofamodelingstudywhichhelptoidentifyopportunitiesfortechnologyimplementation.

2) Apathforwardforfieldandcommercialdemonstrationofsonicseparation.3) Laboratoryandfieldresultsforchemicaltreatmentoptions.

Duration:

1year

TotalProjectCost:

Phase1-$400,000;Phase2-budget&scopeofworknotproposedatthistime.

Participants:

Statoil;Phase2Participantstobeannouncedatendofphase1

9

PROJECTDESCRIPTION

Objectives:

ThegoalofthisprojectistoprovidetechnicalsolutionsthataddresschallengesrelativetomeetingRVPrequirementsforBakkencrudeoil.Specificobjectivesareasfollows:

• Provideatechnicalandscientificunderstandingofvaporpressurebehaviorinoilconditioningoperationsthroughmodelingtreatingandstorageequipment.

• Improvethereliabilityanddecreasethecostofcrudeoilconditioningatthewellheadbyinvestigatingthefeasibilityforsonicseparation.

• DecreasethecostsassociatedforconditioninghighRVPcrudeoilbyinvestigatingchemicaltreatmentoptions.

Thiswinterhasbeenthefirstcoldweatherexperienceforoperatorssincetheapprovalofordernumber25417whichspecifiesconditioningstandardstoimprovethemarketabilityandsafetransportationofthecrudeoilinNorthDakota.Order25417,inbrief,specificallyrequiresthefollowing:

1) Allwellsmustproducethroughagas-liquidseparatorand/oremulsionheater-treater.2) Agas-liquidseparatorand/oremulsionheater-treatermustoperateatnomorethan50psion

thelaststageofseparationandatatemperatureofnolessthan110°F.3) Ifoperatingtheaboveatgreaterthan50psi,avaporrecoverysystemisrequiredupstreamof

theoilstoragetanks.4) Ifequipmentotherthanspecifiedaboveisused,aRVPof13.7psimustbedemonstrated.

Generally,compliancewithorder25417hasbeenmaintainedbytheindustryhoweveranumberofchallengeshavebeenencounteredrelativetotheorder.

1) Heatertreaterscanblowoutduringwindyconditionsrequiringincreasedattentiontomaintainoperatingtemperature.

2) Insomecases,oilconditioningequipmentisoperatedattemperaturesofover150°FtomeetpipelinerequirementsforRVP,resultinginlostliquidvolume.

3) VariousmidstreamoperatorshavedefaultedtoanRVPof13.7psi,eventhoughtheintentoforder25417isrelevanttorailtransport,andnotnecessarilypipeline.AsspecifiedintheDepartmentofMineralResourcesfrequentlyaskedquestionsdocument(2);anRVPof14.7psiorlessisrecognizedbynationalstandardsasstable,andthatthecommissionisallowingfora1psimeasurementerrorbychoosingthe13.7psistandard.

4) Ithasbeendemonstratedinthefield(3)thatRVPcanincreaseintankswhereoilisallowedtocool.SmallvolumesoflightendsintankheadspacecanincreasetheRVPoftheoilwhenallowedtocondenseinstorageduringcoldwinterweather.

Thechallengeslistedabovearedriversfortheproposedwork.Thereisanopportunitytoimprovefieldoperationsforoilconditioningatthewellhead,andfindcosteffectivesolutionstolowerthevaporpressureforvolumesofoilinstoragethatmaytestabove13.7psi.

10

Methodology:

Task1–Modeling

Vaporpressureissensitivetosmallchangesingascompositionofvolatilelighthydrocarbons(C1-C4)andinertinorganicgases(4).Figure1providesthebubblepoint(BP)pressureortruevaporpressure(TVP)forcrudeoilsampledfromtheU.S.StrategicPetroleumReserve.Asthelightendcompositionchanges,whichoccursduringoilconditioningandstoragetheresultingvaporpressureisaffected.

Figure1–VaporPressure(bubblepointpressureBP)asafunctionofgascomponentsincrudeoil(4).

Inordertoquantifyopportunitiestomanagevaporpressureitisimportanttomodelsurfaceoperationsspecifictocrudeoilcomposition.AspenHYSYSisaprocessmodelingsoftwarethatcanquicklyconductcomplexcalculationsinvolvedinsurfaceoilconditioning,transport,andstorage.ThistooliscommonlyusedbypetroleumengineerstomodelreservoiroilpropertiesforfluidcharacterizationandPVTanalysis.Theprojectteamwillusethistooltomodeloilconditioningoperations,storagescenarios,andothertechniquessuchasvaporrecoverytobetterunderstandtheopportunitiestocontrolRVPwithexistingequipmentandtechniques.SpecificallytheregainofRVPinstoragetanksduringcoldweather,isofparticularinterestandmaypointtomitigationoptions.

11

Task2–SonicSeparationTestingandDevelopment

Theprojectteamhasbeenindiscussionwithcompaniesthathavebeeninthebusinessofwellheadoilconditioningequipmentforover50years,andhavefieldtestedorexperimentedwithsonicseparationofreservoirfluids.Althoughsomefieldtestinghasbeencompleted,itisimportanttoquantifyseparationperformancewiththirdpartylaboratorywork.Sonic,acoustic,orultrasonicgasseparationisotherwiseknownbythephenomenaofacousticcavitation.Acousticcavitationoccursfromthepropagationofultrasonicwavesintoaliquidwhichformandgrowgasbubblesintheliquid.Theacousticsoundwavedecreasesthelocalpressuresufficientlybelowthevaporpressureinwhichthecohesiveforcesareovercomeandgasbubblesareformed(5).Thetechniqueiscommonlyusedtodegasliquids(figure2)howeverhasnotbeencommonlyappliedtooilconditioningatanysignificantcommercialscale.Theprojectteamintendstocontractwithaqualifiedlaboratory,purchaseasimplebench-topapparatus,andexaminetheperformancetoverifyfielddatafrompotentialprojectpartners.

Figure2–UltraSonicVideoCaptureCreatedbyHielscherUltrasoundTechnology(6).

Thelaboratorysystemwillincludesonicationofafluidtoformbubblesfollowedbymechanicalseparation.Bakkencrudeoilwillbecollectedfromthewellheadandcharacterizedforlightends.Sampling(liquid&gas)andmeasurementwilloccurtoprovideamassbalance,andexperimentswillbeconductedtounderstandseparationperformancerelativetolightendcomponentseparationefficiency,

12

andseparationperformancerelativetotemperature.Duringthistasktheprojectteamwillcontinuediscussionswithcommercialsuppliersinpreparationforaphase2fieldtest.

Figure3–ExampleBenchScaleUltrasonicLiquidProcessorfromIndustrialSonomechanics(7).

Task3–ChemicalRVPTreatment

TheprojectteamhasbeenindiscussionwithmajoroilfieldchemicalsuppliersregardingtreatmentofcrudeoiltolowerormaintainRVP.Duringthistasktheprojectteamintendstofurtherthesediscussionsandreportontheprogressoflaboratorytesting,andfieldtesting.InordertomeetRVPrequirementsforgasoline,refinersgenerallyremovethebutanecomponentsthatcontributetohigherRVP.Similarly,tolowercrudeoilRVP,heatedconditioningisusedtoremovebutaneandlightercomponents.Generallytheconditioningoccursatthewellhead,howeverhigherRVPcrudeoilmayarriveatfacilitiesdownstream.WhenthisoccursblendingwithlowRVPcrudeoil,oradditionalconditioningisneeded.Onceconditioned,thecrudeoilvolumeisdecreasedresultinginadditionalcosts,andreallocationofproductionvolumes.Chemicaltreatmentisameanstomaintainthecrudeoilvolumewhileloweringthevaporpressure.AnumberofchemicalscanbesuitabletocontrolRVP.Gellingofhydrocarbonfuelshasbeenproposed(8),andpreviouslyappliedtoaviationfuels.Gelsmaycontainaminoacidsorpolymergellingagents.Previousproductshavebeendesignedtobeflowableandpassthroughfiltersandinjectors.Whatremainstobedeterminedisifchemicalcanbeaddedeconomicallyandmeetpipelineandrefiningrequirements.Thistaskwillidentifyapotentialsuiteofchemicalsandevaluatetheeconomicsanddownstreamrequirements.

13

AnticipatedResults:

Task1–Reporthighlightingmodelingresultsforsurfaceoilconditioning,regainedRVPfromstorage,andopportunitiestocontrolRVPrelativetolightendcomponentcomposition.

Task2–LaboratoryreportofresultsfromsonicseparationofBakkenwellheadfluids,andidentificationofacommercialpartnertofielddemonstratenewtechnology.Theintentistodevelopatechnologythatisnotinfluencedbycoldweatherorwindyconditions.

Task3–IdentifychemicaloptionsthatmeetdownstreamrequirementsandcanbeeconomicallyappliedtovolumesofoilthatrequireloweringRVP.

Facilities:

Task1-modelingwillbecompletedwithinStatoilfacilities.

Task2-laboratorytestingwillbesubcontracted.Theprojectteamintendstosubcontracttoaqualifiedcommercialorwell-renownedUniversitywithexperiencecontractingintheoilandgasindustryonshort-termdeliveryprojects.Selectionwillbesubjecttonegotiation.

Task3-laboratorytestingwillbeaccomplishedbyaselectedchemicalservicecompanywithintheirfacilities.AnyfieldtestswouldoccuratStatoilfacilitiesinNorthDakota.

Resources:

Statoilcurrentlyoperatesashaleoilandgas(SOG)researchteamfocusedonthedevelopmentofonshoreassetsintheUnitedStates.TheSOGteamisadiversifiedgroupofabout20peoplecoveringawiderangeofexperienceincludingdrilling,completions,production,facilities,reservoir,geology,engineering,andchemistry.OurteamiscurrentlyengagedinfieldapplicationprojectsintheBakkenassettoensuresafeoperations,improverecovery,limitcosts,andincreaseefficiencies.Theteamisexperiencedintechnologydevelopment,co-sponsoredprojects,andagreementswithmajorservicecompaniesanduniversities.Theproposedworkiscongruentwithourcurrentresearchportfolioandresearchobjectives.

TechniquestoBeUsed,TheirAvailabilityandCapability:

Statoilcurrentlyhasthesoftwareandcapabilitytoconductthemodelingeffortproposedintask1.

Laboratoryequipmentiscurrentlycommerciallyavailabletoconducttheworkproposedintask2.Theprojectteamwillsubcontractwithawell-qualifiedlaboratorythathasanestablishedtrackrecordforcompletingsimilarprojects.

Theworkproposedintask3isexpectedtobecommerciallycompetitiveandcompletedbyamajorchemicalservicecompany.

14

EnvironmentalandEconomicImpactswhileProjectisUnderway:

AnyfieldtestingthatmayoccurduringtheprojectwillbesubjecttostandardoperatingproceduresandapprovalsbytheBakkenasset.TheassetoperatesincompliancewiththeNorthDakotaIndustrialCommission.Noenvironmentalimpactisexpectedfromthisfeasibilitystudy.Environmentalimpactswillbeassessedpriorandduringaphase2demonstration.

Iftask3provessuccessful,positiveeconomicimpactmayberealizedeitherduringorasadirectresult.

UltimateTechnologicalandEconomicImpacts:

ThisprojectproposalwasformulatedasadirectresultofchallengesencounteredthiswintertomaintaincompliancewithNDICorder25417.Thechallengesencompassmaintainingheatertreaters,ensuringproductionoflowRVPcrudeoil,andpreventingrejectionofcrudeoilrelativetomidstreamshippingrequirements.Allofwhicharesubjecttoattendantcosts.

Asuccessfulprojectwillloweroreliminatetheassociatedcosts,anddevelopnewtechnologyformanufactureandpositiveeconomicimpactswithintheindustry.

Althoughitisnotasimplemattertopinpointtheadditionalcostsassociatedwiththeindustry’soperationtocomplywithorder25417afewbenchmarksareworthyofnote:

- Deliveryof“outofspec”crudeoiltostorageterminalscanadd$2.00-$5.00perbarrelduetoaddedconditioningorunplannedtransportation.

- $0.20-$1.00perbblcanbelostbyvolumereductionofoilbasedonvaporizationoflightends(9).

- InadocumentprovidedbytheNorthDakotaDepartmentofMineralResources(2),acostof$0.10perbblwasestimatedregardingconditioningofcrudeoil,andprovidessomebasisforcoststhatmayincurespeciallyifoperatorsmustreprocesscrudeoil,orconditionathighertemperatures.

- ManyoperatorshaveincurredtheexpenseoffieldtestinginordertopinpointwellswhichproducecrudeoilatanRVPthatpipelinecompaniesrefusetoship.Thesecostscanbeintherangeof$1500perday.

WhytheProjectisNeeded:

Theoilconditioningorder25417waswrittenasamatterofsafety.RailaccidentsacrossthecountrydrewattentiontohowBakkenoilisproducedandprocessedatthewellsite.Theorderrepresentsacongruenceofasignificantvolumeoftestimonyforhowtomakeprocessingandtransportassafeaspossible.Theorderisbasedonsciencefromthetestimonyreceived.NationalstandardsrecognizeoilwithaVaporPressureof14.7psiorlesstobestable,andthegoalinNorthDakotaistoproducecrudeoilthatdoesnotexceedameasuredvaporpressureof13.7psi,whichallowsforaonepsierrorinthesamplingproceduresandmeasurementequipment.

15

Thisprojectisneededtoeasecompliancewiththeoilconditioningorder,reducecosts,anddevelopnewtechnologythatcanbemoreeffective,efficient,andreliable.Theimpactsoftheorderhavebeenindustrywide;howeveraffectproducersinvariousways.Theimpactsaredependentonlocality,infrastructure,resources,andshippingroutes.Addressingthechallengesasclosetothewellheadaspossiblewillyieldthegreatesteconomicimpactforthecorrelativerightsofallowners.Secondarilythisprojecthelpstodevelopnewtechnologiesthatcandrivepositiveeconomicimpactsbeyondtheprocessingandhandlingofcrudeoil.

References:

1. Lord,D.;Luketa,A.;Wocken,C.;Schlasner,S.;Aulich,T.;Allen,R.;Rudeen,D.;“LiteratureSurveyofCrudeOilPropertiesRelevanttoHandlingandFireSafetyinTransport”SandiaReport,March2015.

2. FrequentlyAskedQuestionsonOilConditioning;4/2/2015www.dmr.nd.gov/oilgas/3. InternalreportforStatoilcompletedbyProcessSupportServicesIncorporated“Summary

ReportfortheSalesOilTVPStudyfortheRossFacility”October2015.4. Lord,D.;Rudeen,D.;“AnalysisofCrudeOilVaporPressuresattheU.S.Strategic

PetroleumReserve”SandiaReportSAND2005-4322,August2005.5. Legay,M;Gondrexon,N.;LePerson,S.;Boldo,P.;Bontemps,A.;“EnhancementofHeat

TransferbyUltrasound:ReviewandRecentAdvances”InternationalJournalofChemicalEngineering;2011.

6. https://www.youtube.com/watch?v=EeWS_mlVQXY;accessedFebruary2016.7. http://sonomechanics.com/products_services/1200_w_bench-scale_processor/;

accessedFebruary2016.8. USPatentApplication20080263941A1;July2,2008.9. Auers,J.R.;Couture,R.M.;Sutton,D.L.;“TheNorthDakotaPetroleumCouncilStudyon

BakkenCrudeProperties”;BakkenCrudeCharacterizationTaskForce;4/4/2014

STANDARDSOFSUCCESS

Deliverables:

• Thetask1deliverablewillincludeareporthighlightingtheresultsofmodeling.ThestandardofsuccessisanadequatelydescribedmassbalanceforprocessingandstorageofBakkencrudeinsurfaceoperations.TheexpectedoutcomeincludesvolumesandconditionsinwhichlightsendsarepresentandreduceRVP.Operatorsmayusethisinformationtoimplementvarioustechnologiesbasedontheresults.

• Asuccessfuloutcomefortask2wouldincludeacommercialpartnerthatcanfurthertheconceptofsonicseparation.TheteamhopestoidentifythroughlaboratorytestinghoweffectivethetechnologyisatremovingthehighvaporpressurecomponentsfromBakkencrudeindependentoftemperature.Ultimatelytheteamseekstoenablecrudeoilconditioning

16

withouttheinterferenceofadverseweatherconditionswhichcurrentlyhampertheabilitytoproducelowRVPcrudeoil.

• Successfortask3wouldbetheidentificationofvariouschemicalsthatcanreduceRVPofcrudeoil.Theintentisforacommercialchemicalsuppliertofieldtestandofferasolutiontooperators.Thechallengewillbetofindachemicalthatiseconomic,anddoesnotdetrimentallyinterferewiththevalueofdownstreamprocessingofcrudeoil.

TheproposedworktouchesonallmissiongoalsandpurposesoftheOilandGasResearchCouncil:

• Promoteefficient,economic,andenvironmentallysoundexploration,development,anduseofNorthDakota’soilandgasresources.

• Preserveandcreatejobsinvolvedintheexploration,productionandutilizationofNorthDakota’soilandgasresources.

• Ensureeconomicstability,growth,andopportunityintheoilandgasindustry.• Encourage,andpromotetheuseofnewtechnologiesandideasthatwillhaveapositive

economicandenvironmentalimpactonoilandgasexploration,development,andproductioninNorthDakota.

• PromotePublicAwarenessofthebenefitsandopportunitiesprovidedbytheNorthDakotaoilandgasindustry.

TheoutcomesareintendedtoassistoperatorsinNorthDakotawithcomplianceoforder25417tosignificantlyreducethevaporpressureofBakkencrudeoil.SuccessoftheprojectwillhelpoperatorstoachievethegoalinamorerobustandcosteffectivemannerthatwillmaintainthecompetivenessofoilproducedinNorthDakotaandpreservejobs.Additionally,technologydevelopmentisexpectedwhichcanbringnewinvestment,createjobs,ensuresafeoperations,andcreatenewopportunities.

BACKGROUND/QUALIFICIATIONS

TheproposedworkwillbeconductedbytheShaleOilandGas(SOG)researchgroupatStatoilwhichhasbeenworkingcloselywiththeBakkenassetoverthepast3yearsonanumberoffieldimplementationprojects.TheteammembersfromStatoilthatwillhavethemostsignificantinvolvementintheprojectincludeDarrenSchmidt,DesikanSundararajan,andAndreaCarolinaMachadoMiguens.Abriefbioisincludedforeachperson:

AndreaCarolinaMachadoMiguenscurrentworkwithStatoilasaseniorresearcherfocusesoninvestigatinganddevelopingnewtechnologiestofacilitatecleanoilandgasproductionfromshaleplays.

AndreaholdsamasterdegreeinChemicalEngineeringfromtheNorwegianUniversityofScienceandTechnology,NTNU(Trondheim,Norway)andabachelordegreefromtheSimónBolívarUniversity,USB(Caracas,Venezuela).AndreajoinedStatoilin2009intheResearchandDevelopmentCentreinTrondheim.For7yearsshehasbeenworkingwithresearch,developmentandimplementationoftechnologiesintheareaofgasprocessingandonshorefacilities.In2015sherelocatedtoHouston,USA.

17

Dr.SundararajanisaseniorresearcherwithStatoilfocusedoninvestigatinganddevelopingnewtechnologiestofacilitatecleanoilandgasproductionfromshaleplayswithspecificemphasisairemissionsandproppantdevelopment.MethaneandVOCemissionsarethefocalpointofhiscurrentworkatStatoil.HeisinvolvedindevelopingvariousstrategicpolicyandtechnologybasedalternativestoreduceStatoil’scarbonfootprint.

PriortojoiningStatoil,Dr.Sundararajanworkedondiverseprocess-relatedR&Dprojectswhichincludecatalystdevelopmentforjetfuelreforming,desulfuriersforfuelreformatepolishing,sulfurtolerantanodematerialsforsolidoxidefuelcells,non-preciousmetalsoxidationcatalystforCOandVOCcontrol.InthispreviousroleasaResearchTechnicalLeaderatOwensIllinois,Desikanwasresponsibleforleadingatechnicalteamworkingonselectiveglassbatchingusingcoreandshellgranuledesignanddevelopmentforimprovedmeltingkinetics.

Hehasauthorednumerouspeer-reviewedpublicationsandisaleadinginventorofmultiplepatentedandcommercializedemissionssensingandmitigationtechnologies.Dr.SundararajanobtainedhisPhDinChemicalEngineeringfromUniversityofToledoin2009,MSinEnvironmentalEngineeringfromTheUniversityofArizonain2004andaBEinChemicalEngineeringfromtheUniversityofPune.

DarrenSchmidtisaprincipalengineerfordrillingandwelloperationswithintheshaleoilandgasteamatStatoil.HeislocatedinWilliston,NDandservestofacilitateresearchprojectswithinouroperations.Overthepast3yearsMr.SchmidtwasresponsibleforcompletionoperationsinWilliamsCounty,NorthDakota.PriortojoiningStatoilheworkedasatechnicaladvisorforWeatherford’sfirstfracturingserviceoperationsintheBakken.Mr.Schmidtwasresponsibleforprocuringresearch,developingtechnology,andconductingscientificstudyfor15yearsattheEnergy&EnvironmentalResearchCenterlocatedattheUniversityofNorthDakotaonawiderangeofenergytechnologiesmostlyfocusedondistributedpowergeneration,andoilandgas.HisexperiencealsoincludestestingabiomassgasificationpowerplantforResearchTriangleInstituteinNorthCarolina.Mr.SchmidtisaregisteredprofessionalengineerinNorthDakotainboththedisciplinesofPetroleumandMechanicalengineering.HegraduatedfromWestVirginiaUniversity(BSME),holdsonepatent,andhaspublishedover100publications.

MANAGEMENT

TheprincipalinvestigatorforthisprojectisDarrenSchmidt,hewillworkincoordinationwithteamleaderDr.Sundararajantoensureprojecttimelinesanddeliverablesaremet.AndreaMachadowillbeprimarilyresponsibleforthemodelingtask.Asubcontractisplannedtoconductthelaboratoryworkdescribedintask2.Theprojectteamhasawealthofexperienceinconductingsubcontractedlaboratoryworkandwillbefullyresponsibleforthetimelyexecutionandcompletionbythesubcontractor.FurtheroversightofStatoilfundsareaccomplishedthroughourtechnologyprojectdevelopmentmanagementsystemwhichincludesoversightfromseniormanagementwithinourResearchandTechnologygroupinNorwaymanagedwithinTechnologyProjectsandDrilling.

18

TIMETABLE

Thisprojectwillbecompletedinoneyearaccordingtothefollowingschedule.

• Task1–3months;interimreport.• Task2–6months;interimreport• Task3–6monthsinterimreport.• Finalreport–1yearfromstart.

BUDGET

Seeaddendum.

CONFIDENTIALINFORMATION

Thereisnoconfidentialinformationprovidedinthisproposal.

PATENTS/RIGHTSTOTECHNICALDATA

Patentrightsmaybepreservedrelativetosonicseparation.

STATUSOFONGOINGPROJECTS

StatoildoesnothaveanycurrentprojectswiththeNorthDakotaOilandGasResearchProgram.