What Are Oil and Gas Production Facilities?
In this video, we learn the basics of oil and gas production facilities. To summarize, these facilities must separate, treat, and store (or ship) everything that came out of the well(s). In this video, we also review why facilities differ from each other, common components, examples, and ongoing initiatives in industry design.
0:00 Introduction
0:45 Purpose & Function
2:15 Design Factors & Considerations
5:35 Common Components
6:27 Examples
8:15 Facility Initiatives Today
8:51 Conclusion
Outline
- Purpose/function
- Take what comes out of the well(s), measure production volumes, and make it sellable.
- Oil, gas, water, and various impurities can flow out of a well.
- Revenue generating products must be separated and measured. This is how oil & gas companies get paid and also how they pay royalty owners.
- The facility prepares the sellable products for midstream companies to transport, refine, and sell it to downstream markets.
- The facility separates, treats, and stores (or ships) everything that came out of the well(s).
- Background
- Facilities can differ due to many factors
- Well pressure
- Well production volumes (oil, gas, water)
- Number of wells
- Composition of wellbore fluids (including amount of impurities)
- Midstream requirements
- Federal, state, and local requirements
- Mineral/royalty ownership
- Operator preferences – how and where they wish to perform the actions mentioned under “purpose/function”
- Local available infrastructure
- Complexity
- Complexity and size vary
- Adequate spacing must be provided between each piece component
- Facilities can differ due to many factors
- Components
- Primary/common
- Separators (heated/unheated, vertical/horizontal, 2-phase/3-phase/4-phase, etc.)
- Measurement (meters – often allocation and custody transfer meters included)
- Storage (ex. tanks)
- Additional gas processing (ex. dehydration systems)
- Accessories
- Compressors
- Combustors/flares
- Pipes & valves
- Pumps
- Pigging equipment (to keep midstream lines clear)
- Electrical equipment (ex. generators, transformers, breakers)
- Control systems/automation
- Heaters/coolers/heat exchangers
- Filters
- Primary/common
- Examples
- An unlimited number of examples exist
- Legacy – separator, tank, gas meter
- Emissions controlled – separator, tank, VRT, VRU, combustor, meter
- Centralized
- Facility by well(s) might just include separator (for accounting)
- Production streams commingled and sent to centralized battery in field or on lease
- Centralized facility could include separators, tanks, emission control devices (VRU, combustor/flare, etc…), gas processing/conditioning equipment, meter, and accessory items
- Facilities today
- Many companies striving to:
- Reduce footprint
- Reduce emissions
- Increase safety (often with automation)
Transcript
So right here is literally another one. So there’s literally oil and gas production facilities all over the place. You’re gonna have a variety of sizes and designs but essentially their purpose is all the same. So probably when most people think about oil and gas they think about a lot of the the heavy industrial type activity that happens in the first stages of essentially getting the well ready for production. So we’re talking about the drilling, so when you see the drilling rig, the hydraulic fracturing process obviously gets a lot of attention. But really what’s gonna be sticking around for the life of the well, is actually the production facility.
So you’re always going to find some type of facility within a reasonable distance of any well, and the reason being is we’ve gotta take what comes out of that well, i.e. oil, gas, and water, and even some impurities, ’cause remember this is all mixed up thoroughly from being inside the pore space of rock, literally thousands of feet below us. So we gotta take that and be able to separate, treat, and prepare those things for sale or disposal. Now the oil and the gas is actually what makes the producers money and that’s the product they’re after, so they’ve gotta separate that out, clean it up to whatever extent necessary, and get it to sales. The gas almost always goes into a buried sales pipeline and the oil can also either be put into a pipeline or stored on site for pickup by truck. Either way, once the oil or gas leaves the sites, the producer gets paid typically by the midstream company or whoever takes possession of it.
Now often at multiple points through these processes the volumes are measured and that’s not only how royalty owners get paid but also how the operating company gets paid. Also it lets the operating company get a better understanding of how their wells are producing and what things can be done to optimize them. Now, I also mentioned that water gets produced outta these wells, and that’s not always true, but more common than not. So that water, once it’s separated, will also be kept on site for trucking or can also be sent into a pipeline, just like oil. However operators don’t get paid for that, instead they would actually pay to have it taken away and disposed of. In some cases that water can actually be recycled or even produce revenue, but that is often not how the story goes.
All right, so now that you have a better understanding of why we need facilities and what they do for us, let’s talk about design. Now, if you were to take two facilities and try to compare them, you might be surprised that they’re vastly different, and that can be as simple, as well they had different designers, but it is more likely due to a number of different factors that I wanna discuss and spell out for you here. So these are in a couple different categories. First off let’s look at well characteristics. Now this is definitely going to define a facility and essentially what components we need, as well as sizing. We’re gonna be talking about things like well pressure, so what is the pressure on the wells that the facility’s going to have to deal with? What is the volume and composition of what the wells are producing? Are these mostly gas wells, is this mostly oil wells? How much water do we have to deal with? How many impurities we have to deal with and filter out? All of these things are going to dictate simple things such as the size and number of equipment that we’re going to need to deal with and what we have at hand. Also the number of wells, right? So it’s going straight to how much volume we’re gonna have to be dealing with.
Now as you can imagine, the greater the number of wells, the higher the volume that we’re going to be getting out of these wells. You can imagine that would make the facility bigger. And of course, if this is only a one well facility, it’s probably not gonna have to be that big. However, economies of scale do come to play with facility design, and the size of the facility does not scale perfectly with the number of wells. Next category I wanna discuss is requirements. So these are things such as federal requirements, state requirements, and even local requirements. So what are the laws that govern the facility and its design, as well as the midstream requirements. So remember I said at the beginning, we’re going to be selling this oil and the gas, right? So the company that’s taking this from us, taking it off our hands, what are their requirements for them to pick it up, for them to pay us for it, what requirements do we have to meet? That’s gonna also filter back to what types of equipment we need to make us be able to hit those specs. So this can be things such as, you know how saturated the gas can be, how much water is in the gas, what temperature requirements do they have, as well as how much tolerance do they have for impurities such as H2S or hydrogen sulfide? And the last group of factors I wanna discuss and of course there’s more, but let’s talk about preferences and options. So this is as simple as, well what is the operating company or the oil and gas company, what preferences do they have? What lessons learned have they had? How stringent are they on X, Y, Z things? That’s going to factor into it, as well as what local options there are for the midstream companies or midstream takeaways. So that also is going to affect design.
So what you want to quickly realize about the design of a facility is that the same objectives can be met a lot of different ways. Now, oftentimes if you’re to look at a specific geographical region or even a specific operator, you’re going to see very similar trends. In a specific geographic area, the operating companies are going to be dealing with similar constraints and trying to meet similar objectives. So they’re probably gonna need similar types of equipment, they’re working in the same local governing entities, so you’re gonna see some similarities there. And then within a company themselves, usually they don’t wanna be changing facility designs every day or making every facility-specific or specialized, so you’re going to also see some consistencies along the companies as well.
All right, so now let’s go over a handful of different examples of components that you might find on a facility. Now, of course, these are in no particular order, and as mentioned, every facility can differ from each other. Some facilities might only have a few of these items while some might have all of them and even more. Now I would say it’s safe to say, almost every single facility is going to have some form of separation equipment. This can be heated or unheated, it can be vertical horizontal, two, three or even four-phase separators. You’re also going to have meters, tanks, additional gas processing, that might come in the form of dehydration systems, compressors, combustors or flares, pipes and valves, pumps, pinging equipment, heaters, coolers, heat exchangers, filters, and of course you’re going to have the electrical systems and control systems or automation systems necessary to make the facility work and function safely. And as a side note, we actually have a handful of videos on these components and more will be coming.
All right, so as you can imagine, there is an unlimited number of facility designs and examples that we could talk about, but I gonna give you just a few to start wrapping up this video. So first off let’s talk about legacy sites. So this might be the wells that were drilled in the 1900s and early 2000s, when the emissions requirements weren’t as stringent, and so they might literally just be the well itself, the separator, the tank, and the midstream gas connection, and then the associated meters. So it might be very simple and you can take that now. And let’s talk about a site where we would wanting to capture and control those emissions, and rightfully so. So those sites are going to not only have the same components as last time but now they’re going to be including things such as vapor recovery towers, you’re gonna be including vapor recovery units, you might have combustors and flares, all those kinds of things. So basically what we’re trying to capture there or prevent from, is the release of a methane, right? So what happens is whenever you have high pressure oil or water in your separator, and you dump it to an atmospheric tank, you get what we call “flash gas”. So that’s basically going to be natural gas hydrocarbon coming out of solution from that liquid state, so we’ve gotta either capture it or destroy it. The third example I wanna give you and of course there’s obviously many, many more, is the idea of a centralized facility. So this might literally just be, you have a well pad, you got multiple wells, and they might have literally just separators for allocation on that well pad. So every well would have its own separator, and you’re just getting the allocation numbers and you’re recombining everything, and sending it to a centralized facility. That allows for a lot greater efficiency for the rest of the process. Usually this reduces emissions and reduces operating expenses. Often this is preferable if you have a lot of production in a centralized area. But as you can imagine, oftentimes that is not the case.
All right, so as you can imagine facility design has changed a lot in the past years and of course it will continue to do so in the future. Now, what companies are often focusing on right now include things such as reducing their footprint, so using less land to build the facility. Second, they’re also focused on reducing emissions and also increasing safety. So this is done on variety of ways, often one of the ways that’s achieved is through greater automation of the facilities, that also helps to reduce the manpower that is required to keep the facility running. And of course, reduction of cost.
Now, of course, facilities wouldn’t be able to stay up and running without service companies, such as Apex Energy Service of Pennsylvania. These are companies that help to build and maintain the facility, through offering roustabout services, they can clean the facility, they can also build and maintain the containment, and of course, offer trucking service as well. Well, so a big thanks to Apex for sponsoring this video. And thank you guys for we’re watching. If you enjoyed the video, please be sure to like it and share it with a friend. And of course, if you have any future topic suggestions, go ahead and drop it in the comments below. Until next time guys, take care and we’ll catch you in the next one.
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