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California EOR Project Tapping Sunshine to Reduce Costs

Aera Energy LLC, a partnership between units of Royal Dutch Shell plc and ExxonMobil Corp., is bidding to become the largest solar energy developer in California with 850 MW of capacity to create steam for an enhanced oil recovery (EOR) operation in the Belridge oilfield 40 miles west of Bakersfield.

Aera is working with privately held GlassPoint Solar, which specializes in oilfield solar applications using curved solar-collecting mirrors encased in standard agricultural glass greenhouses. No cost estimates were disclosed, but the project is said to be competitive with California natural gas prices.

When the project in Kern County starts up as envisioned in 2020, it would be the largest solar project in the state.

GlassPoint's John O'Donnell, vice president for business development, envisions a "vibrant future" of solar-assisted EOR in other California oilfields and perhaps the United States.

For now, the firm is focused on the global market, beginning with a 1,000 MW EOR-solar installation in Middle East oilfields in Oman.

The fact that the project could be economic in California’s low-priced natural gas environment is "a testament to the fact that we dramatically reduced the costs of our Middle East project, which is a much larger project," O'Donnell said. "All of these costs are down 55% from where they were at the pilot stage."

The cost reductions have allowed the company to be competitive.

"It was what we learned in the construction process over there that went into a next-generation design and changed assembly processes,” he said of the Oman project.

Plans call for replicating the Aera project with other operators in California, where half of the state's oil production, the third largest in the country, comes from steam injections.

"This project is just a fraction of the Belridge field, and we think other projects like this are viable and attractive at a number of California oilfields," he said.

GlassPoint expects to have all necessary permits from California regulators by next year for the solar thermal project and a smaller solar-photovoltaic (PV) installation to be sited on former oil producing acreage adjacent to the active Belridge oilfield.

The solar-thermal installation would be installed on about 640 acres, with 150 acres for the solar PV to provide all of the steam flood and wellsite electricity needs. Construction could begin in early 2019, with operation startup in 2020.

"Since this is a former oilfield production area, the solar projects are very land-efficient," O'Donnell toldNGI’sShale Daily on Wednesday.

When completed, the operation is expected to save Aera up to 5 Bcf/year and eliminate the production of 376,000 tons of carbon emissions, which could be used as credits in California’s cap-and-trade program.

"The primary energy used in Aera's EOR operations is 95% steam, and the rest goes for electricity in the oilfield," O'Donnell said.

A mix of U.S.- and foreign-produced components would be used in GlassPoint's system. Greenhouses are made by a U.S. agricultural industry supplier.

The current U.S. solar industry has concerns about new import taxes on foreign-produced solar components, but those would only apply to the PV installation, he said.

"Everyone in the solar industry is watching those developments pretty closely," O'Donnell said. "It applies to silicon PV systems, so that could affect our costs for the photovoltaic portion of our systems. We're watching and waiting to see how that all plays out."

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