Rod MacGregor, president and CEO of GlassPoint Solar tells Pipeline Magazine about the firm’s growing success in Oman with its solar EOR technology and how they can help Oman secure more gas
Pipeline Magazine: What is the latest status of the ‘Miraah’ solar project?
We’ve been moving forward quickly on Miraah since we announced the deal with PDO last summer. In November, we broke ground ahead of schedule and just recently completed the site preparations and grading where the first glasshouses will be constructed.
This plot of land spans more than 300,000 square meters. A jog around the perimeter is about 2 km. We’re now starting on the foundation work, and will be drilling 5,000 holes for the support beams for the glasshouse structures. We continue to press forward ahead of schedule and are on track to produce first steam in 2017.
PM: What are the main hurdles you face in creating a commercial-scale solar plant?
GlassPoint’s technology is deployed in standard blocks, which overcome many of the challenges companies face when deploying large scale projects. Rather than building a larger glasshouse, we simply build more copies of the same thing. Our standard blocks can be replicated from one to several hundred, which allows for more flexible siting and faster deployment times.
We’ve adopted a “production line” approach for building Miraah, a successful method applied by the oil and gas industry for large-scale drilling projects. The construction process is broken into standard steps and then executed in a continuous sequence. Specialised teams move from block to block completing a specific task then relocating to the next. For example, one team is solely responsible for glazing the glasshouse, whereas another team is skilled in mirror installation. Each stage of the process optimises expertise to speed deployment, control costs and ensure consistent quality.
Sourcing specialised materials can also lead to solar project delays, but because we use mass-manufactured components produced all over the world we’ve been able to successfully reduce our ramp-up period for Miraah. This also helps us achieve economies of scale early on and reduce costs.
Another common challenge as companies grow to execute large projects is finding a team with the right expertise. Fortunately, Oman has fantastic talent, and we’ve put together a very strong team with experience in heavy oil, project execution and technology development. Since announcing the project in July, we’ve grown our local team significantly and are proud to have achieved over 50 per cent Omanisation in record time.
On the technical side, one of the main challenges of deploying solar in the Middle East has been dust and sand that is common throughout the region. In this desert environment, daily washing is required. For a project the size of Miraah, it is both impractical and cost prohibitive to rely on manual cleaning labour. That’s one of the reasons we brought the solar collectors inside a glasshouse and use an automated washing robot that runs each night to keep the glass clean.
The glasshouse enclosure also allowed us to avoid many of the high costs associated with traditional solar thermal technologies designed for electricity generation. For example, the foundations for exposed solar collectors require expensive steel and concrete structures to withstand peak wind loads. In our enclosed trough design, only the outside glasshouse wall needs to be reinforced against the wind. As a result, we use much less material than older solar designs, reducing the capital cost of our system.
ASK: Why do you feel it is such an important project for Oman’s oil and gas industry?
Oman is widely recognised as the regional leader in oil and gas innovation. Now, it is the first country in the world to realise the value of deploying solar energy to maximise its oil and gas resources. Miraah is not a small side project, PDO is deploying solar at an unprecedented scale. Once complete, Miraah will be among the world’s largest solar plants of any kind. This is a testament to PDO’s leadership and commitment to technological advancement.
Today, more than 20 per cent of Oman’s gas is consumed at the oilfield. The upstream use of gas will continue to increase as Oman develops more of its heavy oil fields and deploys more EOR. Solar is a long-term solution to achieve their energy and economic diversification goals.
When Miraah is complete it will generate an average of 6,000 tons of solar steam daily for oil production, saving 5.6 trillion BTUs of natural gas each year. The saved gas can be exported generating new revenue for the country or used to fuel higher value applications. More gas is needed for water desalination, power generation and feedstock for new industries ranging from petrochemicals to building materials. If more gas was available, then new industries can be created. Each new factory would have its own direct employees and its own supply chain, which would in turn generate employment and increased economic activity. This will support the country’s efforts to diversify and grow the economy.
Take power generation as an example. The gas saved by Miraah could provide residential electricity to a small town of 209,000 people in Oman. Of course, the importance of solar cannot be discussed without looking at the environmental benefits associated with harnessing the sun’s energy instead of burning fuel. Miraah will reduce CO2 emissions by over 300,000 tons annually, which is equivalent to taking 63,000 cars off the road permanently.
Miraah also has the potential to generate significant value for Oman by creating new opportunities in supply chain development, manufacturing capability, and employment and training. Experience with solar EOR will eventually transfer to other energy-related sectors.
GlassPoint’s vision is to create a world-class solar energy industry in Oman building on its already successful oil and gas energy business. We believe this is just the beginning of a long and fruitful partnership with Oman.
PM: How critical has PDO’s and Shell backing being throughout the process?
PDO and Shell have impeccable technical credibility, so being chosen by them for a project of this scale has made it much easier for us to partner with other players in the industry. Our projects in Oman and California have established us as the leader in solar for the oil and gas industry.
PDO is widely recognised as the EOR pioneer throughout the Middle East. They realised early on that solar can have a significant impact in the way it recovers Oman’s heavy oil resources. This led to building the Middle East’s first solar EOR pilot in 2012, which successfully proved that solar can provide a reliable alternative to gas to generate steam. Oil companies throughout the world followed the progress of the pilot closely to see if PDO would move forward with a full-scale project. And here we are today, building one of the largest solar plants in history together.
Shell’s backing has been equally important. Shell has tremendous experience in developing heavy oil projects around the world. They not only supported GlassPoint financially through participating in two rounds of investments, but they continue to provide their technical expertise and support as we expand into new markets.
GlassPoint also counts Total and Kuwait Petroleum Corporation (KPC) among its indirect investors. They too provide access and support as we grow our global operations.
PM: What has the success of GlassPoint in Oman meant for opportunities to bring solar EOR to other countries in the region?
Our success in Oman proved that GlassPoint’s solar EOR solution thrives in desert environments. It provides reliable steam for thermal EOR, and enables oil producers to recover heavy oil resources economically and responsibly. Solar can reduce gas used at a heavy oil field by up to 80 per cent, redirecting gas to higher value applications.
As oilfields within the region age, they too will require enhanced oil recovery techniques to support production. Solar powered oil production is a compelling alternative in any country producing heavy oil, that has limited natural gas resources, but enjoys abundant sunshine.
Kuwait has plans to deploy some of the largest steam flood projects in the world, but unlike Oman, Kuwait does not produce a significant amount of gas and will have to import LNG to fuel its heavy oil operations. Solar can provide the vast majority of these needs for less cost than fuel-fired steam.
Additional markets that could benefit from solar steam deployment include Bahrain, Saudi Arabia, Western China, and Venezuela.
PM: How has your business been affected by low oil price?
Low oil prices actually help our business. When oil prices are high, oil companies focus on increasing production. When prices are low, the focus is on cost reduction. Considering that 60 per cent of the costs of operating a heavy oilfield is fuel purchase for EOR steam generation, this is a major opportunity for cost reduction. GlassPoint delivers steam for less cost than steam produced by burning natural gas. This means that there is no better time than now to deploy solar EOR and reduce the cost of producing heavy oil.
Heavy oil represents about two-thirds of todays’ remaining oil resources, so we know that EOR will be an increasingly important part of the oil production mix.
Most of Oman’s oil reserves are heavy and the country will need to deploy more EOR projects to meet its current and future production targets. Solar has proven its ability to help Oman recover its oil sustainably and save valuable gas resources that can support economic growth and diversification.
I attended CERAWeek in Houston, where H.E. Mohammed Al Rumhy said, “you can never have enough gas.” That is something we can help with. By using less gas in oilfields there will be more for feedstock for industrial development electricity generation and other high value uses.
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