General Interest Ecuador advances key petroleum projects

Ecuador is pushing upstream and downstream petroleum projects expected to play key roles in the country's medium range energy plans.

Perhaps most important, state owned Petroleos del Ecuador (Petro- ecuador) has agreed to fund an expansion of the trans-Ecuador crude oil trunk line. Engineering studies are nearly complete for a $150 million project to boost the line's capacity to as much as 410,000 b/d by April 1997, says Jorge Pareja, Ecuador's energy and mines minister and chairman of Petroecuador's board.

Running 309 miles from Lago Agrio over the Andes Mountains to an oil terminal at Balao, the pipeline is Ecuador's main link to oil export markets.

In addition, Pareja says, government officials in London early this month will launch a bidding round for the Ishpingo-Tambococha-Tiputini-Imuya (ITTI) heavy oil project. Site is to be on a 67.6 sq mile tract in the Oriente basin south of Rio Napo on the Amazonian slope of the Andes Mountains. The ministry proposes a 25 year, $693 million program that could recover as much as 700 million bbl of 14-16 gravity crude.

Eighth round

Meantime, Petroecuador is on target to close its eighth exploration bidding round Mar. 15. Officials expect to assign four or five of the nine 424,200 acre tracts on offer. More than 15 companies reportedly have expressed interest in the acreage.

Pareja says companies seeking eighth round tracts could sign production sharing contracts as early as July under terms offered in 1994 in Petro- ecuador's seventh exploration round.

Ecuador also is advancing these energy programs:

More than 30 companies are seeking to prequalify for an upcoming bidding round for a series of marginal fields in the Amazon region. Officials hope to award about 10 tracts.
Ecuadorian officials are studying a proposal to use 9,000 b/d of resid produced by the Oriente refinery to generate electrical power. About 300,000 kw of power could be generated through the plan, with 100,000 kw to serve local petroleum and industrial markets and 200,000 kw for distribution through Ecuador's power grid.
Officials also are developing a concept under which an estimated 7 billion bbl of 4 gravity crude in the Pungarayacu area south of Gran Sumaco national park would be developed, also to generate power.

Trunk line expansion

The trans-Ecuador pipeline at yearend 1995 was moving about 330,000 b/d of oil from Lago Agrio field to the Balao export terminal.

The plan to boost capacity to as much as 410,000 b/d on some parts of the trunk line is the first of three expansion phases.

Petroecuador intends to increase trunk line capacity between Lago Agrio and Baeza to 380,000 b/d by adding pump horsepower and injecting friction reducing agents at three points along the line. The company also plans to lay loops of 18, 20, and 22 in. at four points on the line.

At Lago Agrio pump station, the company will install a 3,500 hp main pump, three 650 hp booster pumps, and one 350 hp booster pump.

A 2,500 hp pump is to be installed on the pipeline spur moving crude into the trans-Andean pipeline at San Miguel, Colombia. Petroecuador also plans to install three 2,500 hp main pumps at trans-Ecuador's Lumbaqui station and three 1,850 hp pumps at the Salado station.

Capacity is to rise to 410,000 b/d from Baeza-where 30,000 b/d of crude enters the trans-Ecuador pipeline through the Villano-Condijua pipeline spur-to the Balao tank farm and terminal.

Petroecuador will add three 2,800 hp pumps each at Baeza and Papallacta to increase shipments over the crest of the Andes. Crews also will change out valves at San Juan, Chiriboga, La Palma, and Santo Domingo pressure reduction stations.

Expansion plans in addition call for:

Adding significant storage capacity at the Lago Agrio and Balao tank farms.
Upgrading Balao terminal's monobuoys to handle tankers as large as 250,000 dwt.
Laying 8 in. and 20 in. pipelines to the Esmeraldas refinery.

In later expansion phases, Petroecuador envisions private parties laying a 120,000 b/d Lago Agrio-Balao crude line parallel to the trans-Ecuador line, then owning and operating the system. Design of the parallel line would allow expansion to 180,000 b/d with more pump horsepower.

The multiphase expansion plus capacity through Colombia on the trans-Andean pipeline would enable producers in Ecuador to sell as much as 530,000 b/d of crude into export markets.

ITTI overview

Pareja says about 20 companies are seeking to prequalify to submit bids about mid-July to develop the four heavy oil fields included in the ITTI project.

Officials envision the company or group awarded the project operating under a production sharing agreement with the government's Petroproduccion unit.

Petroecuador plans to evaluate bids during the remainder of July, negotiate contracts during August-October, and begin signing contracts on the project as early as November 1996.

Main components in Petroecuador's proposed work program include:

Surface facilities designed to process 130,000 b/d of oil and 450,000 b/d of produced water.
About 22 miles of 24 in. and 30 in. multiphase production pipeline from well pads to a central processing facility (CPF) at Tiputini.
The same lengths of 24 in. and 30 in. line to transport water from the Tiputini CPF to reinjection wells to be drilled on the western flank of the fields.
102 miles of 24 in. pipeline between Tiputini and Shushufindi field, including a crossing at Rio Napo.

Spending for major ITTI components includes about $26 million for appraisal drilling, $230 million to drill development wells, $63 million for gathering and infield distribution pipelines, $127 million for the Tiputini CPF, and $101 million for the Tiputini-Shushufindi pipeline.

Petroecuador's development plan includes more than 140 production wells and 17 water injection wells. Developers must cluster ITTI production wells on 20 pads to minimize environmental damage. Petroecuador will require deforestation caused by the project to be less than 15 acres for each dozen wells.

Based on preliminary estimates, officials estimate the proposed development program could recover as much as:

515 million bbl of crude from more than 2.2 billion bbl of oil in place at Ishpingo field.
38 million bbl from 147 million bbl in place at Tambococha.
12 million bbl from 84 million bbl in place at Tiputini.

Recovery of unproved reserves in the three fields could push recovery to more than 700 million bbl. In addition, unproved reserves in Imuya field are estimated at 743 million bbl.