Wärtsilä converts Ecuadorian crude oil power plant to associated gas operation and co-develops carbon finance project with customer

Wärtsilä Corporation, Press release, 3 June 2010 at 09:00 UTC+2

Wärtsilä, a leading provider of flexible decentralised power generation solutions, has been awarded the contract to convert the Eden Yuturi - Block 15 power plant in Ecuador from crude oil to associated gas fuelled operation. The aim of the conversion is to mitigate the plant’s environmental impact and to take advantage of the available associated gas for power production. Wärtsilä is also co-developing the project under the United Nations’ Clean Development Mechanism (CDM) to enable the project to access carbon financing. Furthermore, Wärtsilä has been awarded a two-year Operations Advisory and Maintenance contract.

The order has been issued by PETROAMAZONAS EP, a state-owned oil company that strongly endorses the Ecuadorian government’s focus on environmental sustainability. The plant, powered by four Wärtsilä engines and built in 2002, generates power for the Eden Yuturi and nearby oil fields. 

The conversion of the power plant from crude oil-fuelled to gas-fuelled operation will enable the utilisation of associated gases, a by-product of crude oil production. Thanks to Wärtsilä’s multi-fuel technology, this associated gas can be converted to electricity instead of being continuously flared into the atmosphere. This technology offers a unique degree of fuel flexibility, permitting the engines to run on any combination of liquid fuel and associated gas. This is essential for oil and gas companies operating in environments where the associated gas volumes and composition are constantly changing. This flexibility in the utilization of associated gas serves to maximize power production while reducing greenhouse gas emissions.

During the extraction process of crude oil, associated gas will come to the surface as well, and is usually vented or flared, instead of being used. The World Bank-led Global Gas Flaring Reduction Partnership estimates that globally around 150 billion cubic metres of gas are flared or vented every year, causing some 400 million tons of carbon dioxide in annual emissions. That is equivalent to 30 per cent of the European Union’s gas consumption.

Seeking registration under CDM

The avoidance of associated gas flaring is an established project category under the United Nations’ CDM process, and Wärtsilä and PETROAMAZONAS EP are jointly developing and seeking to register the project under the CDM. Under this arrangement, Wärtsilä, in addition to the technical conversion, is advising PETROAMAZONAS EP on the CER development and sales process to enable the utilization of income from Certified Emission Reductions (CERs) for financing the project. Upon acceptance by the UN, the conversion will be the first associated gas project in South America to be successfully registered under the CDM. Wärtsilä and PETROAMAZONAS EP have enjoyed a good relationship for a number of years, and these projects will serve to strengthen it even further.

“PETROAMAZONAS EP is an oil producer with high environmental standards, and by implementing Wärtsilä’s advanced technology to reduce the oil field’s greenhouse gas emissions, is able to further its commitment to sustainability. A key feature of our co-operation is our ability to support the customer in developing the project under the Clean Development Mechanism”, says Tomas Hakala, Vice President, Services, Americas.

For further information, please contact:
Mr Tomas Hakala
Vice President, Services (Americas)
Wärtsilä Corporation
Tel: +55 21 3878 8900

Mr Markus Pietikäinen
Vice President
Group Treasury and Financial Services
Wärtsilä Corporation
Tel: +358 10 709 5630

Media contact:
Ms Tuula Franck
Senior Manager, External Communications
Wärtsilä Corporation
Tel: +358 400 267555

Wärtsilä in brief
Wärtsilä is a global leader in complete lifecycle power solutions for the marine and energy markets. By emphasising technological innovation and total efficiency, Wärtsilä maximises the environmental and economic performance of the vessels and power plants of its customers. In 2009, Wärtsilä’s net sales totalled EUR 5.3 billion with more than 18,000 employees. The company has operations in 160 locations in 70 countries around the world. Wärtsilä is listed on the NASDAQ OMX Helsinki, Finland.