Statoil Makes First Solar Investment, Highlights a Growing Trend 0

Norwegian oil major Statoil has purchased its very first stake in a solar project, agreeing to pay $25 million to acquire 40% of the 162 MW Apodi solar asset in Brazil. The deal is the latest example of a growing trend of major oil and gas companies taking stakes in renewable energy projects.

“The Apodi asset is a sensible first step into the solar industry and can demonstrate how solar can provide Statoil with scale-able and profitable growth opportunities,” Irene Rummelhoff, executive vice president of New Energy Solutions at Statoil, said in a press release.

Statoil agreed to purchase the project stake from Norwegian independent solar power producer Scatec Solar in October. The purchase price also included a 50% share in the project execution company, which will enable Statoil to participate and the building and operation of more Brazilian solar projects in the future.

“The potential for solar energy in Brazil is substantial and together with Statoil we are increasing our ambitions further in this market. We are bringing into the partnership a strong track record as an integrated independent solar power producer, while Statoil has a strong engagement and experience from Brazil through its other energy activities,” said Scatec Solar Chief Executive Officer Raymond Carlsen.

About the Adopi Solar Project

The Apodi solar project is set to provide electricity for about 160,000 households. Construction of Apodi was set to start in October 2017, with completion expected by the end of 2018. The total capital expenditure budget for the development is estimated at $215 million. Funding for the project is comprised of 65% project financing and a 35% equity contribution. Statoil’s portion of the equity share is estimated at $30 million.

The Apodi solar project is in the Quixeré municipality of the state of Ceará in northeast Brazil. It is fully-permitted with a grid connection and has a 20-year power purchase agreement (PPA) awarded in 2015 at an auction organized by the Brazilian government. The PPA had an inflation adjusted offtake price equivalent to $104 per MWh in 2017.

In recent years, Statoil estimates about 3GW of solar projects have been awarded in Brazil in three consecutive utility scale solar auctions. Another 7GW is planned to be awarded by 2024.

Following the transaction, Statoil will hold a 40% share in the project alongside Scatec Solar (40%) and ApodiPar (20%).

Statoil’s Green Energy Ambitions

Though the Apodi project is Statoil’s first solar venture, it is not the company’s first foray into renewable energy. Since 2012, Statoil has amassed a sizable wind portfolio that includes three UK wind farms, one of which is the world’s first floating offshore wind farm, Hywind Scotland. In 2016, the company also purchased a 50% stake in the Arkona offshore wind farm planned in Germany, which is set to come online in 2019.

Statoil’s wind portfolio is capable of providing power to more than 1 million homes.

“As part of Statoil’s strategy to actively complement our oil and gas portfolio with profitable renewable energy sources, we have so far focused on offshore wind where we have a unique competitive advantage building on over 40 years with oil and gas activities, “Rummelhoff said.

More Supermajors are Investing in Renewables

Statoil is just one of several major oil and gas companies that are making moves into the renewables business. In December 2017 alone, several notable investment in the sector were inked by BP, Royal Dutch Shell and Saudi Aramco.

That month, Saudi Aramco Energy Ventures (SAVE) led a financing round that raised $8 million euros (US$9.6 million) for a German company that is commercializing a new technology for the fabrication of silicon wafers for photovoltaics called NexWafe.

Shell Technology Ventures B.V., the corporate venture capital arm of Royal Dutch Shell, was likewise part of a group of investors that invested a combined $9 million in a Series B equity round for SolarNow, a Dutch company that installs off-grid solar energy systems in East Africa.

Meanwhile, BP paid $200 million for a 43% equity stake in Lightsource, the largest solar development company in Europe that is focused on acquiring, developing and managing large-scale solar projects.

Like Statoil, BP’s move is also part of a concerted effort to invest in renewables. BP has an Alternative Energy Business with interests in onshore wind energy across the US capable of generating 2.3GW, and as well as stakes in Brazilian biofuels plants that produce around 800 million liters of ethanol equivalent per year.

Green Energy is Gaining Steam

These deals comes as technological improvements and lower costs are transforming solar into an attractive power source that can compete with traditional sources of energy in important markets. BP’s Statistical Review of World Energy notes that global installed solar generating capacity more than tripled from 2013 to 2016, rising by more than 30% in 2016 alone.

The growing viability of renewable energy sources is evident across the globe, and the appetite for these projects is increasing globally as countries work to meet commitments made during the Paris Agreement in 2015 amid growing concern about climate change.

Now, the building momentum for these installations has even caught the eye of supermajors like Statoil, indicating that an undeniable wave of change is underway in the way the world thinks about energy.

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Recommended Lighting Practices Collaboration 0

FORT DAVIS, Texas — The University of Texas at Austin’s McDonald Observatory has collaborated with the Permian Basin Petroleum Association (PBPA) and the Texas Oil and Gas Association (TXOGA) to reduce light shining into the sky from drilling rigs and related activities in West Texas. The excess light has the potential to drown out the light from stars and galaxies and threatens to reduce the effectiveness of the observatory’s research telescopes to study the mysteries of the universe.

“This partnership of PBPA and TXOGA with McDonald Observatory to protect dark skies in its vicinity is vital to the research of the universe taking place at McDonald,” said Taft Armandroff, director of the observatory.

The collaboration’s Recommended Lighting Practices document details best lighting practices for drilling rigs and other oilfield structures, including what types of lighting work best and how to reduce glare and improve visibility. These practices will increase the amount of light shining down on worksites, thus increasing safety while decreasing the amount of light pollution in the sky. Reducing excess light helps the observatory and also decreases electricity costs for the oil and gas producers.

The document specifically targets oil and gas operations in the seven counties with existing outdoor lighting ordinances surrounding the McDonald Observatory: Brewster, Culberson, Hudspeth, Jeff Davis, Pecos, Presidio and Reeves. However, the recommendations can be beneficial across the industry.

A new video that helps to introduce the recommendations to oil and gas companies is now available. It features the observatory’s Bill Wren explaining the importance of dark skies, and how lighting practices can both preserve dark skies and improve safety for oilfield workers. The video was produced with the support of the Apache Corporation, following the company’s extensive collaboration with observatory staff and implementation of these practices with their assets in the area. It is available to watch and share at: https://youtu.be/UnmwnO6CIR4

“For years, the PBPA and the McDonald Observatory have worked together on educating members of the Permian Basin oil and gas community about the Dark Skies Initiative and the possible impact lighting practices can have on the observatory’s work,” said PBPA President Ben Shepperd. “About two years ago, the PBPA board of directors agreed to support the creation of lighting recommendations. We decided a great way to educate members of the industry on how they could provide a positive impact on this issue was through the utilization of such recommended practices.

“So we began work with the observatory to publish recommended lighting practices and have since worked to educate our members and those outside the oil and gas industry on the recommendations through presentations, seminars, articles in magazines and newspapers, and even one-on-one conversations,” Shepperd said.

Recently, the Texas Oil and Gas Association joined the collaboration.

“The Texas Oil and Gas Association recognizes that production practices and protecting the environment are in no way mutually exclusive,” TXOGA President Todd Staples said. “The Recommended Lighting Practices collaborative effort allows for the oil and natural gas industry to continue the work vital to our economy and our future, and for the simultaneous reduction to our ecological footprint.”

In April, the observatory’s Dark Skies Initiative was named one of six Texan by Nature Conservation Wrangler projects for 2018. Texan by Nature, a Texas-led conservation nonprofit founded by former first lady Laura Bush, brings business and conservation together through select programs that engage Texans in the stewardship of land and communities.

The award will provide the observatory connections to technical expertise, industry support, publicity, and more for its Dark Skies Initiative.

“Our Conservation Wrangler program recognizes innovative and transformative conservation projects across the state of Texas,” said Joni Carswell, the organization’s executive director. “Each Conservation Wrangler project positively impacts people, prosperity and natural resources.”

— END —

Media Contacts:
Rebecca Johnson, Communications Manager
McDonald Observatory
The University of Texas at Austin
512-475-6763

Stephen Robertson, Executive VP
Permian Basin Petroleum Association
432-684-6345

Kate Zaykowski, Communications Director
Texas Oil and Gas Association
325-660-2274

Taylor Keys, Program Manager
Texan by Nature
512-284-7482

Castlen Kennedy, VP of Public Affairs
Apache Corporation
713-296-7189

Case Study: Large E&P Operator in Permian Basin Uses ZerO2 to Reduce Emissions, Capture Full Value of Production Stream 0

Situation

A multinational exploration and production company with significant operations in the Permian Basin needed a solution to continue developing its oil and gas assets in compliance with stringent emissions standards and without increasing lease operating costs or reducing economic returns. The operator’s area of operation covers over 100,000 net acres reaching from the city of Midland in west Texas to the border of New Mexico. The company recently told the market it plans to invest heavily in the Permian Basin by 2020 to grow production significantly. To achieve its growth plan, the operator required a solution to proactively handle emissions of Volatile Organic Compounds (VOCs) from tank vapor gas and Nitrogen Oxides (NOx) produced when VOCs are burned using flares or combustors. Importantly, the solution needed to have a minimal impact on operating costs and not require significant capital investment.

Solution

The operator turned to EcoVapor for a solution to handle its emissions of VOCs and reduce or eliminate NOx while avoiding any adverse impact to operations, cash flow or financial returns. EcoVapor applied its ZerO2 oxygen removal technology in a staged rollout covering an initial five production pads. Born from EcoVapor’s proprietary vapor recovery technology, its patented ZerO2 systems offer operational flexibility, modularity, and reliability. ZerO2 units can be all-electric, using existing lease power or gensets, are skid mounted and have a small 4’x4’ footprint so they can be installed on any production pad. With no moving parts, ZerO2 units are extremely reliable.

The ZerO2 rollout proceeded as follows:

  • September 2017. Three ZerO2 units installed and run in parallel on the first production pad, handling over 1.0 MMcf per day of flash gas.

  • October 2017. Three more ZerO2 units installed on second production pad handling 800 Mcf per day of flash gas.

  • December 2017. Three additional ZerO2 units installed on third production pad handling an initial 750 Mcf per day. Additional development drilling and turning more wells to production increased production and in April 2018, two more ZerO2 units were installed to process flash gas volumes of up to 1.5 MMcf per day.

  • July 2018. Six ZerO2 units were installed on a fourth production pad with the capacity to process an expected 1.8 MMcf per day of flash gas.

 

Results

The ZerO2 solution gave the operator a scalable, efficient and reliable method to process rising flash gas volumes generated from the continued development of its Permian Basin asset position.

The multiple operational, economic and regulatory benefits of implementing the ZerO2 solution are summarized below:• Eliminate the flaring or combusting of flash gas by capturing 100% of tank vapors, as compared to typical efficiency levels of 80% for competing solutions.

  • Easily achieve compliance with current emissions standards and even more stringent regulations likely to be introduced by federal and state regulators in the future.

  •  Reduce Reid Vapor Pressure (RVP) by flashing gas at atmospheric pressure and capturing it before the oil is transported.

  • Generate incremental revenue and profits by capturing and selling rich, high-value tank vapor gas previously lost by flaring or combusting.

  • Improve the quality of sales gas by removing oxygen from the gas stream and ensuring consistent, ongoing production and revenue by avoiding the triggering of slam valve safeguards.

  • Maintain operational reliability by adopting the ZerO2 units, which have no moving parts and minimizes the impact on unexpected maintenance and repair costs.

This table summarizes the estimated emissions reductions based on installations made to date. Emissions reductions are estimated based on an 80% efficiency rate generally attributed to Vapor Recovery Tower technology. To put the impact of the total estimated emissions reductions in perspective, the reduction in VOC emissions is equivalent to
removing approximately over 28,000 passenger vehicles from the nation’s roads for a year, using per-vehicle estimates from the EPA’s publication Average Annual Emissions and Fuel Consumption for Gasoline-Fueled Passenger Cars and Light Trucks.

Based on the successful applications of the ZerO2 solution, the operator requested that EcoVapor design a larger unit to handle greater volumes of flash gas expected to be produced by its Permian Basin growth plan. These new units can each process 1.2 MMcfd and will be deployed in the second half of 2018.

Contact us today at 1.844.NOFLARE (844.663.5273) or Info@EcoVaporRS.com to see if ZerO2 is right for your operations and if you’re ready to Flare Less, Sell More.

Case Study Permian Basin

 

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