TAQA Onshore B.V. Kruseman van Eltenweg 1, 1817 BC Alkmaar, The Netherlands P.O. Box 233, 1800 AE Alkmaar, The Netherlands T +31 88 8272 500 F +31 88 8272 898 www.taqaglobal.com Update Gas Storage Bergermeer operations - 16 May 2017 Gas Storage Bergermeer (GSB) is now in its second year of full operation. The withdrawal performance last winter was unfortunately not at optimum levels. With transparency at the forefront, TAQA has informed the 1 market of the causes of significant outages through letters published on its GSB website . However, as a result of a recurring theme in relation to GSB’s drying trains and associated heating elements, TAQA would like to update the market in more detail in relation to these current challenges. This document will cover the following topics: Technical processes explained (Q1 – Q3) Current challenges explained (Q4 – Q10) Impact on customers (Q11) Technical Processes Explained 1. How does the withdrawal process work at GSB? GSB stores gas in a depleted reservoir. If dry gas from the Dutch national grid is injected into the reservoir it mingles with small volumes of hydrocarbons and water that are present in the reservoir at three kilometers in depth. When gas is subsequently produced, it needs to be dried. This is done in two steps: i. First the gas goes through a slug catcher, separating the larger share of liquids and condensate from the gas. It then passes through scrubbers to remove condensed liquids from either free flow operation or compression. ii. The final liquids are then taken out by drying trains, after which the gas is within the required range of specifications to re-enter the Dutch grid. Please note a full reservoir does not need any compression to enter the Dutch grid (free flow). However, once reservoir pressure drops below a certain point, and depending on customer nominations, compression is needed to ensure sufficient high rates into the Dutch grid. 2. 1 What is a drying train? As mentioned above, the drying trains take out the final liquids from the gas before the gas enters the Dutch grid. GSB operates two drying trains, also called Dew Point Correction Units (DPCUs). www.gasstoragebergermeer.com/news-archive Registered in Alkmaar, The Netherlands Chamber of Commerce No. 27273134 VAT No. NL8140.79.386B01 Each DPCU at GSB has six 10-meter high towers filled with silica gel (see above aerial), which is a moisture-adsorbing substance. See below a schematic on the internal process. Wet gas enters these towers and is pushed through the silica gel which adsorbs any liquids present in the gas. The gas exits the towers in a dry state. After several drying cycles, the silica gel gets saturated. Once saturated it needs to be regenerated (see Q3). The design of GSB allows for such regeneration without discontinuing the process as four (out of six) towers per train are sufficient to allow maximum rates of withdrawal. This means two towers can be regenerated at all times. Once the silica gel is dry again, the regenerated towers can be taken online for the drying process and the next tower(s) can start the regeneration process. Registered in Alkmaar, The Netherlands Chamber of Commerce No. 27273134 VAT No. NL8140.79.532B01 3. How does the regeneration work? As mentioned above, once the silica gel in a tower is saturated it needs to be dried. This is done by heating the silica gel up to 270°C with a regeneration heater. The heater has two electrical bundles which use a resistive current to create heat within the gas flow. The hot gas is then routed through the saturated column to dry it out / regenerate it. Location of electrical bundles Electrical bundle in workplace Current Challenges Explained 4. What is causing the extended withdrawal outages since 2 March 2017? There are two issues with the heaters: occasional element failures of the actual bundles and electrical connector failures. TAQA is working with the manufacturer of the equipment to understand the root cause of the failures and carry out repairs and/or redesign to improve the reliability of the heater elements. 5. Are these new or recurring issues? We experienced some element failures last year but modifications were made during the summer to address this. It only emerged during the recent withdrawal period that these modifications were not sufficient to resolve the technical problems, as we experienced more failures. We have engaged the current supplier with a view to finding a more structural solution. Registered in Alkmaar, The Netherlands Chamber of Commerce No. 27273134 VAT No. NL8140.79.532B01 6. What has been done so far to solve the problem with these heating elements and why has it not been solved yet? A technical investigation has been conducted and the failures have been detailed with a corrective action proposed for each failure mode. The modification and delivery time is relatively long for these items, therefore temporary solutions have been utilized where necessary. 7. What is the forward plan to ensure a stable withdrawal process? TAQA is looking at structural solutions which will address the current challenges. This could be in the form of modifications to the existing equipment and installations, or a full replacement of any equipment that cannot be assured to be reliable for the next 25 years. 8. What is causing the problems in relation to the current limited injection capacity? 2 As communicated via https://agsi.gie.eu/#/unavailability, GSB currently has a 30% curtailment on its injection capacity. This is related to issues with GSB’s compressors. GSB has six 12 MW electrically driven, magnetic bearing compressors. Three of the six compressors are currently in operation and the other three are currently in maintenance or repair. One compressor has a variable speed drive fault, while the other two are out for a longer period as their motors need replacement due to drive motor electrical faults. The exact cause is being investigated with the compressor manufacturer. 9. How (much) are the compressors used during the injection- and withdrawal cycle? On the injection side, compression is required over the full range of the injection curve to allow gas injection into the reservoir. Depending on reservoir pressure (which can be between an average pressure of 77-133 bar), national grid pressure (50-65 bar) and total customer nominations, the asset determines how much compressors are required to meet contractual commitments. Please note the GSB facility is designed with extra compressor capacity such that the highest injection capacity demand can be met with five compressors. This allows the facility to always have flexible maintenance on at least one compressor, which in turn increases long term availability. On the withdrawal side, compression is only required at the back end of the withdrawal curve when reservoir pressure is relatively low. The initial part of withdrawal with high reservoir pressure is performed via free flow, as the reservoir pressure is high enough to enter the grid without assistance. Once the reservoir pressure approaches approximately 40% fullness, and depending on customer nominations, compression is also required for withdrawal. Even in the case with highest capacity demand, five compressors can meet maximum customer nominations. 2 5.5 GW on total of 18 GW contractual injection rights . Registered in Alkmaar, The Netherlands Chamber of Commerce No. 27273134 VAT No. NL8140.79.532B01 Compressor area where 6 compressors of 12 MW each are located (logo of manufacturer hidden on purpose). 10. What is the forward plan for the compressors? nd The fourth compressor is expected to be back in operation during the week of 22 May. The fifth compressor is expected to be operational mid-July and the sixth compressor is expected to be available early September. Impact on Customers 11. How do these technical challenges impact customers? GSB continues to publish technical unavailability as per REMIT obligations at http://www.gasstoragebergermeer.com/remit/ and https://agsi.gie.eu/#/unavailability. Technical unavailabilities do not necessarily equate to contractual availabilities. As an example, as per 16 May 2017 with current reservoir fullness of about 33%, customer nominations of 5 GW can be met with one compressor, 9 GW with two and 12,5 GW with three. Contractual injection rights at 33% fullness are about 18 GW, hence the 5,5 GW physical curtailment shown at https://agsi.gie.eu/#/unavailability. Based on past actual usage of these contractual rights, forecast of future rights and available alternative measures to satisfy customer requests, GSB can opt to either keep customers whole or (partly) curtail contractually. Without giving any guarantees, and based on current variables, three compressors currently do not curtail customers contractual rights. This scenario equals the 133 GWh/d unavailable withdrawal shown on REMIT as per 16 May 2017. Registered in Alkmaar, The Netherlands Chamber of Commerce No. 27273134 VAT No. NL8140.79.532B01
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