Miraah will be one of the largest solar plants ever built: Rod MacGregor

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‘Solar EOR offers a compelling economic solution to any country producing heavy oil that has limited natural gas resources but enjoys abundant sunshine,’ says Rod MacGregor, President and CEO, GlassPoint Solar. Excerpts of an interview with him:

What are the key features of Miraah project? What is the current status? 

Miraah, which we are building for our partner Petroleum Development Oman (PDO), will be one of the largest solar plants ever built in history. The 1GW solar thermal project will harness the sun’s clean energy to produce steam used in thermal Enhanced Oil Recovery (EOR) at the Amal oilfield in South Oman. The steam Miraah will produce will provide a significant portion of the field’s requirements, which will reduce PDO’s reliance on using natural gas to generate steam. Once Miraah is completed, it will take an average of 6,000 tons of water daily and convert it into steam for oil production. This will save 5.6 trillion British Thermal Units (BTUs) of natural gas each year, the equivalent of the amount of gas that could be used to provide residential electricity to 209,000 people in Oman. The project is also expected to reduce CO2 emissions by over 300,000 tons annually which corresponds to taking 63,000 cars off the road permanently. And this is only one project – Imagine what could be done by deploying similar projects all over the world.

Work on Miraah has been progressing well since the project was announced last summer. We successfully broke ground in November and recently completed site grading three months ahead of schedule. Miraah’s glasshouses will be built in modular format, which enables us to construct them quickly. We are on track to produce steam from the first glasshouse in 2017. Upon completion, the site will be huge and the total project area will span three-square kilometres, an area equivalent to more than 360 football pitches. We’re now starting on the foundation work, and will be drilling 5,000 holes for the support beams for the glasshouse structures.

Has there been any delay/change to the project as a result of the low oil price environment? Do you think the project remains commercially feasible despite the expected low oil prices in the coming years?  

The project plan has not changed. In fact, Miraah is already ahead of schedule. We have completed the site grading along with our partners with zero Lost Time Injuries. People might assume that a project such as Miraah is no longer feasible in light of low oil prices, but on the contrary, low oil prices triggers oil producers to look for cheaper means to generate the energy they need to fuel their own operations. That’s exactly what GlassPoint offers.

When oil prices are high, producers pay less attention to operating costs and more on increasing production. Whereas in times of lower oil prices such as those we are experiencing today, oil companies worldwide are looking at lowering production costs. In a typical heavy oil field, fuel purchase for steam generation makes up 60 per cent of the operating cost of the field. By deploying solar, operators can reduce their gas consumption by up to 80 per cent, substantially reducing operating cost. The gas saved can be exported as LNG generating new revenue or used for power generation or feedstock for new industries, which would further stimulate the economy and generate jobs. There is truly no better time for solar and oil to work together to reduce costs and achieve long-term energy goals.

What are the timelines for the project’s execution?

Miraah is currently ahead of its construction schedule, with steam from the first glasshouse expected in 2017. Full completion will come in the years that follow in line with PDO’s field developments and Amal steam requirements.

What are the expected ICV benefits that Miraah offers to Oman?

Miraah has the potential to generate significant value for Oman, creating new opportunities in supply chain development, manufacturing capability, employment and training. GlassPoint steam generators are made of raw materials readily available in the Sultanate, including aluminium and steel, allowing almost 80 per cent of the supply chain to be sourced locally.

Developing a local Omani workforce and job opportunities for local contractors and small business is part of GlassPoint’s and PDO’s commitment to In-Country Value (ICV). Miraah’s site grading was performed by a Local Community Contractor (LCC) owned and operated by Omanis that live in the communities surrounding the Amal field. They will continue to handle some of the construction work as the project progresses. While our agreement with PDO stipulates the allocation of 10 per cent of our project work to LCCs, we aspire to go above and beyond this goal in order to create a positive impact on Oman and its people.

To help achieve our vision of creating a world-class solar industry here in Oman, we are also committed to hiring and developing local talent. We are proud to have achieved above 50 per cent Omanisation in record time, and are continuing to expand and hire for key positions. One of our local hires includes an ICV manager, who will ensure our ICV objectives and goals for Oman are achieved.

As more solar EOR projects are deployed, Oman’s workforce will develop greater expertise across solar technology innovation, project implementation and manufacturing. Experience with solar EOR will transfer to other energy-related sectors, fostering broader economic growth and diversification.

You recently signed up with Sustainable Square Oman for your CSR strategy and initiatives. What made you choose them? 

We want to make a positive difference in Oman that extends beyond the benefits delivered to the oil & gas industry. By partnering with local experts embedded across Oman’s CSR landscape, we will be able to maximize our investment and create impactful projects to benefit Oman’s society, environment and economy. This will help us achieve the desired social impact on the communities in which we operate. Sustainable Square will help us translate this commitment to Oman and its people into high-impact programs and initiatives that will define our social investment strategy. We decided to partner with Sustainable Square due to its successful track record of developing differentiated, results-driven CSR initiatives for global businesses in Oman and the Gulf region.

How is the success of Miraah expected to impact clean energy technology (in specific Solar EOR) prospects in the global market?

Solar EOR is a long-term solution to extracting heavy oil, which makes up almost 70 per cent of the world’s remaining resources. Our solution is simple, and easy to deploy. It is also cost effective and environmentally friendly and it has already proven its success in Oman and California. Any country that has scarce gas resources, abundant sunshine and of course, heavy oil reserves, can benefit immensely from adopting solar EOR. Solar EOR can reduce an oil field’s gas consumption and carbon emissions by up to 80 per cent. This would reduce operating costs, protect the environment and free-up valuable gas resources for use in higher value applications. We all have a responsibility to ensure oil and gas is produced in a way that’s as environmentally responsible as possible.

The scope of Miraah truly underscores the massive market for deploying solar in the oil and gas industry. By targeting this untapped market, we are able to deploy solar at an unprecedented scale, allowing us to reduce emissions at a very significant level. People are starting to realize that clean energy can in fact power oil fields sustainably and economically. We believe that Miraah is only the beginning of the convergence of the oil and solar industries. It will pave the way for similar projects all over the world.

By using solar, we deliver substantial emissions reductions while accelerating solar deployment at unprecedented scale. And as scale increases, costs will continue to fall, accelerating a virtuous cost cycle. This could make solar a strong choice for any commercial project. There is tremendous opportunity to integrate what has historically been called alternative energy and traditional energy into a single energy industry. This energy convergence will not only lead to reduced emissions to help fight climate change, but will create vast economic opportunities.

What is the potential of Solar EOR in the MENA region? What efforts are you making to tap this?

Currently, many countries in the region import or allocate vast amounts of natural gas for use in thermal EOR. Burning natural gas for oil production is very wasteful, especially in countries where gas is a scarce resource. Solar EOR offers a compelling economic solution to any country producing heavy oil that has limited natural gas resources but enjoys abundant sunshine. As oilfields in countries such as Kuwait, Saudi Arabia and Bahrain, mature, they too will need EOR and many have already established pilot steam injection projects to test reservoir.

We established a direct business in Kuwait in early 2014 and appointed Hussain Shehab, a 30-year Kuwait Oil Company veteran, to lead the company’s operations in the country. Most recently, we also hired local energy expert, May Al Zanki, as our Sales and Business Development Director to support our expansion plans and help Kuwait sustainably develop massive heavy oil resources with solar steam rather than steam produced by burning imported natural gas.

Additionally, we aim to create awareness of the benefit of solar EOR in MENA through our participation in the industry’s top tier conferences and exhibitions in the region.

Apart from EOR, what are the other areas where your solar technology could be deployed? Are you talking to prospective institutions for it?

From the very beginning, we designed our enclosed trough solution from the ground-up to overcome the operating challenges found in harsh oilfield environments and deliver the lowest-cost steam for thermal EOR. This “made for the oilfield” approach led to a number of cost and operating advantages. For the time being, we are focused on the wide scale deployment of solar for EOR but our technology has the potential for use in other applications in the oilfield that require steam. This would include power generation, desalination, heater treaters and many more. There are a large number of steam-powered processes on an oil field that our technology can provide the steam for, and consequently reduce fuel consumption and cost.

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