Individual Wellhead Processing OR A Central Processing Facility

[Berenger]

Hey all, my question is quite straightforward - what determines if a company chooses to build wellhead processing units at each site versus gathering and sending the gas, oil and water to a central processing facility? I have worked both types of project recently but a client asked me, and the only reasons I could think of is economics and gas compositions. Are these the only 2 reasons? Can anyone enlighten me on the decision process? Thanks.

[gtaa]

Like any engineering decision, it is made on the balance of trade-offs. These will include:

CAPEX
OPEX
Land availability
Permits
Safety
Stream compositions
Location (if 1000's of km then a huge pipeline would be required)

[reservoirengineer]

It depends, which own the infrastructures (Processing facilities, pipelines)? If it is owned by your company, you may have favorable processing tariff ($/bbl or $/MMCF) while if it is owned by some other companies you will have to deal with them. In that case, it may be more economic to build your own facilities. It all come down to the reserves. If it is marginal, you might not want to build a processing facilities while if it is billion bbls or multi TCF field, you will definitely need facilities to KO water if it is gas and remove inert gases if it is gas. If it is crude oil, you will also have to maintain crude oil spec by processing them.

Hey all, my question is quite straightforward - what determines if a company chooses to build wellhead processing units at each site versus gathering and sending the gas, oil and water to a central processing facility? I have worked both types of project recently but a client asked me, and the only reasons I could think of is economics and gas compositions. Are these the only 2 reasons? Can anyone enlighten me on the decision process? Thanks.

[reservoirengineer]

It depends, which own the infrastructures (Processing facilities, pipelines)? If it is owned by your company, you may have favorable processing tariff ($/bbl or $/MMCF) while if it is owned by some other companies you will have to deal with them. In that case, it may be more economic to build your own facilities. It all come down to the reserves. If it is marginal, you might not want to build a processing facilities while if it is billion bbls or multi TCF field, you will definitely need facilities to KO water if it is gas and remove inert gases if it is gas. If it is crude oil, you will also have to maintain crude oil spec by processing them.

Hey all, my question is quite straightforward - what determines if a company chooses to build wellhead processing units at each site versus gathering and sending the gas, oil and water to a central processing facility? I have worked both types of project recently but a client asked me, and the only reasons I could think of is economics and gas compositions. Are these the only 2 reasons? Can anyone enlighten me on the decision process? Thanks.

[Javarga5691]

I would say centralized processing systems typically provide better economics to indovidual facilities; less CAPEX and unit OPEX. Technical aspects may compell though setting up wellhead or cluster processing units, maybe with basic functions only; e.g. removal of bulk water, primary separation, dehydration, heating, metering.
It is also the economics and the risk management aspects which may justify individual production facilities to achieve early production (and profit) and address initial uncertainties in reserves volumes (gradual development approach).

[Javarga5691]

I would say centralized processing systems typically provide better economics to indovidual facilities; less CAPEX and unit OPEX. Technical aspects may compell though setting up wellhead or cluster processing units, maybe with basic functions only; e.g. removal of bulk water, primary separation, dehydration, heating, metering.
It is also the economics and the risk management aspects which may justify individual production facilities to achieve early production (and profit) and address initial uncertainties in reserves volumes (gradual development approach).