VAPOR RECOVERY – GET WHAT YOU PAY FOR

Posted by Pierozak, Gauthier & Wilson, Jeff on 03/06/2017

The value of your investment in a vapor recovery unit depends on uptime:  the percentage of time it is actually generating revenue.  If it is not working, you are losing revenue and incurring costs, some not always obvious.  Your return on investment is going south.

 As a leading provider of upstream tank vapor solutions, we at Cimarron Energy have noticed a wide variety of vapor recovery units across the country, many with mixed performance.  Downtime is lost revenue and increased costs.  When the VRU trips, there are service calls and repair costs.  Often overlooked are the additional consequences of this downtime. 

VRU Cimarron EnergyFlares, or additional combustors, must be ready to handle the sudden and significant increase in vapor volumes and pressure as well as the sudden vapor flashing as liquid volumes in the vapor tower are discharged to storage tanks.  There are costs in addition to lost revenue and safety consequences. Finally, uptime also impacts compliance with tank vapor emissions since emissions not routed to the VRU must be reduced by 95% with other control equipment.

Other than not performing routine maintenance, one of the more common operating challenges with vapor recovery units are liquids in the vapor stream.  Wet gas containing hydrocarbons and water fouls seals and valves in reciprocating and rotary vane compressors and often then damage internal components leading to VRU failure.  One effective solution to this problem is maintaining the discharge temperature above the water and hydrocarbon dew point.  Another problem is excessive vibration with reciprocating compressors and proper installation is critical.  Other compressor designs, such as screw compressors with only two major parts with a circular motion, avoid this type of operational issue.

To compound the challenges, upstream operating conditions change – it is part of the oilfield.  Production volumes, composition, temperatures all change over time and well “upset” conditions are part of oil and gas production.  This requires a vapor recovery unit that is field adaptable, where operating parameters such as recycle, suction and discharge pressures, discharge temperatures, and dew points can be flexibly changed by operators on site to match actual conditions. There are many types of vapor recovery units offered by a large number of compression and service companies, and “cost” can be deceiving.  

Monthly Revenue versus UptimeThe purpose of the device is to generate gas sales revenue, and a “low cost” choice can result in real under performance limiting your return on investment.  The chart relates monthly revenue to uptime for a site producing 100 mcfd of high Btu flash vapor.  Each 20% improvement in uptime generates an additional $4,000 per month.  This may not seem significant, but over the course of a year you are $50,000 ahead, ignoring the additional service costs of downtime and the operating and safety consequences with associated equipment.

Not all VRUs cost the same, but you get what you pay for.  More robust, flexible compressor skids may have a higher initial cost but performance dictates your return.  The chart below compares the cost of a $44,000 skid with 65% uptime and a $65,000 skid with 95% uptime – both with the potential to handle 100 mcfd.  We assumed installation cost was 50% of the skid price and 15% operating and maintenance costs for each.  Although the installed cost of the higher priced unit is 50% higher, the net cash generated by the two VRUs are breakeven in the fifth month and by the end of the first year the net cash from the “higher cost” skid is $50,000 better.  

Economics of VRU

This is not to say that costs do not matter, only that the real issue is which investment provides the higher cash flow and return on capital employed. And often enough, in traditional purchasing organizations, cost takes precedence over the prospect of cash flow generation, because this is how buyers’ performance is graded.  From our perspective, robust compressor skids with the ability to adapt its parameters to actual and changing field conditions is the better buy because not only does it makes using a VRU hassle free, the incremental price increase also pays for itself in a matter of a few weeks.

At Cimarron Energy, we are taking the claim that our VRUs can maintain a minimum of 95% uptime very seriously. We are committed to get you what you pay for: a hassle free, fully adaptable VRU unit, providing the high return on capital employed (ROCE) you are looking for while facilitating compliance with the new air emission rules.

About:

Founded in 1976, Cimarron Energy is a manufacturer of oil and natural gas production and processing equipment providing separation, flowback, and environmental products to exploration and production companies throughout the United States. Cimarron’s production and processing equipment is used to efficiently separate oil, natural gas, and water as well as other materials from hydrocarbon streams for transportation and sale. The company’s environmental devices provide high performance, cost effective and regulatory compliant solutions for emissions control. Cimarron operates from manufacturing facilities in Newcastle, OK; Marlow, OK; and Evans, CO. 

For more information, please visit us at www.cimarronenergy.com and our Cimarron Linkedin page.