California-based GlassPoint Solar Inc. looks all set with its first solar crude extraction plant in Oman, and the success is likely to lead to further operations in the Middle Eastern region.
The facility, which produces some 50 metric tons of steam per day for injection into Oman’s Amal oilfield, is a 7-megawatt installation. This solar-powered enhanced oil recovery facility is part of a recent shift in thinking on part of energy companies.
Conventionally, natural gas is used to produce the steam that is then injected into hard-to-extract oil reserves. Oman, for example, uses nearly 22 percent of all its natural gas for steam production purposes.
However, the use of solar power certainly offsets the total carbon footprint of such oil extraction operations, and it earns energy companies a good bit of credibility with environmental agencies.
The GlassPoint success (the facility actually generates almost 10 percent more steam than originally planned) has reflected well on the company. Last December, the company had stated that it received funding from several big companies, including Royal Dutch Shell Corp. (NYSE: RDS-A). The company has, so far, accumulated about $32 million in funding.
Middle Eastern Oil Extraction
Bloomberg reports that the company intends to expand its footprint in Kuwait and Bahrain. GlassPoint’s Oman project was carried out in partnership with the nation’s biggest oil and gas producer, Petroleum Development Oman. Nearly 40 percent of all material was locally sourced, and the project reached completion well ahead of time and below budget.
From GlassPoint’s press release:
“PDO has successfully extended the life of its heavy oil assets by deploying innovative EOR technologies over the past few decades, said Raoul Restucci, Managing Director of PDO. “The GlassPoint system is proving it can reliably burn thermal EOR with solar power while reducing the need to burn natural gas. This solar EOR solution provides for an economically viable and environmentally sustainable long term resource to develop Oman’s heavy oil portfolio, while saving valuable natural gas resources for use in other gas-dependent industries.”
GlassPoint’s facility is the first of its kind in the Middle East, and it is actually of great benefit to Oman. Unlike other Middle Eastern oil-rich nations, Oman doesn’t have comparable reserves – and what it has began going into decline nearly a decade ago. Between inadequate reserves and those reserves located in hard-to-reach strata, steam injection has emerged as the best solution. Hence Oman uses more than 20 percent of its natural gas for this purpose.
Yet even that has its problems; Oman doesn’t possess extensive domestic reserves, and import costs are steep. That’s why Oman sought to exploit what it does have in abundance: solar energy.
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Solar Companies Work with Conventional Fuel Operators
There are implications within the U.S. for GlassPoint’s success over in the Middle East. California, for example, has mandated that oil companies slash greenhouse emissions proportional to the fuel sold. It’s caused some backlash from energy companies, but GlassPoint’s technology could step in quite usefully.
To wit, the company’s system would reduce the amount of natural gas that’s used to produce steam, leading to a net drop in the volume of emissions. And since GlassPoint is based in Fremont, CA, it seems natural to expect the company will set up similar systems in that state in the near future.
Indeed, the company already has one such system – albeit on a much smaller scale – active in Kern County. The technology essentially uses a series of mirrors that focus solar energy onto pipes. These pipes are painted with an absorbent black paint, which helps heat the water being produced alongside oil. It’s simple, it’s cheap, and apparently it’s also very effective.
For GlassPoint, the Middle East chapter may only just have begun. As mentioned earlier, Shell is among the believers in GlassPoint’s solar innovation. Aside from that, Chevron Corp. (NYSE: CVX) and Occidental Corp. (NYSE: OXY) are also active in Kuwait and Bahrain.
Considering that GlassPoint has targeted those two nations’ oilfields for future development, it’s reasonable to surmise that GlassPoint may have much to offer those two oil majors. Both companies are active in the two nations, working to extract heavy crude. They’re also nations with an abundance of sunlight, and GlassPoint’s system could certainly make a difference.
We should expect to see a growing inter-relationship between solar companies and oil and gas companies, with these sort of hybrid systems gaining popularity in the near future.
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