PLANT REPLACEMENT KEY TO LOUISIANA FIELD REVIVAL

Chris Van Way
JP Oil Co.
Lafayette, La.

Production at a southern Louisiana field and gas plant nearly tripled in its first year of operation after being purchased and retrofitted by a small independent operator.

In little more than a year of ownership, JP Oil Co., Lafayette, La., has increased plant production at the Krotz Springs field to 5 MMcfd of residue gas, 500 b/d condensate, and 10,000 gpd LPG from previous production of 1.8 MMcfd, 180 b/d of condensate, and 3,500 gpd of LPG (Fig. 1).

Before JP Oil's 1992 purchase from Chevron U.S.A. Inc., the field had produced nearly 1.3 tcf of gas and 50 million bbl of oil and condensate from multiple frio gas sands.

One key to JP Oil's success at Krotz Springs was replacing Chevron's older, larger lean oil absorption plant with a modernized, smaller refrigeration plant.

The installed plant required less space (1/4 acre) and essentially no manpower (unattended with safety call out system).

JP Oil's new plant is currently running at 50% of its 10 MMcfd inlet capacity, with plans to expand to 100% following further development of the field, including drilling and recompletion.

Currently, 13 wells are producing and 17 wells are shut-in but have recompletion possibilities. JP Oil plans to work over 3-5 wells in 1994.

The company drilled one dry hole and one good producer in 1993 and plans for 1994 are to drill two wells.

The new plant consumes 50 Mcfd of fuel, only 10% of its predecessor's fuel consumption, and is recovering LPG slightly better than initial simulations projected (1.8 gpm projected; 2 gpm actual).

Additionally, initial plant inlet volume is also higher than anticipated (3 MMcfd projected, 5 MMcfd actual).

PURCHASING STRATEGIES

Chevron has been a net seller of U.S. producing leases as part of a company-wide restructuring since 1984. The divestment program has included selling small or marginal properties and fine tuning operations in strategic basins.

The Krotz Springs property and plant is situated on 3 acres; originally, plant capacity had been 100 MMcfd with a 36-mile gathering system.

The plant itself is in St. Landry Parish, 5 miles south of Krotz Springs and 25 miles northeast of Lafayette. The Krotz Springs gas gathering system covers a 6,500-acre area surrounding the plant.

JP Oil could have sold the gas unprocessed but saw better profits if a more efficient gas plant were installed: a plant that would require less fuel, electricity, maintenance, and manpower.

Buying a new plant would create scheduling delays caused by waits for key component parts; thus JP Oil pursued a suitable used plant. With the abundance of used plants on the market, the company felt a good used one could be found at an attractive price and therefore enhance the project's economics.

In looking for a gas plant, JP Oil took recommendations from plant operators within the company, made contacts with majors and some brokers, and found a plant that fit JP Oil's needs both economically and operationally.

At the time JP Oil bought the field, Chevron had shut down most of the fractionation at the plant. Chevron was producing a raw-mix product and shipping it by truck.

PLANT CHOICE

JP Oil's first choice for a plant was a turboexpander or cryogenic plant to obtain higher liquids recovery. The absence of a pipeline for the high-pressure vapor product and time pressures caused by permitting caused this approach to be dropped.

Although a 6-in. propane pipeline is connected to the field, tying it into the nearest available LPG pipeline 4 miles away would have caused delays in satisfying requirements of the U.S. Army Corps. of Engineers, U.S. Department of Transportation, and Louisiana's Department of Environmental Quality.

JP Oil's second choice, therefore, was a straight refrigeration plant: more specifically, a plant with propane refrigerant and a natural gas-fueled engine as the prime mover (Fig. 2).

A freon refrigeration plant was not considered because of increasing environmental restrictions and the cost of using freon.

An additional problem was that many of the plants JP Oil visited were not skid-mounted and, despite being close to the Krotz Springs field, did not lend themselves to a timely or cost-effective relocation.

JP Oil began its search in April 1992. Within 1 month, four candidates were identified after on-site visits.

One plant had an obsolete refrigeration compressor. A second had an integral refrigeration compressor too expensive to move. A third plant was too expensive.

JP Oil, however, found a 10-MMcfd plant near Beeville, Tex., owned by Texaco Exploration & Production Inc.

It was skid-mounted and had most of the systems the operator would need. JP Oil representatives visited the plant to determine its condition and the best layout of the plant at its new site.

The Texaco plant had been purchased by Getty in 1983 and shut down in 1988. Its design pressure was 1,000 psi and design temperature -400 F. The refrigeration compressor and driver (prime mover) were late model and appeared to be in good shape (Fig. 3).

Overall, the plant had been well maintained in an old compressor building which prevented it from being affected by outside elements. All the vessels, piping, and controls were free of rust and corrosion.

In May 1992, JP Oil negotiated the purchase of the plant and moved it to Krotz Spring.

PLANT MOVING, RENOVATION

JP Oil only had 4 weeks for relocation because Texaco had sold the field where the plant was located and JP Oil did not take on any environmental liability of cleaning up Texaco's field.

The Chevron plant was a 1950s vintage installation on 3 acres and consisted of the following:

6,000 hp of compression. Chevron's integral compressors were old, poorly maintained, and unusable.
A lean-oil absorption and fractionation facility
A substantial boiler plant
Feed-water treating
A large cooling-water system
Aboveground product storage for 20,000 bbl of butane, 10,000 bbl of propane, and 20,000 bbl of natural gasoline

In spite of its age, the existing facility achieved reasonable liquid-recovery levels but at the expense of excessive manpower (three, three-man shifts/week) and utilities (500 Mcfd of fuel).

At one time Chevron had a full fractionation plant for propane, butane, and natural gasoline.

By the time JP Oil purchased the property and plant, the only tower used was for depropanization.

Pure propane was sold to Dixie's pipeline system. The remaining mix was being trucked to Mont Belvieu for sale.

One of JP Oil's most important goals was to ensure that plant construction work be carried out safely while reducing interference with Chevron's dismantling activities.

The team designing the new plant was from JP Oil and Hamilton Engineering. To retain familiarity with the plant for reassembly and to save on insurance, JP Oil used its own six-man crew to dismantle and reassemble the Texaco plant.

Besides the gas plant, JP Oil also purchased from Texaco a glycol-regeneration system, a shutdown panel for the compressor, and the plant building.

The ethylene glycol-regeneration skid and the triethylene-glycol burning skid were remotely situated at the Texaco site because of space restraints.

At the Krotz Springs site, plans called for all the skids to be situated in one area because Chevron's old plant had not been dismantled (Fig. 4).

JP Oil relocated the building which housed the plant because it had to be removed anyway and to relocate and erect it would add little to the cost of the project.

SAFETY; PROBLEMS

Once the new plant was on location, all safety valves were removed, tested, and replaced, if necessary. Because moving the existing interconnecting piping was too costly, new piping was installed and insulated.

Shutdown panels were set up to monitor jacket-water temperature, oil pressure and temperature, and discharge temperature from each cylinder, and to provide automatic shutdown and call out for upsets.

The call out system tied to all safety shutdowns saved manpower as well as provided safety.

The field production operator was also trained in plant operations so that in a call out, the same operator was available.

Environmentally, JP Oil wanted a plant with low emissions. Louisiana's Department of Environmental Quality requires the condenser on the glycol dehydrator to eliminate emissions.

The plant is on a concrete slab with a concrete retaining wall and central sump system in event of engine oil or glycol leak (Fig. 4).

Planning and testing prevented major problems during the relocation or on the location itself.

Heavy rains in south Louisiana during May 1992 made for poor site and road conditions and caused problems in moving the plant off location in Texas and on site in Louisiana.

Texaco provided "as-built" blueprints of the plant which helped JP Oil's crew both dismantle and reassemble it.

Additionally, JP Oil's mechanics performed the following:

Inspected compressor and engine components and replaced worn parts before start up
Inspected all control valves, repairing or replacing problem valves
Cleaned all pipes of debris and sludge before assembly
Checked all electric motors and repaired as needed
Inspected all pumps and changed packings.

Although the previous plant had extensive underground piping, JP Oil installed all piping aboveground. This eliminated the necessity of digging up old lines before installing new ones and for hookup to a cryogenic plant in the future.

Because of the cost effectiveness of buying a skid-mounted plant, JP Oil now has the flexibility to move the plant to another field should a pipeline become available and therefore make a cryogenic plant economical.