Technologies to Monetize Gas at the

WellheadCombustion,

Heat Recovery and Power Generation

Flaring Issues, Solutions and Technologies

PTTC and EFD Workshop

Morgontown, WV.September 16th, 2014

Technologies to Monetize Gas at the

WellheadCombustion,

Heat Recovery and Power Generation

Flaring Issues, Solutions and Technologies

PTTC and EFD Workshop

Morgontown, WV.September 16th, 2014

QUESTOR TECHNOLOGY INC.QUESTOR TECHNOLOGY INC.

Why the focus on flaringWhy the focus on flaring US EPA and State regulation on emissions

Opportunities to reduced GHG’s emissions

Social cost of flaring – Public perception

Opportunities for the energy

Energy efficiency – Power, Heat, water vaporization

US EPA and State regulation on emissions

Opportunities to reduced GHG’s emissions

Social cost of flaring – Public perception

Opportunities for the energy

Energy efficiency – Power, Heat, water vaporization

1

New EPA RegulationsNew EPA RegulationsNSPS, 40 C.F.R. Part 60, Subpart OOOO(“Quad O”)NESHAP, 40 C.F.R. Part 63, Subpart HH(“HH”)

• New Control Technologies (CT) required

• Target Areas: New performance standard for VOC’s New performance standard for SO2

Hazardous Air Pollutant (HAP) standard for oil & gas production HAP standard for gas transmission & storage Recording and reporting for well completions Fugitive Emissions from compressors

• Performance test results required by EPA• Demonstration of compliance 24/7 365 days

NSPS, 40 C.F.R. Part 60, Subpart OOOO(“Quad O”)NESHAP, 40 C.F.R. Part 63, Subpart HH(“HH”)

• New Control Technologies (CT) required

• Target Areas: New performance standard for VOC’s New performance standard for SO2

Hazardous Air Pollutant (HAP) standard for oil & gas production HAP standard for gas transmission & storage Recording and reporting for well completions Fugitive Emissions from compressors

• Performance test results required by EPA• Demonstration of compliance 24/7 365 days 2

EPA Completions RequirementsEPA Completions RequirementsGas Wells

• Reduced emissions completion ‘REC’ or ‘Green Completion’

• Public notification

• Reduce VOC emissions by 95% (Reduced Emissions Completions or REC)Until Jan 1st, 2015 – still flare at some sites

After Jan 1st, 2015 – REC’s or Complete Combustions Device

Reduction of 95% in VOCs and GHGs from 25,000 well fracs

Gas Wells

• Reduced emissions completion ‘REC’ or ‘Green Completion’

• Public notification

• Reduce VOC emissions by 95% (Reduced Emissions Completions or REC)Until Jan 1st, 2015 – still flare at some sites

After Jan 1st, 2015 – REC’s or Complete Combustions Device

Reduction of 95% in VOCs and GHGs from 25,000 well fracs

3

US QUAD ‘0’ RequirementsDehydrators & Storage Tanks

US QUAD ‘0’ RequirementsDehydrators & Storage Tanks

Need Control Technology for: HAP, VOC’s, Methane

1. New Source Performance Standards (NSPS) 40 C.F.R. Part 60, Subpart 0000 (“Quad 0”) Storage Tanks VOC’s(> 6 tons/yr or > 0.82 mcfd hydrocarbon) Reduce VOC’s by 95%

2. National Emission Standards for Hazardous Air Pollutants (NESHAP) NESHAP, 40 C.F.R. Part 63, Subpart HH (“HH”) Benzene from Glycol Dehy (>3 MM scfd or Benzene > 1 Ton/yr) Reduce HAP by 95% or reduce Benzene to < 1 ton/yr

Focused on reducing smog, GHG emissions, ozone formation, PM2.5

Need Control Technology for: HAP, VOC’s, Methane

1. New Source Performance Standards (NSPS) 40 C.F.R. Part 60, Subpart 0000 (“Quad 0”) Storage Tanks VOC’s(> 6 tons/yr or > 0.82 mcfd hydrocarbon) Reduce VOC’s by 95%

2. National Emission Standards for Hazardous Air Pollutants (NESHAP) NESHAP, 40 C.F.R. Part 63, Subpart HH (“HH”) Benzene from Glycol Dehy (>3 MM scfd or Benzene > 1 Ton/yr) Reduce HAP by 95% or reduce Benzene to < 1 ton/yr

Focused on reducing smog, GHG emissions, ozone formation, PM2.5

4

Sources of EmissionsSources of Emissions

• All processes generate waste gas acid/tail gas BTEX/HC dehydrator vapors plant and pipeline maintenance flow backs, well-testing and workovers refinery/gas plant processing operations fugitive emissions tank vapors Associated or solution gas, etc

• All processes generate waste gas acid/tail gas BTEX/HC dehydrator vapors plant and pipeline maintenance flow backs, well-testing and workovers refinery/gas plant processing operations fugitive emissions tank vapors Associated or solution gas, etc

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COMBUSTION OF HYDROCARBONSCOMBUSTION OF HYDROCARBONSCH4 + 2 O2 = heat + CO2 + 2 H2OCH4 + 2 O2 = heat + CO2 + 2 H2O

Poor combustion results in the creation of:

CH4, CO, black carbon soot particulates Over 250 compounds Volatile organic hydrocarbons or VOC’s - benzene Sulfur compounds - H2S, carbon disulfides, mercaptans + over 250 other compounds identified in research

99.99% Combustion efficiency requires the right mixture of fuel and air

Destruction efficiency is not the same as combustion efficiency

Methane + Oxygen = heat + Carbon Dioxide + Water

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FLARING

• Difficult to measure efficiency and varies from site to site

• Heavily influenced by crosswinds allowing gases to escape unburned

• Difficulty burning rich gases often producing soot deposits and black smoke (BTEX, VOC, PAH)

• Entrained liquid droplets decrease combustion efficiency

• Poor efficiency with low heat content gas

• Visible flameBased on ARC and U of A Findings:

FLARING

• Difficult to measure efficiency and varies from site to site

• Heavily influenced by crosswinds allowing gases to escape unburned

• Difficulty burning rich gases often producing soot deposits and black smoke (BTEX, VOC, PAH)

• Entrained liquid droplets decrease combustion efficiency

• Poor efficiency with low heat content gas

• Visible flameBased on ARC and U of A Findings:

INCINERATION

Measured independently at 99.99% consistently

Combustion occurs in a closed chamber unaffected by winds

High temperatures efficiently burn rich gas. Air pre-mixed with the waste gas prior to combustion

Not effected by liquid droplet size

Use 80% less fuel gas with 99.99% combustion efficiency

No visible flame

Greenhouse Gas EmissionsGreenhouse Gas Emissions• The Global Warming Potential (GWP) of methane is

21 times higher than that of CO2 and therefore inefficient combustion increases the greenhouse gases emitted

• For example: 19,000 sft3/d (mscfd) of waste methane gas generates the following CO2 emissions:

T/d T/yr

Vented 7.6 2,775

65% combustion efficiency 3.3 1,205

80% combustion efficiency 2.3 840

99.99% combustion efficiency 1.0 365

• The Global Warming Potential (GWP) of methane is21 times higher than that of CO2 and therefore inefficient combustion increases the greenhouse gases emitted

• For example: 19,000 sft3/d (mscfd) of waste methane gas generates the following CO2 emissions:

T/d T/yr

Vented 7.6 2,775

65% combustion efficiency 3.3 1,205

80% combustion efficiency 2.3 840

99.99% combustion efficiency 1.0 365

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99.99% EFFICIENT COMBUSTION99.99% EFFICIENT COMBUSTION

Italy, Europe Calgary, Canada Texas, United States

Well Testing O&G Processing Acid gas

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National Geographic September 2005National Geographic September 2005

WASTE HEAT RECOVERY

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QUESTOR TECHNOLOGY INCQUESTOR TECHNOLOGY INCQuestor is a leading provider of

safe, clean, efficient, reliable, flared gas combustion solutions

that utilize the heat generated to provide power, water and process heat solutions.

Our products enable our clients to operate cost effectively in an

environmentally responsible and sustainable way.

Questor is a leading provider ofsafe, clean, efficient, reliable, flared gas

combustion solutionsthat utilize the heat generated to provide power, water and process heat solutions.

Our products enable our clients to operate cost effectively in an

environmentally responsible and sustainable way.

10

US And Global ExperienceUnits deployed; California

Colorado

Kentucky

Mississippi

New York

North Dakota

Ohio

Pennsylvania

Texas

West Virginia

Wyoming

Canada

Russia

Caribbean

Indonesia

Thailand

China

Germany

Netherlands

Italy11

OUR CLIENTS

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EXPLORATION & PRODUCTIONEXPLORATION & PRODUCTION

• Portable Trailer units with Hydraulics for set up

• Well testing/workovers

• Early production testing

• Post fracturing cleanup

• Flare elimination

• Portable Trailer units with Hydraulics for set up

• Well testing/workovers

• Early production testing

• Post fracturing cleanup

• Flare elimination

Portable Q3000 13

Well Completions• Community support

• Regulatory compliance

• Gas quality not an issue

• Eliminates odor and visibility

• Low ground heat

• Minimal noise emission

Best available technology

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Units in parallelEurope 14

Colorado Niobrara – Pad DrillingGreen Completions and Early Production Testing

Colorado Niobrara – Pad DrillingGreen Completions and Early Production Testing

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SAFETYSAFETYWest Stoddart -75% H2S and 25% CO2West Stoddart -75% H2S and 25% CO2

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LOW GROUND HEAT RADIATIONLOW GROUND HEAT RADIATION

Safety Facility integration

Personnel safety

Minimal heat radiation Eliminates fire hazard

Permafrost protection

Portable Q3000 17

FACILITIES – ONSHORE/OFFSHOREFACILITIES – ONSHORE/OFFSHORE• Dehydration facilities• Acid gas & tail gas• Amine facilities• In situ operations• Gas processing• Compressor blow downs• Tank vapors • Early Production tests• Maintenance

• Dehydration facilities• Acid gas & tail gas• Amine facilities• In situ operations• Gas processing• Compressor blow downs• Tank vapors • Early Production tests• MaintenanceQ500

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• BTEX destruction (>99.99%)

• EPA Compliance

• NO condensing of vapors

• NO storage tanks

• NO water disposal costs

• Integrated package

• Reduced footprint

• Reduced piping

• Minimal fuel use

• BTEX destruction (>99.99%)

• EPA Compliance

• NO condensing of vapors

• NO storage tanks

• NO water disposal costs

• Integrated package

• Reduced footprint

• Reduced piping

• Minimal fuel use

INNOVATIVE SOLUTIONSGLYCOL DEHYDRATION HAP/VOC EMISSION DESTRUCTION

Q250 West Virginia19

NO K.O. AND NO CONDENSINGNO K.O. AND NO CONDENSING

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DEHYDRATION ECONOMICSDEHYDRATION ECONOMICSFirst Year Economics (Actual Case)Thermal oxidizer destroys benzene (HAP) emissions and results in facility compliance (EPA)

Thermal Oxidizer

• Q250 thermal oxidizer capital cost $145,000• Annual cost1 to operate $ 16,500

Total cost of T.O. Option: $161,500

Condensing Regenerator Overheads• Condenser capital cost $100,000• Condenser operating cost (annual) $ 5,500• Trucking and disposal of fluid2 $106,600• Combustion device for the uncondensables $ 50,000

Total Condenser Option: $262,1001Fuel cost is $2.50/mcf28,200 gallons/week at $0.25/gallon for trucking and disposal

First Year Economics (Actual Case)Thermal oxidizer destroys benzene (HAP) emissions and results in facility compliance (EPA)

Thermal Oxidizer

• Q250 thermal oxidizer capital cost $145,000• Annual cost1 to operate $ 16,500

Total cost of T.O. Option: $161,500

Condensing Regenerator Overheads• Condenser capital cost $100,000• Condenser operating cost (annual) $ 5,500• Trucking and disposal of fluid2 $106,600• Combustion device for the uncondensables $ 50,000

Total Condenser Option: $262,1001Fuel cost is $2.50/mcf28,200 gallons/week at $0.25/gallon for trucking and disposal 21

TANK VAPORS TIED-IN DIRECTLY NO KNOCKOUT OR VRU NEEDED

TANK VAPORS TIED-IN DIRECTLY NO KNOCKOUT OR VRU NEEDED

22

Heat from clean combustion of typically flared gas at 99.99% efficiency – Other sources of heat

Recover and utilized the heat

Water vaporization/steam generation

Power generation

Process and utility heat

Hydrate prevention

Heating up oil and water

Benefits: Economics, Environment, Social license to operate

Conservation of the gas in an economic way

HEAT UTILIZATION

25 23

CLEARPOWER SYSTEMS INC

ClearPower’s is a leading provider Organic Rankine Cycle power

generation technology utilizing waste heat.

Integrated with QTI’s incineration solution we can provide power cost

effectively from waste streams reducing greenhouse gas emissions

at less than $1.50/tonne of CO2eq.24

EVAPORATOR

CONDENSER

Clear PowerOrganic

Rankine Cycle (ORC)

Power Plant

Pump

Pump

HeatQuest Exchanger

POWER GENERATION

EXPANDER

Generator

Waste gas Combustion

Power for:• Compressor• Pumps/motors• Amine regenerator

P-Tank

Flow back/well test

Well Head

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Organic Rankine Cycle Waste Heat to PowerOrganic Rankine Cycle Waste Heat to Power

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CHP AND IMPACT ON GHG’SCHP AND IMPACT ON GHG’S• Power Generation from Heat50 kW from 12 MM btu/hr of waste gas in

Q500

• Each 50 kW WHP reduces GHG by 13,750 tonnes/yr

• Cost per tonne of GHG reduction is $1.24

• Compare with carbon sequestration ranging from $90 – 120/tonne1a to $300-1,100 per tonne2b

1Carbon Capture and Storage Association

2Science Magazine

• Power Generation from Heat50 kW from 12 MM btu/hr of waste gas in

Q500

• Each 50 kW WHP reduces GHG by 13,750 tonnes/yr

• Cost per tonne of GHG reduction is $1.24

• Compare with carbon sequestration ranging from $90 – 120/tonne1a to $300-1,100 per tonne2b

1Carbon Capture and Storage Association

2Science Magazine

(a) http://www.ccsassociation.org/why-ccs/affordability/

(b) http://news.sciencemag.org/2011/12/capturing-co2-too-costly-combat-climate-change

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Waste Heat Market – Potential Sites

100s

1,000s

~100,000

10,000s

1,000,000s

Well Served by Ormat, GE, Turboden, Turbine Air Systems,Atlas Copco

Virtually Un‐Served Market

Partially Servedby GE / Calnetix 

(1 – 5 MW)

(5 – 10 MW)

(>10 MW)

(100 kW – 1 MW)

(< 200 kW)ClearPower target market

Opportunity 28

29

$/kWInstalledCapacity

Relative Cost of ORCs

Generator Output Size

Opportunity

CONCLUSIONSCONCLUSIONS• Solutions needed to address regulation, landowner

issues, social license to operate.• Regulatory compliance and minimizing CO2e, VOCs and

Hazardous Air Pollutants• Clean combustion creates opportunities to utilize the

heat – especially when the stream has minimal value• Must make business sense, reliable, safe and

environmental • 3-4 year payouts on CHP in $0.10 kWh market• Demonstration sites showcasing the opportunities

• Solutions needed to address regulation, landowner issues, social license to operate.

• Regulatory compliance and minimizing CO2e, VOCs and Hazardous Air Pollutants

• Clean combustion creates opportunities to utilize the heat – especially when the stream has minimal value

• Must make business sense, reliable, safe and environmental

• 3-4 year payouts on CHP in $0.10 kWh market• Demonstration sites showcasing the opportunities

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www.questortech.comTSXV – “QST”

#1121, 940 – 6th Avenue S.W. Calgary, AB, Canada

T2P 3T1(403) 571-1530 (Phone)

(403) 571-1539 (Fax)

Ritchie StaggDirector of Sales and Marketing

(403) 539-4374

rstagg@questortech.com

ENVIRONMENTAL PROTECTION

PUBLIC CONFIDENCE COST REDUCTION FOR CLIENTS

QUESTOR TECHNOLOGY INC.

APPENDIX

QUESTOR STOCK DESIGNSQUESTOR STOCK DESIGNS

MODEL DESIGN FLOW* HEAT CAPACITY (mscfd) (MM btu/hour)

Q20 20 1 Q50 50 2 Q100 100 4 Q250 250 10 Q500 500 20 Q1000 1000 40 Q3000 3000 120 Q5000 5000 200

MODEL DESIGN FLOW* HEAT CAPACITY (mscfd) (MM btu/hour)

Q20 20 1 Q50 50 2 Q100 100 4 Q250 250 10 Q500 500 20 Q1000 1000 40 Q3000 3000 120 Q5000 5000 200

*Methane equivalent heating value

ENGINEERED FUEL TRAINSENGINEERED FUEL TRAINS

INEFFICIENT COMBUSTIONINEFFICIENT COMBUSTION

Canada Middle East Africa

Upstream Refining Flare Pit

HOW THEY WORKHOW THEY WORK

• Proprietary gas burner control creates a high velocity vortex

• Air is naturally drawn in

• Air and fuel is pre-mixed

• Refractory lined chamber 2350 oF stack top temperature

• High efficiency VOC and HAP destruction

• Optimal SO2 dispersion with velocity, temperature and effective height

• Proprietary gas burner control creates a high velocity vortex

• Air is naturally drawn in

• Air and fuel is pre-mixed

• Refractory lined chamber 2350 oF stack top temperature

• High efficiency VOC and HAP destruction

• Optimal SO2 dispersion with velocity, temperature and effective height

>99.99% COMBUSTION EFFICIENCY>99.99% COMBUSTION EFFICIENCYQuestor’s incinerators have been independently tested to demonstrate a combustion efficiency greater than 99.99%.

CLIENT APPLICATIONVacquero (2004) BTEX/ C1-C30+Shell Canada (2000) H2S / HCExxon/Mobil (1998) H2S / HCEncana US (2007) BTEX & VOCs TransCanada (2003) MethaneEPA US (2007) VOCsARC Resources (2002) H2S TRC (2012) VOCsEnbridge BTEX/VOCsAFAB Tire Recycling Chlorinated HC

Test results support a combustion efficiency >99.99%

Destruction efficiency is not the same as combustion efficiency

Questor’s incinerators have been independently tested to demonstrate a combustion efficiency greater than 99.99%.

CLIENT APPLICATIONVacquero (2004) BTEX/ C1-C30+Shell Canada (2000) H2S / HCExxon/Mobil (1998) H2S / HCEncana US (2007) BTEX & VOCs TransCanada (2003) MethaneEPA US (2007) VOCsARC Resources (2002) H2S TRC (2012) VOCsEnbridge BTEX/VOCsAFAB Tire Recycling Chlorinated HC

Test results support a combustion efficiency >99.99%

Destruction efficiency is not the same as combustion efficiency

• Electronically controlled Burner Management System (BMS) designed for natural draft systems Fully automated safety interlocked start-up process Continuously monitored pilot flame Manual Emergency Switch Valve proving system Excess Temperature limit interlocked

• Safety Shutdown Valves for Pilot and Main Fuel Gas• Isolated, regulated and controlled gas supply for Pilot

and Main Fuel Gas• Pressure shutdown switches on Main Fuel Gas line for

over and under pressure• Appropriate test points for pressure indication• Components are combustion gas rated for

commercial/industrial use

NFPA 86 COMPLIANCENFPA 86 COMPLIANCE

NFPA BMS COMPLIANCENFPA BMS COMPLIANCE

NEXENCALGARY34 % H2S

NEXENCALGARY34 % H2S

Oilweek Jan 3 2005

“The use of the Questor Incinerator for combusting the sour gases (35% H2S) vented from the well and the inclusive method that Nexen used when planning the project allowed for smooth passage of the workover with the EUB, the City of Calgary, the Municipal District of Rockyview and the many residential stakeholders.”

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OIL BATTERY- SOLUTION GASCabre/Enerplus Facility

OIL BATTERY- SOLUTION GASCabre/Enerplus Facility

Sour produced gas and vapors from production tanks

• Sour rich solution gas – 1,620 btu/scf

• Formerly a smoky flare and odor at site

• Flow rates between 50 - 950 mscf/d 20 to 1 turndown

• Single thermal oxidizer combusting multiple streams at variable rates, pressures and compositions

Sour produced gas and vapors from production tanks

• Sour rich solution gas – 1,620 btu/scf

• Formerly a smoky flare and odor at site

• Flow rates between 50 - 950 mscf/d 20 to 1 turndown

• Single thermal oxidizer combusting multiple streams at variable rates, pressures and compositions

Q500

4

45

Hi Audrey 

I hope you are well

I'm working on something to present to the UK shale sector as it still seems to be struggling to get off the ground and the “anti‐ frackers” seem to be gaining ground each week, recent applications to drill test wells have again been rejected by the local councils with differing reasons for the rejections.

Anyway I have an idea I want to put forward to the UK Onshore Operators but I need some real professional help and support, my idea is to create “road show” type events in the main areas where Shale is prevalent and instead of the operators supplying engineers and local councillors (who have no experience) being wheeled out to nod their heads I would like to gather together real industry experts who can address the specifics of the issues being raised.

One of the issues that keep being bandied around is the bad gases from a test well while flaring, now we both know there is a proven reliable alternative but no one seems to be aware of the technology or doesn’t see the link……..

I look forward to your response 

7

NexenIn Calgary 201234 % H2S

NexenIn Calgary 201234 % H2S

COMMUNITY ACCEPTANCE

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