1

Water research

Effluent treatment plant, Pearl GTL, Qatar

Managing water as a global resource.................................................................5

Collaboration is the key

Managing water as a global resource

Future energy challenges.......................................................................................9

Future energy challenges

Energy, economy and environment | Availability, accessibility and acceptability of energy sources |
Energy, water and food

Water a key enabler

Driving water-efficient energy operations
Delivering solutions through partnerships

Water a key enabler.......................................................................................... 13

Active policy discussions | An integrated environmental strategy

Preparing for future energy and water challenges

Driving water-efficient energy operations....................................................... 17

Unlocking shale and tight oil and gas, and coal-bed methane | Heavy oil | Injecting steam from
recycled water | Enhanced oil recovery | Improved waterflooding efficiency | Cleaning produced
water | Floating LNG | Reed beds | Reducing the water footprint in product manufacturing |
Gas-to-liquids production |

Delivering solutions through partnerships ...................................................... 27

Collaboration with international oil companies | Collaboration with technology institutes |
Collaboration with non-industry organisations | Water management in biofuel production

Preparing for future energy and water challenges........................................ 33

Emerging technologies

Global demand for energy,

water and food is expected
to grow by 30-50% over
the next 20 years

Shell Technology Centre Rijswijk, the Netherlands

Managing water as
aglobal resource
Water is a vital natural resource and
one that is often taken for granted.
Today, there is strong evidence of
substantial and increasing pressure on
the worlds freshwater supply. There is
also a growing awareness of the stress
nexus: the relationship between
energy, water and food. Over the next
20 years, global demand for each of
these is expected to increase by 3050%1, which will result in greater
pressure on supply and environment.
This makes the management of water
resources an issue of concern to the
whole of society, including governments
and commercial organisations.
Biologist testing the quality of water

World Economic Forum, United Nations and International Energy Agency

Managing water as aglobal resource

Over the next few decades, countries and energy companies will have to find more energy
while meeting the environmental challenge

Water flow from irrigation system

Collaboration is the key

An increasing focus on good environmental practice has given
society a clearer picture of the complex relationships between
energy production, carbon dioxide emissions, water and food.
Agriculture accounts for 70% of all fresh water consumed
compared with 20% for industry and 10% for domestic use.
Globally, however, energy producers are among the largest
industrial consumers of fresh water. Many industrial activities
depend on access to a substantial and reliable supply of clean

new energy sources, including unconventional gas, oil sands

and renewable energy such as biofuels, wind and solar.
water, and the oil and gas industry is no exception.
For example, the water is needed in oil and gas facilities for
drilling wells and for injecting into oilfields to maximise the
recovery of hydrocarbons and for the refinery operations that
transform crude oils into products such as fuels and lubricants.
Over the next few decades, countries and energy companies
will have to find more energy while meeting the environmental
challenge. Against the backdrop of ever-increasing demand for
energy, there will have to be greater emphasis on developing

As part of this shift, key individuals and organisations in the oil

and gas industry are taking a strategic view of water
management. However, this is not an issue that any industry,
government or organisation can solve in isolation. Many players
in society will have to work together to plan and introduce
legislation and policies that strike a balance between energy,
water and food. Defining and implementing the most effective
policies and methods will require a shared commitment to
continuous improvement and to sustained and concerted action.

Water for food production

Success will be to deliver

more energy and produce
less carbon dioxide while
globally freeing millions of
people from energy poverty

Downstream, retail station

Future energy challenges

In energy, fresh water and food, the
world faces three interconnected
challenges. These are complex and
major global issues that will test
ingenuity and resourcefulness.
Equally, they will test peoples ability
to work together.
The growing global population and rising affluence are pushing
up demand, not only for energy, but also for fresh water and
food. This rising demand puts added strains on the environment
and increases the potential for conflict. Society will have to
recognise and address these pressures and the interconnected
challenges for future energy supply.

Energy, economy and environment

By 2050, the global population will be about 9 billion, up from
just under 7 billion today. At the same time, economies will
grow and more people will have a modern, consumer lifestyle.
This change, already noticeable in the developing economies,
will increase energy demand. By 2050, the projected energy
gap will need bridging by a dramatic moderation of demand
and a significant jump in energy supply.

Seoul Tower and Seoul city centre at

night, showing high energy use

Economic growth will also affect the environment. The consensus

of governments is that carbon dioxide concentrations in the

atmosphere should be limited to avoid levels of global warming

with significant negative consequences. The choices society
makes about economic development and energy use will
determine whether those consequences can be avoided.

Availability, accessibility and

acceptability of energy sources
As energy demand rises, companies will have to find new
sources of energy and develop the technology to harness them.
Furthermore, this will have to be done in ways that take into
account the views of consumers and communities.
One example would be switching energy sources for power
generation. Giving natural gas a more prominent role in the
energy mix and lessening reliance on coal will enable countries
to reduce air pollution and greenhouse gas emissions.
Natural gas can be the fastest and lowest cost way for countries
to manage their carbon dioxide emissions as they meet growing
energy needs; according to the International Energy Agency, the
world now has enough technically recoverable gas resources to
last 250 years at current levels.

Future energy challenges are

unprecedented and will require
a new level of collaboration and
leadership amongst governments,
businesses, scientists and others
9

Future energy challenges

Transport fuel is another area of focus. The need for greater

energy diversity and the drive to reduce carbon dioxide
emissions from the burning of fossil fuels have prompted many
countries to include electric mobility, hydrogen and biofuels in
their transport plans.
The energy in biofuels is derived from carbon in the biological
carbon cycle (biomass) rather than from fossil carbon sources
(e.g. oil, gas and coal). Bioethanol, for example, is an alcohol
made by fermentation, mostly of the carbohydrates in sugar or in
crops such as corn and sugar cane.
The ethanol can be used as a vehicle fuel in its pure form in
specially modified vehicles, but it is more usually added to
gasoline to increase octane and improve vehicle emissions.
Bioethanol is widely used in the USA and in Brazil; all gasoline
sold in the latter country must include 20-25% ethanol.

10

Growing biofuel crops and processing them requires water.

However, in south-east Brazil, sugarcane cultivation for the
production of ethanol uses less water than the production of
other types of biofuels and, equally important, is predominantly
rain irrigated.

Downstream Biofuels - Virent, USA

Energy, water and food

In recent years, governments and commercial organisations have
gained a clearer understanding of the nexus between the worlds
energy, freshwater and food needs.
Growing populations will raise demand for food and greater
affluence will see people consume more food, including more
meat and dairy products, which will require much more fresh
water to produce.
Meeting the increased water and food needs will, in turn,
contribute to a rise in energy demand. Modern agricultural
methods are energy and water intensive and require extensive
use of fertilisers, which are mostly derived from fossil fuels.
Large amounts of energy are required to process, transport,
desalinate or recycle water for consumption. Equally, producing
this energy requires water, for example when drilling wells,
injecting water into reservoirs or refining crude oil.
The actions that society takes today will determine whether it
succeeds in tackling these challenges. Ultimately, success will be
to deliver more energy and produce less carbon dioxide while
freeing millions from energy poverty and not compromising
water and food supplies.

Sakhalin Energy, Grand Aniva LNG ship, Sakhalin, Russia

11

Shell is working with the

World Business Council for
Sustainable Development
to explore the water use
associated with different
energy types

12

Water a key enabler

The rising global population and the
rapid industrialisation and commercial
progress in developing economies are
the driving forces behind the surge in
global demand for energy. By 2050,
society could be using two-thirds more
energy than it does today. Energy and
water are intrinsically linked. Producing
energy requires a reliable water supply,
so managing water resources even
more effectively is firmly on the agenda

Shell Technology Centre Bangalore, India

for the worlds energy companies.

Active policy discussions

The remaining 25% is for upstream operations: those associated

with oil and gas exploration and production.

As global freshwater supplies come under increased pressure

and demand for energy increases, the energy sector is seeking
to understand and improve its water use. Shell has been
addressing the role that water plays in oil and gas processes for
many years and is committed to assessing and managing its
water footprint. Within Shell, the manufacturing of oil products
and chemicals accounts for about 75% of freshwater use.

Shell is playing an active role in policy level discussions.

For example, we have recently started work on a project to
explore the growing stresses on the worlds energy, water, food
and climate systems. We are also working with The Nature
Conservancy, Wetlands International and the International
Energy Agency.

13

Water a key enabler

Shells global technology centres in Houston, USA; Amsterdam and Rijswijk, the Netherlands; and Bangalore,
India, are working on technical solutions to various aspects of the water management challenge

Shell Technology Centre Amsterdam, the Netherlands

Shell also is participating in various global initiatives guiding

sustainable water management in the private sector. With the
World Business Council for Sustainable Development, Shell is
leading a multi-stakeholder project to create further insight into
the water-energy nexus.

Driving the development of innovative solutions in energy

technology is vital to Shell. An overall research and development
spend of more than $1 billion in 2010 underpins this, with
water playing a roll in our overall research activity.
Through our teams in Houston, USA; Amsterdam and Rijswijk,
the Netherlands; and Bangalore, India, we are also working on
technical solutions to various aspects of the water management
challenge.

14

An integrated environmental strategy

Participation in various specific initiatives and Shells response to
the water challenge are in line with a wider environmental
strategy that has a three-strand framework: compliance,
improvement and preparation.
We continuously sharpen our focus on environmental management
in our projects and operations. Our work with leading
environmental experts is helping to improve our approach.

15

For water use in the oil

and gas industry,
technology is a key
differentiator

16

Driving water-efficient
energy operations
Most energy cannot be produced
without access to reliable supply
of water. In addition, oil and gas are
becoming more challenging to extract.
This involves increasing freshwater use.
The industry will have to improve water
efficiency across the value chain,
from well to refinery and beyond.
Shell is exploring new working methods and developing
and deploying water-efficient technologies throughout its
up- and downstream facilities.
The following sections describe some of the significant and
successful techniques that Shell has applied to maximise water
recycling and minimise waste-water production and freshwater use.
These sections follow the value chain from finding and producing
new resources through to refining and processing them.

Pinedale, Wyoming, USA

Athabasca Oil Sands Project, Alberta, Canada

17

Driving water-efficient energy operations

Developing shale and tight oil and gas resources and maximising field recovery
are vital for meeting global energy demand. At the same time, managing the water footprint is essential.
Unlocking shale and tight oil and
gas, and coal-bed methane
Natural gas is the cleanest-burning fossil fuel and,
with new discoveries of conventional hydrocarbons
likely to have peaked, tight and shale gas,
and coalbed methane resources are playing an
ever-more important role. This typically referred
to gas from unconventional sources, includes
tight-sands gas, shale gas, coal-bed methane and
gas hydrates. The world has vast amounts of these
gas resources but their economical recovery faces
specific challenges owing to the characteristics of
the formations where the gas is stored.

By 2012, natural gas is expected to make up more than half of

Shells hydrocarbon production. Today, most of Shells natural
gas production comes from conventional gas fields with
production levels for shale and tight gas rising.
Economic development of tight and shale gas resources presents
several technical and environmental challenges, as the formations
are characterised by extremely complex structures of small pore,
often narrower than a human hair.
In all cases, fracture stimulation is required to create largesurface-area, high-permeability pathways to enable the gas to
flow into the well because of the poor flow properties of the
gas-bearing rock. Key enablers to economic tight and shale gas
development were the significant technological advances in
horizontal drilling in the last two decades.
Oil and gas companies have used hydraulic fracturing for more
than 60 years and it has been applied safely in hundreds of
locations worldwide. It is a reservoir stimulation technique that
relies on initiating and propagating fractures in the hydrocarbonbearing rock by pressurised fluids injected at high rates.
Hydraulic fracturing fluids typically are 99% water and sand,
and around 1% chemical additives. We release information
about chemicals used in our hydraulic fracturing operations (to
the extent allowed by our suppliers) and support regulation to
require suppliers to release such information.

Marcellus Shale operations, Pennsylvania, USA

18

However, as production of tight and shale gas increases, some

people have expressed concern over the fracturing process. A
report from the U.S. Department of Energy that looked at the
potential health and environmental implications of hydraulic
fracturing shares the prevailing view that the risk of fracturing

fluid leakage into drinking water sources through fractures made

in the deep shale reservoir is remote. When a well is designed
and constructed with great care, groundwater will not be
contaminated. To mitigate potential health and environmental
implications from hydraulic fracturing, strong and fair regulations,
that everybody has to adhere to, are needed.
Hydraulic fracturing operations require more water than
conventional gas production processes, but Shell reuses much of
the water that is produced with the gas for the treatment of new
wells. Depending on the amount of water recovered from the
wells during clean-up and production, this approach can
significantly reduce the volume of fresh water needed for the
fracturing process, which may translate into saving a few million
litres of water for each well completed. This will benefit the
environment by reducing the source freshwater intake and
minimising the disposal quantities. To achieve these objectives,
water-treating technologies are tested and qualified in the field
at our US projects. Increasingly, sources include non-fresh water,
waste water and recycled formation water.
In 2010, for example, we agreed to fund a water recycling
plant for Dawson Creek, Canada. The plant will treat waste
water from the city so that it can be reused in our operations
and for other industrial and municipal uses, such as watering
local sports fields.
According to various studies, including one done by the
Massachusetts Institute of Technology in the US, the water
intensity of shale gas ranks among the lowest of all fuel sources.
Across its lifecycle, shale gas-fired power still uses only half the
volume of fresh water per MWh compared to power produced
from coal and nuclear.

Shell has strict worldwide company standards

for its well and facility designs and operating
procedures. Equally, it has decades of experience
in hydraulic fracturing. Our shale and tight gas
onshore operations adhere to five operating
principles. These provide a tested framework for
protecting water, air, wildlife and the communities
in which we operate. One of these principles
is to conduct operations so that groundwater is
protected and water use is reduced to an as low
as reasonably practicable.
The tight gas that Shell produces comes from rocks
a thousand or more metres below the aquifer that
contain potable water. We will not operate wells
where isolation of our completion and production
activities from such groundwater is unachievable.
Fracturing fluids are kept separate from this
freshwater aquifers by lining the hydraulically
fractured wells with multiple steel and concrete
barriers. We do not hydraulically fracture wells
unless we have pressure tested the wellbore for
integrity.
Tailings ponds, Athabasca Oil Sands Project, Alberta, Canada

We are further reducing our environmental footprint by re-using

the water of drilling and fraccing operations. At both
Groundbirch and Pinedale, we reuse gas-processing water for
fraccing, reducing the water in-take by 50%.
In Chinas Shanxi Province, where we are developing the
Changbei field, we funded the construction of 240 underground
water-storage tanks and 12 water-pumping stations, providing
almost 3,000 people better access to drinking water.

Heavy oil
In a world with increasing energy needs, oil sands
are becoming an important resource. Current oil
sands extraction methods are water-based and
require responsible management of water use to
minimise withdrawals from fresh resources.
Shell is developing new technologies and
processes to reduce the use of fresh water by
increasing water treatment and recycling.

water to replace the water that evaporates. The government

allocates about 2.2% of the Athabasca Rivers flow to the oil
and gas industry. We have a permit to use 0.6% of the flow
but we only used a small fraction of our allowance in 2010.
Water is necessary to separate the oil from the clay and sand.
When oil is extracted from oil sands, a mixture of water, coarse
sand, silt, clay and a little oil remains. This mixture, known as
tailings, is stored in a pond near the oil sands mine. None of
this water is released directly into the environment. The water
from our tailings ponds is monitored, controlled and reused.

At the Athabasca oil sands project in Canada, Shell uses 2-3

barrels of water to extract 1 barrels of bitumen. We recycle all
the water recovered from this extraction process, but need fresh

19

Driving water-efficient energy operations

For EOR technologies, our research efforts focus on boosting oil recovery while meeting disposal standards
and solving environmental challenges

Towards the end of 2010, the seven oil sands

mining companies in Canada signed a landmark
agreement to create the Oil Sands Tailings
Consortium. All the companies agreed to remove
monetary and intellectual property barriers and
to collaborate on future tailings research and
solutions. An unprecedented step, the consortium
reflects the companies commitment to socially
and environmentally responsible operations and to
respond to challenges for the industry to accelerate
tailings reclamation.
In Shells view, this new relationship is a key step
towards tailings solutions that will enable it to
accelerate the pace of reclamation using the most
advanced environmental measures.
Schoonebeek, the Netherlands

Our new tailings demonstration project, Atmospheric Fines

Drying, that combines enhanced flocculation with dynamic
filtration, is designed to accelerate water removal from tailings
and to make it available for further reuse. Since 2006, we
have invested more than $98 million in research that also
helped to develop this new technology.

injecting steam from recycled water

enhanced oil recovery

At Schoonebeek in the Netherlands, we are

injecting steam from recycled water to extract oil.
In January 2011 our joint-venture Nederlandse
Aardolie Maatschappij (NAM) resumed operations.

On average, primary and secondary recovery

processes can extract only 30-35% of the oil in a
reservoir. Enhanced oil recovery (EOR) goes beyond
this to maximise the proportion of hydrocarbons
produced from a field and plays a key role in
meeting increased energy demands.

It receives water from a plant specially constructed at a nearby

waste-water purification facility (NieuWater). The plant takes in
treated sewage water from the facility and purifies it further to
produce up to 10,000 m3 of ultra-pure water daily. The plant
incorporates some of the most advanced water purification
technologies.

20

Since the first waterflooding programmes in the 1930s, the oil

and gas industry has gained a much clearer understanding of
the effects that injected water has on a reservoir. Equally, it has
a much better understanding of how the decisions on maximising

Shell is pursuing an innovative way of raising oil recovery rates by tailoring the properties of the injected
water to maximise the recovery of oil from the reservoir
oil recovery will influence the volume of source water required
for the programme, the quality of the water produced in the
proces and the options for its disposal.
Injection fluids for EOR require chemical components, which,
in turn, will be back-produced with the formation water, i.e.
the water found naturally in the rock. In the EOR environment,
produced water may contain chemicals such as the surfactants
used to improve oil recovery and corrosion inhibitors, where
these have been added to protect the facilities.
In oil and gas provinces around the world, environmental
regulations are more stringent and complex than ever before.
Operators must assess, manage and minimise the amount of
dispersed oil and dissolved hydrocarbons in water and observe
tight limits on the use of chemicals.
Shell has pursued a vigorous research and development
programme in EOR and has devised a range of new
technologies to boost oil recovery. For these new EOR
technologies, our research efforts focus on enhancing oil
recovery while meeting disposal standards and solving
environmental challenges.
There are strict regulations on chemical EOR concerning the
disposal of the oil, polymers and surfactants produced from
thereservoir. Produced water may also be technically difficult
tode-oil owing to the oils high viscosity and small droplet size.
The best option may be to reinject produced water into the
reservoir, but reinjection takes into account the effects of the
residual oil on injectivity and how the residual chemicals will
affect subsurface performance.

Increasingly, three key water objectives are shaping EOR

decisions: improving recovery by injecting conditioned water;
minimising impact on the environment; and maximising the
proportion of water that is recycled.

Improved waterflooding efficiency

For decades, the industry has been injecting water
into its reservoirs to recover more oil. In recent
years, Shell and other operating companies have
realised that a greater focus on the condition of the
injected water and a clearer understanding of its
chemical composition can help to boost oil recovery.
Waterflooding efficiency can be markedly improved by
lowering the salinity of the injected water. The less salt in the
water, the easier it is to dislodge the oil from the pores in the
reservoir rock. With this in mind, Shell scientists are working
onlow-salinity waterflooding (LSF).
The LSF approach enables operators to adjust the salinity and
ionic composition of the injection water to suit a specific reservoir
formation by taking into account, for example, the tendency for
clay minerals to swell and for the reservoir to sour. Essentially,
Shell is pursuing an innovative way of raising oil recovery rates
by tailoring the properties of the injected water to maximise the
recovery of oil from the reservoir.
Recently, various LSF trials have been held in oilfields in the
Middle East. One Middle East location demonstrates the
tremendous potential of the technology by an observed reduction
of more than 10% around the wellbore. Along withour joint-

Schoonebeek, the Netherlands

venture partners, we are working to further develop and scale

upthe technology.
A central part of our on-going LSF research is to improve our
understanding and control of flooding processes at the subporescale. One of the biggest challenges facing the
development team will be to replicate laboratory successes
onthe reservoir scale.

21

Driving water-efficient energy operations

Cleaning produced water

Produced water is the primary waste product from
the separation of oil, gas and water at production
facilities. It is typically a mixture of formation and
injection process water containing oil, salts,
chemicals, solids and trace metals. Innovative
treatment technologies help oilfield operators to
clean waste water for recycling or safe disposal.
In its upstream activities, Shell produces more water from its
reservoirs than oil. The relevant authorities closely regulate the
discharge of produced water to the environment. Shell is
developing and applying new chemical, physical and
biological separation methods to clean produced water and
enable it to be safely introduced into the natural environment as
an alternative to disposal by injection into isolated underground
formations.

FLOATING LNG

Floating LNG

For offshore environments, Shell is working with a vendor on

plans for a special seawater desalination vessel that will supply
water to support its LSF technology. A detailed study has been
conducted into its suitability for improving oil recovery from new
and existing fields in the deepwater Gulf of Mexico.
The system would optimise the treated seawater to reservoir
conditions and help to increase the total oil recovery by 5-10%.
This would be achieved without using chemicals, only seawater.
In a slightly different configuration (water treatment and
recovery), the vessel could be used to treat produced water and

22

ensure that it meets or exceeds stringent standards before being

discharged to the sea. A separate concept is under study
whereby the seawater desalination vessel would be used to
store and mix special chemicals (surfactants and polymers) with
water for injection into the reservoir to help maximise the
increase in oil recovery.

Floating liquefied natural gas (FLNG) production is a

revolutionary technology that enables the development of
offshore gas fields that would otherwise be too costly or difficult
to develop. Shells Prelude FLNG project is the worlds first such
development and will be located off the Australian coast.
FLNG technology reduces the impact on sensitive coastal
habitats, as it avoids the need for pipelines to shore, dredging
and jetty works, and uses product carriers that will be far from
coastal reefs and whale migration routes. At the same time, the
technology includes some innovative solutions for water
management.
Hydrocarbons in produced water are either dispersed droplets
or in solution. For gas production facilities, dissolved
hydrocarbons are the main challenge. To meet the World Bank
and International Finance Corporations environmental, health
and safety guidelines for overboard disposal of produced water,
the Prelude FLNG facility will be fitted with systems to remove
dispersed oil and aromatic hydrocarbons.

This approach uses advanced technology and is part of a

commitment to minimise the volume of hydrocarbons for
discharge. As a further benefit, the small volume of
hydrocarbons extracted from the separation process can be
regenerated and added to the product stream.

REeD Beds
In Oman, Petroleum Development Oman (PDO, Shell share
34%) has created the worlds biggest commercial reed-bed
water-treatment plant, a 235-ha facility that is treating water
from the Nimr oilfield.
In parts of Oman, fresh water is extremely scarce, but nearly five
barrels of produced water are brought to surface for every barrel
of oil and this water has to be disposed of. The produced water
contains small amounts of salts and oil, and is typically pumped
back in the well.
In 2008, PDO engaged German company Bauer Resources to
build a water-treatment plant at the Nimr oilfield that uses reed
beds to clean contaminated water. Since its start-up late in
2010, the plant has been cleaning about 47,000 m3 of
contaminated water every day. This approach saves cost and
energy for reinjection, and has the potential to make water
available for use by local communities.
The plant includes an upstream oil separator and a bio-based
treatment facility that uses microorganisms to eliminate the
contaminants. Biomass is also produced and can be used as an
energy source. The treatment plant does not require any
additional energy supply.
In 2011, Bauer Resources received the Global Water Award for
Industrial Water Project of the Year for the innovative reed-bed
water-treatment plant. PDO plans to double the plants water
capacity, so that it can eventually treat 95,000 m of
contaminated water a day.

Nimr reed beds, Oman

23

Driving water-efficient energy operations

The water-processing facility at the mega-scale Pearl GTL plant is the largest in the world. It will recover
andtreat industrial process water for reuse, at a volume comparable to that for a town of 140,000 people
Reducing the water footprint in
product manufacturing
Water use reduction has long been a priority in the downstream
sector. In its refineries, Shell has introduced best available
technologies to increase energy efficiency and reduce water
consumption. Using less steam in manufacturing, for example,
means a lower volume of water is necessary for heating and
cooling.
Shell is constantly looking for ways to reduce water
consumption. In the refining sector, this involves techniques such
as recycling cooling water, steam-condensate recovery and
developing (full) effluent reuse methods.
The next challenge in the manufacturing/downstream sector will
be enhanced removal of trace components to meet planned and
increasingly stringent environmental standards. Throughout its
global downstream operations, Shell has focused on water
management, reduction of water sources, general housekeeping
and appropriate hardware for water-treatment facilities.
In project design, the greatest challenge is to integrate plans for
energy, water and carbon dioxide footprint reduction into our
proposals. In its new plants, Shell strives for an integrated
solution that balances footprint reduction with the demands of
operational reliability and lifetime costs. This utility-led design
philosophy has shown that such approaches can also yield
good economic results.

Clarifier and bioreactors effluent treatment plant, Pearl GTL, Qatar

Gas-to-liquids production
The water challenges that Shell faces around the
world come in all shapes and sizes, but few are
on a bigger scale than the operations at the
worlds largest gas to liquids (GTL) plant. It will

24

produce GTL Kerosene for blending into a cleaner

burning aviation fuel; GTL Gasoil, a cleanerburning diesel-type automotive fuel; GTL Base Oils
for premium lubricants; GTL Normal Paraffin for
detergents; and GTL Naphtha, a high-paraffin
feedstock for the petrochemical industry.

Construction of the Pearl GTL plant in Qatar has gone a long

way towards meeting the worlds growing demand for highquality liquid hydrocarbon products. A joint development by
Qatar Petroleum and Shell, the plant will process about 3 billion
barrels of oil equivalent over its life. The gas will come from the
North field, which is the worlds largest single non-associated
gas field and stretches from Qatars coast into the Gulf.
Water is in short supply in Qatars desert climate. It may be
surprising to learn that the Pearl plant not only uses water but will
produce as much water as GTL products. The chemical reaction
that occurs when synthesis gas passes over catalysts in the plant
produces water as well as the building blocks for GTL products.
When fully operational, the amount of water that Pearl GTL
produces is expected to make it possible to run the plant without
drawing on Qatars scarce natural freshwater resources or on
seawater.
Shell will use all this water as part of a strategy to prevent any
liquid waste discharge from the plant. The water-processing
facility at the Pearl GTL plant that will recover and treat all the
industrial process water for reuse will be one of the largest in the
world. With the capacity to treat 280,000 barrels of water a
day, this facility will have flotation units, biotreaters, ultra-filtration
units, reverse osmosis units, evaporators and crystallisers, and
will be comparable to a plant for a town of 140,000 people.
After cleaning to remove hydrocarbons, inorganic contaminants
and solids particles, most of the water will be used for steam
make-up, cooling and utilities and a small amount of pure water
will irrigate landscaped areas at the plant.

Pearl GTL, Qatar

Effluent treatment plant, Pearl GTL, Qatar

25

Shells technology strategy

for water management is
based on open innovation
and active partnering
with governments and
academic institutions and
alliances with other
commercial organisations

26

Delivering solutions
throughpartnerships
We are constantly seeking new and
innovative ways to reduce the need for
fresh water. Effective water
management schemes are rooted in
co-operation and collaboration with
other stakeholders. Around the world,
Shell is forging technical and
commercial alliances and working with
local communities to address the water

fields, Shell will seek to develop the technology it needs through

collaboration with third parties or through the purchase of
commercially available systems.
Shell works with water technology vendors in two ways: first, by
helping to influence the development of tools and methods that it
can apply in its operations and, second, by providing vendors
with an industrial test bed. For Shell, the main objectives in these
open collaborations are to find the best technologies and then to
apply them in most effective ways to enhance oil and gas
operations and minimise water use. A prime example is the full
effluent reuse system applied at the Pearl GTL project in Qatar.
The system was based on inputs from and extensive pilot test
work at refineries and GTL sites with major water technology
companies such as Veolia Water, GE/Zenon and Ondeo
Industrial Solutions.

challenge.
Shell works with many different companies, knowledge institutes
and universities on water management issues. This includes
participating in the Petroleum Environmental Research Forum
(PERF) collaboration between international oil companies and
research programmes with, among others, TNO, KWR
Watercycle Research Institute, UNESCO-IHE Institute for Water
Education and a range of universities, consultants and
technology providers. Technology partners often rely on Shell for
access to process facilities when conducting pilot studies.

Construction Northern water plant

and Geelong refinery, Australia
(courtesy of Barwon Water)

In areas where there is potential competitive advantage,

Shell will seek to develop proprietary technologies. In other

Construction Northern water plant and Geelong refinery, Australia

(courtesy of Barwon Water)

27

Delivering solutions throughpartnerships

Collaboration with technology

institutes
Shell works with technology institutes such as the Wetsus Centre
of Excellence for Sustainable Water Technology and the Institute
for Sustainable Process Technology (ISPT) to develop sustainable
water technologies for different sectors of the process industry.
Wetsus is an established international network of companies,
universities and water knowledge institutes that focuses on
researching and developing entirely new concepts and
breakthrough improvements in existing water technologies.
The projects are demand-driven. The approach is the integration
of various knowledge disciplines such as membrane separation,
microbiology, electrochemistry, crystallisation and adsorption.
To meet the current and future demands for fresh water and
water reuse, sustainable desalination of seawater, groundwater
and wastewater is required. Shell is involved in research on
desalination and on the biofouling of membrane treatment
systems. Biofouling is the accumulation and growth of
microorganisms on the membrane surface and leads to an
increase in the required feed pressure. The challenge is to
develop membrane systems that are less susceptible to
biofouling.
Geelong refinery, Australia

Shells technology strategy for water management is also based

on open innovation and active partnerships with governments
and academic institutions as well as with other commercial
organisations. The open innovation route generally focuses on
fundamental research and offers the potential to give universities
the rights to publish some of the results that arise from the work
conducted under the agreement.

28

Collaboration with international oil

companies
PERF is a research and development joint venture whose
members are corporations engaged in the petroleum industry
that recognise the importance of a clean, healthy environment
and are committed to supporting co-operative research and
development. It provides a vehicle for experts from the worlds
leading international oil companies to exchange ideas and
experiences in the field of environmental research and to
conduct joint research projects on topics of shared interest.
Shell has acted as a host for PERF events in recent years and
has participated in several joint-industry projects.

ISPT is a collaborative partnership of Dutch industries, universities

and knowledge institutes. Its research programme covers aspects
from fundamental research to technology implementation.
Gravitational settling is a traditional technique for the separation
of oilwater mixtures from oil wells, but using a new swirling
flow technique for separation could significantly reduce the
space requirements. Shell is providing guidance and test
facilities for research students working on the development of
such a device. This technology should have applications for
dealing with rising water cuts on offshore platforms because it
will offer a compact and flexible solution.

OMEGA pilot plant at Shell laboratories

29

Delivering solutions throughpartnerships

We are continuously improving the recovery and the recycling of water, including waste water, from
communities near our operations
The SAPREF refinery in South Africa, in which Shell has a 37.5%
interest, the company has an agreement with the local water
authority that allows it to use recycled household waste water for
industrial purposes.
We also apply advanced technology to help reduce freshwater
use in our chemicals manufacturing operations. For example, the
monoethylene glycol plant at our petrochemicals complex in
Singapore makes use of Shells proprietary OMEGA technology.
This uses 20% less steam and generates about 30% less waste
water than a traditional monoethylene glycol plant.

Water management inbiofuel

production

Shell and Cosan joint venture, Razen Cane farming trucks, Brazil

Collaboration with non-industry

organisations
In Australia, we are collaborating with a regional
water authority on building a water-treatment
plant near our Geelong refinery. This plant will
recycle water from the refinery and sewage from
neighbouring areas to make it suitable for
industrial use and community sports grounds.

30

Construction of the $90 million plant is due to finish late in

2012; commissioning will be mid 2013. When operational,
the plant is expected to save the 5% of the Geelong regions
potable water, which Shell currently uses in refinery processes.
The Australian and Victoria governments, Barwon Water and
Shell are jointly funding the project, with Shell being the main
contributor.

Rising fuel demand, increased environmental

regulation and greater urbanisation are key
challenges to delivering more sustainable
transport products. Transport fuels are a crucial
part of the picture and biofuels will help to keep
the worlds road transport networks moving in the
period between hydrocarbon reliance and a new,
low-carbon economy. By 2030, 9% of road
transport fuels is projected to come from biomass.
Shell is one of the worlds largest distributors of biofuels.
It has also invested in the production of the most sustainable and
cost-competitive of todays biofuels: Brazilian sugar-cane ethanol.
In 2011, we formed the multibillion-dollar Razen joint venture
with Cosan. Razen is Brazils largest producer of ethanol and
has significant growth plans.

The water intensity of biofuel crops is highly variable.

Some biofuels may require a lot of water, but freshwater
resources must be viewed in their local context. In some areas,
using fresh water for biofuels production may have limited
impact on the domestic use of water and be sustainable.
Concentrating on biofuels with low freshwater needs and
producing biomass feedstocks in areas of low water stress will
minimise the potential water risks of biofuel.
In south-east Brazil, sugar cane needs virtually no irrigation
because of the high seasonal rainfall. With recycling, Cosans
current production process uses about 10 litres of water to
produce each litre of ethanol. In 2010, Cosan recycled about
90% of the water used in 19 of its 24 mills, and there are plans
to install the same technology in the remaining mills by 2013.
Shell is a member of several multi-stakeholder sustainability
standards, including BonSucro, the Roundtable on Sustainable
Biofuels, the Roundtable on Responsible Soy Association and the
Roundtable on Sustainable Palm Oil. Best practice water
management principles are embedded in the principles and
criteria of these sustainability standards.
Our objectives are to further develop our understanding of
current water accounting methodologies for biofuels and to
apply these methodologies across Shells biofuels portfolio.
We work with Texas A&M University in the USA on hydrology
modelling to assess the risks and impacts in more detail at the
watershed level.

Offshore waterflooding, sulphate removal unit, Ursa, USA

31

Across the oil and gas

industry, the issue of water
use is firmly on the agenda
and is certain to stay there

Nigeria solar-powered water scheme, Umuokwa, Igbo, Etche, Nigeria

32

Preparing for future energy

and waterchallenges
The oil and gas industry is moving
towards a future of increasing
challenges in oil and gas extraction and
processing. This will almost certainly
result in greater demand for process
water and a larger volume of
wastewater. Sustained investment in

objectives such as taking a full EOR capability to the offshore

environment and developing shale and tight gas deposits.
The need to develop advanced and cost-effective water
technologies to monitor, control and treat water for reuse to
minimise the impact on environment requiring continuous effort
across the entire oil and gas industry. There is a requirement to
develop integrated engineering solutions that enable operators
to effectively decrease their unwanted water production and
manage the challenges stemming from produced water. In the
downstream sector, the emphasis will be on recycling and,
where appropriate, finding waste-water streams that can be
used to support industrial operations.

technology, the introduction of new

working practices and collaboration
with a range of water stakeholders will
be necessary to achieve sustainable
water management.

Nimr reed beds, Oman

In the upstream sector, the focus will remain on minimising the

volumes of water that are produced with oil and gas, and
continuously finding more effective technologies to clean oilfield
water for reuse. In addition, the focus will be on safeguarding
freshwater supplies and ensuring that any water produced or
used in relation to our operations meets and exceeds the legal
requirements for purity if it is to be released into the natural
environment. This enables Shell to achieve important business

Nimr reed beds, Oman

33

Preparing for future energy and waterchallenges

For Shell, water management has become a central consideration

for every operation, particularly in those areas of the world where
the supply of fresh water is constrained

Schoonebeek, the Netherlands

Groundbirch, Canada

Amsterdam

Rijswijk
AOSP, Canada

Pearl, Qatar

Nimr, Oman

Shells emerging technologies team actively

collaborates with other Shell teams and external
organisations on research and development
projects that address key water management
challenges. This work includes fundamental
research to obtain a clearer understanding of the
physical and chemical aspects of water challenges
and active participation in developing technologies
to meet them.
The key challenges for the oil and gas industry are reuse of
industrial water, upgrading water for agricultural or domestic
purposes and removal of finely dispersed oil, particulate matter,
trace metals, harmful dissolved components and salt.

Pinedale, USA
Houston

Emerging technologies

Bangalore
Omega, Singapore

Raizen, Brazil

FLNG Prelude

Sapref, South Africa

We invite organisations or individuals who own potential

breakthrough technology to discuss opportunities for
collaboration. The most promising ideas may find support from
the Shell GameChanger group, which invests in novel,
early-stage energy-related proposals to help them achieve proof
of concept.

Geelong, Australia
Shell global technology centres
Water project examples: Heavy oil

Downstream GTL

Conventional gas

EOR

Tight gas

Biofuels

Shells global innovation and technology centres |Shell water project examples

Partnerships with governments, the water industry,

nongovernmental organisations and local communities are
important parts in the industrys objective to meet its commitments
for ever more sustainable operations.
For Shell, water management has become a key consideration
for every operation, particularly in those areas where the supply
of fresh water is constrained. The response from Shell is twofold.
The first part is to adopt policies that define and measure our

34

performance. Freshwater use, for example, is now part of Shells

detailed sustainability scorecard. The second part is to identify,
develop and apply tools and techniques that reduce our water
consumption while enabling us to safeguard the integrity of
operations and meet other environmental targets.
Across the oil and gas industry, the issue of water use is firmly
on the agenda and is certain to stay there.

To meet the future more-stringent requirements for

water reuse, traditional gravity-based separation
technologies, such as hydrocyclones, are
inadequate at removing finely dispersed oil from
water. Shell is, therefore, working to develop and
apply new advanced technologies that will
achieve this. These initiatives include a
collaborative project with the University of Twente
in the Netherlands on a new type of membrane for
selectively collecting and removing tiny oil
droplets, and work with MIT in Boston, USA, to
develop super-hydrophobic materials that will
collect hydrocarbons from water.

At the contaminant levels of parts per trillion that

will be required to confidently reuse industrial
water, more fundamental understanding of the
behaviour of material surfaces at the nano-scale
will be required. For example, in cooperation with
the Advanced Energy Consortium of the University
of Texas, USA, Shell is investing in nanotechnology
research on characterising surfaces and interfaces
and then applying this improved understanding to
optimise existing or develop new industry methods.
To deal with the challenges of further reducing the
level of oil in produced oilfield water, we need to
break the stability of emulsions. In the Netherlands,
Shell is collaborating with Wageningen University
to develop an energy-efficient magnetic emulsionseparation technique. This research combines the
universitys understanding of complex emulsions,
Shells oil and gas industry knowledge, and a
shared interest in nanotechnology.
Extracting oil from oil sands is a highly waterintensive process. Shell is working with jointventure partners to develop a novel extraction
method based on a hydrocarbon solvent process,
i.e. essentially replacing water with naturally
occurring light hydrocarbons that are recycled as
part of the process. This approach is likely to
deliver a significant reduction in water use
footprint and may offer other environmental
benefits.

Water research

Nanotechnology

35

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