Innovative Solutions in Shale Oil Production
Indrek Aarna
Head of R&D Department
Eesti Energia AS
April 27, 2010
Jõhvi
Why to produce oil out of rock?
2
Historical crude oil production data (billion bbl/y) and forecast
Peak Oil
Many countries have already passed oil peak
3
120
100
80
60
40
20
0
jaan.09
In a long-term IEA is forecasting continuous growth in prices
of crude oil
140
jaan.07

Over last 4 years oil price has been over $60/bbl 70% of the
time, which is sufficient for wider utilization of unconventional
oil resources
160
jaan.05

Crude Oil Price
jaan.03

Pessimistic forecasts show that oil production peak has already
been reached
Optimistic forecasts predict that crude oil production will reach a
plateau in 2020 and peak oil will occur in 2030 (IEA)
jaan.01

jaan.99

jaan.97

jaan.95

In USA oil production peaked in 1971
In Europe peak oil occurred a couple of years ago
In Russia second peak will be reached this year
OPEC is keeping its reserve estimates in secret
jaan.93

jaan.91

Peak oil is the point in time when the maximum rate of global
petroleum extraction is reached, after which the rate of production
enters terminal decline (Wikipedia).
Peak oil has already been reached in many countries:
Oil price [$/bbl]

The Potential - Global Oil Shale Reserves
The potential world resources of shale oil are huge – estimations range from 3 to 9 times higher than the proven conventional oil
reserves. The biggest resource is located in the USA
Global Oil Shale Resources (In-place Shale Oil Resources)
North America
bn bbl
Europe
2,100
bn tonnes
bn bbl
304
South America
bn bbl
82
bn bbl
bn tonnes
12
bn tonnes
bn bbl
bn tonnes


159
bn bbl
23
There is enough oil shale resource to
replace crude oil until renewable energy
has been developed to a next level
Wider utilization of oil shale has been
hindered by lack of efficient and
environmentally friendly oil shale
processing technology
bn bbl
32
bn tonnes
46
7
Middle East
Australia / NZ
Total oil shale resources is estimated to be
2.8 billion barrels, more than 3 x
conventional oil
53
Asia
Total Africa

368
bn tonnes
bn tonnes
5
38
6
Global Potential Hydrocarbon Resources

Oil Shale is considered as top
unconventional hydrocarbon
resource for the future

Shale Oil is currently produced
in Estonia, China and Brazil, but
studies are ongoing in several
countries
Shale Oil
29%
Extra Heavy Oil
25%
Bitumen
34%
Source: World Energy Council (2007)
4
Crude Oil
12%
Oil Shale is Competitive
Oil shale is competitive with conventional resources
Oil Production Cost Chart
Oil Price Chart
200
100
Forward
Actuals
$90bbl
$79bbl
80
$75bbl
143.57
150
$60bbl $60bbl $60bbl
Brent (US$ / bbl)
60
40
97.37
100
Today
86,14
$25bbl
71.63
$20bbl
20
50
52.6
35.38
Source: CERA, Eesti Energia
Oil Sands
Source: Bloomberg
5
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
0
2005
Angola Deepwater
Deepwater Gulf of
Mexico
Oil Shale
Onshore US
UK North Sea
Russia
Saudi Arabia
0
What is Enefit280 technology?
6
Eesti Energia Oil & Gas
EE’s biggest competitive advantage is the existing commercial scale shale oil extraction technology
Narva Oil Plant – 2 x Enefit140 units
Enefit Oil & Gas
Shale Oil Production by EE Oil&Gas põlevkiviõli (th. bbl)
1130
1200

Commissioned in 1980

Since its initial design, 70% of the equipment has been replaced and
improved by the plant engineers

Two unique production units of Enefit140 (140 t/h oil shale throughput
each)

Maximum capacity 820 t/d of oil (5,300 bbl/d)

Retort gas production of 43 million Nm3/year (utilized for power
production)

Established as a limited company by EE in 2007

Sales numbers have increased by over 25% a year
1018
1000
900
Enefit technology is proven technology
820
800
655
600
490
390
400
270
200

Enefit has many years of operational history

Successful results over last 25 years – successful industry in Estonia

Enefit technology has potential to become leading technology
0
1990
1995
2000
2003
2005
2007
2008
2009
7
New Generation of Enefit Technology – Cooperation with Outotec
To develop the new generation of Enefit technology a cooperation has been established with Outotec Oyj from Finland
&
Detailed design in progressconstruction started:
• Enhanced heat recovery
• Reduced mechanical equipment
• Reduced emissions
• Higher oil yields
• Designed for highest availability
Current Narva Oil Plant
Future Enefit280
Current Production:
Oil - 170,000 tonnes/year
New Plant adds:
Oil - 290,000 tonnes/year
Total Production 2012:
Oil - 460,000 tonnes/year
8
How does Eesti Energia’s Enefit 280 process work?
Unit size
Drying
•
The Enefit280 has twice of the
capacity of it's predecessor Enefit140
Availability
Combustion
•
The availability of the unit has been
increased from 75% to more than
90%
Efficiency
•
The Enefit280 unit will recover heat
from the ash and flue gases
• The heat can be utilized for power
production
Retorting
Lower environmental impact
•
9
The lift pipe combustor has been
replaced by CFB boiler which will
result in a more complete combustion
of the spent shale and cleaner flue
gases
Enefit’s Global Activities
Enefit has been providing consulting services and is in early stage negotiations also with several countries
Enefit worldwide oil shale projects for oil and power production
Estonia
USA
Project:
50,000 bbl/d shale oil
Enefit interest:
technology sale
Developer:
OSEC, Mitsui,
Project:
Enefit 280 construction
Developer:
Eesti Energia (Enefit)
Project status:
construction ongoing
China
Petrobras
Project status:
conceptual study
Projects:
shale oil production
performed
Enefit interest:
technology sale
Developers:
Longkou Mining Co.
Fushun Mining Co.
Project status:
Morocco
Project:
shale oil + power
Enefit interest:
technology sale
project development
Project status:
MoU signed
negotiations ongoing
Jordan
Projects:
38,000 bbl/d shale oil
600-900 MW power
MoU signed
Enefit interest:
project development
technology sale
Project status:
concession terms agreed,
waiting for cabinet approval
10
Is it possible to produce motor fuels out of shale
oil?
11
EE is Expanding its Shale Oil Production
Installation of shale oil upgrader will become feasible at higher volumes
Today there is a limited market for raw shale oil:
• Bunkering fuel
• Boiler houses


Commissioning of 20,000 BPD shale oil upgrader in 2016
7 mil. bbl of shale will be produced by EE Oil & Gas
Specification of fuels will become stricter and it will more
difficult to sell raw shale oil
Forecast of EE’s shale oil production
8
Next 2 Enefit280
Raw shale oil
Hydrotreated shale oil

High density

Low density

0.8 wt% sulfur

“bottomless”

6.1 wt% oxygen

Feasible >20,000 BPD
Limited market
(ships, boiler houses)
Põlevkiviõli tootmisvõimsus (mbbl/aastas)
Shale quality after hydrotreatment
Product for refineries
7
Shale Oil
Upgrader
6
5
4
New Enefit280
3
2
Today’s
production
1
0
2009 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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Key Quality Challenges of Estonian Raw Shale Oil
Pilot plant tests gave promising results
Quality
Raw
Shale Oil
Composite
[C5 to
525°C]
Hydrotreated
Shale Oil
Product
[C5 to 525°C]
Brent Crude
Syn Crude Oil
Analog
[C5 To 565°C]
Volumetrics
Vol %
100 % In
107 % Out
-
API Gravity
°API
15°
35°
42°
Sulphur
Wt%
0.8
0.015
0.3
Nitrogen
Wt%
0.25
0.025
0.045
Oxygen
Wt%
6.1
< 0.3
0.15
Hydrogen
Wt%
9.8
12.9
13.3
CI(D976)
~ 28
~ 47
~ 49
‘g Br2
45
1
<2
-
10.5±
11.7±
11.9±
Diesel Cetane
Bromine No.
UOP/Watson K
13
Shale Oil Upgrader Plant
EE’s shale oil upgrader plant do not need external hydrogen source
ASU Oxygen
Sweet Fuel Gas
Hydrogen
Plant
Retort Gas
Treaters
Oil Shale
2×Enefit 140
Shale Oil
Hydrotreater
Unit
New
Trains
4×Enefit 280
Sales Naphtha
Condensation
Ash
Hydrogen
Recycle VGO
Unique concept of EE’s shale oil upgrader:



Low-Sulphur
Diesel Gas Oil
Low-Sulphur
Vacuum Gas Oil
In order to prove the concept, shale oil
hydrotreatment tests were performed in 2008
 Long-term pilot plant tests are currently
ongoing
 EE has started basic design of shale oil
upgrader

Hydrogen is generated from retort gas generated by Enefit280
technology
EE’s retorting units and upgrader do not need external energy
sources
Shale oil upgrader will produce feedstock for near-by refineries
14
Summary

Oil shale resource is big enough to replace crude oil and crude oil price has been high enough
to expand shale oil production around the world.

EE in cooperation with Outotec has developed a new generation soild heat carrier technology,
which:
 Higher thermal efficiency
 Lower environmental impact
 Higher availability
 Produces power as a byproduct

Enefit Outotec Technology OÜ is developing new shale oil production technologies for
processing of other shales

EE is taking next steps in extracting more value out of shale oil – hydrotreatment of shale oil
allows to produce refinery feedstock for nearby refineries
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