VORTEX PILOT GAS HEATER as compared to a CATALYTIC HEATER

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1 UNIVERSAL VORTEX, INC, A Thermal Solution... Hamilton Business Center 17A Marlen Drive Hamilton, NJ USA PHONE (609) FAX (609) VORTEX PILOT GAS HEATER as compared to a CATALYTIC HEATER Benefits Study By Universal Vortex The Vortex Pilot Gas Heater for Pilot operated gas Pressure Regulators was first applied in gas transmission/gas distribution installations in 1999 and over the years has become universally accepted by industry. Presently there are some 50+ utilities in North America, Europe and Australia that operate 600+ of the VPGH installations. No VPGH performance failure has even been reported. Obviously, 600+ existing VPGH installations cover all conceivable combinations of gas pressure, temperature, gas quality, ambient conditions etc and therefore provide a solid base to generalize the VPGH efficiency. The VPGH s reliability is established by the mere fact that once installed, the VPGH operates for years not requiring any maintenance. The Catalytic Heater for pilot operated gas Pressure Regulators has been used by industry long enough to collect a vast statistical data demonstrating its performance under various operational and ambient conditions. The goal of this work is a comparative Costs Analysis for both methods of pilot gas heating. An independent analysis of the direct cost of VPGH, as compared to a catalytic heater has been conducted in 2001 by Oklahoma Natural Gas (ONG). This analysis, which is based on the contemporary (2001) gas prices, is also included. ONG has agreed to share those results with Universal Vortex. We in turn, want to share them with a potential VPGH user to further demonstrate the savings produced by UVI s Vortex Technology.

2 CATALYTIC HEATERS FOR PILOT REGULATORS TOTAL COST OF OWNERSHIP The study area consists of 60 Regulation Stations where pilot regulators are in use and where approximately 240 Catalytic Heaters operate to prevent pilot gas freezing. The analysis is based on the following data averaged over various utilities. The Heaters in use are of various sizes and consume up to 6.0 cf./hr of fuel gas. Heaters operate 24 hr/day, 5 mo/yr. Fuel cost is $.67/100,000 BTU = $.67 per therm. (based on the current $6.9/1000 cu.ft) Catalytic Heaters sell for approximately $ /unit (single) and $ 1100/unit (dual). Labor to remove and replace a catalytic heater when required is $ An average useful life for Catalytic Heaters is 5 years. Example Calculations Annual Light-Up Cost: Annual travel Cost: Annual fuel Cost: 60 Stations/240 Catalytic Heaters to light 1 man x 10 $ 30/hr + 50% burden = $ 45/hr x 8 hr/day x 10 days = $ mi/day x 10 days x $.50/mi = $150 5 cf./hr x 24 hr x5 months x.67/term x 240 Catalytic Heaters = $ 28,670 (1 cf. heat of combustion is 995 BTU) Annual replacement Cost: Replace 48 Catalytic Heaters/yr (5yr average useful $1, per unit + $ 250 Labor = x 48 = 60, % material management O/H = 66, Annual Cost of Ownership: $ 98, It is known that apart from a Catalytic Heater s gradual deterioration, there are many uncontrolled and unpredictable factors (wet fuel gas, ambient weather conditions, thermostat failure, premature Safety Valve closure due to vibration or thermostat malfunction) that may instantly affect the unit s reliability. Taking a very conservative approach assume that the annual rate of failure is just 0.8% of the total 240 Catalytic Heaters, e.g. 2 units/yr. Also assume that these Catalytic

3 Heaters are dual (e.g. each serves a run that consist of a working and a monitor regulator). Assume that in the resulting malfunction of the pressure regulation two Pressure Regulators on one run fail in a closed position and two on another run fail in an open position and each failure causes an interruption in gas supply for the community of 1,500-2,500 households. The following is an estimation of the outcome of such failures: Pressure Regulator failed in a closed position Household re-light: Mandatory cost is $ 65.0/household. Total (average) 2, households. $ 65.0 x 2,000 = $130,000.00/case. Pressure Regulator failed in an open position This is considered a catastrophic failure since downstream piping would be pressurized to a full Station s inlet pressure. The true actual cost can t be calculated until after the occurrence. However, it might be a millions of dollars due to the potential fires and explosions as well as to the following legal claims. Extended cost of ownership: $98,420 + $130,000 + $, $$$, $$$. VORTEX PILOT GAS HEATER AS AN ALTERNATIVE TO A CATALYTIC HEATER Vortex Pilot Gas Heater (VPGH) prevents freezing of pilot operated pressure regulators by preheating the pilot supply gas up to 90 degrees F. The VPGH generates heat as an outcome of the routine pressure reduction and therefore needs no external energy (fuel) to operate. It has no moving parts and thus requires no maintenance. The VPGH is manufactured out of Stainless Steel by just drilling and welding. This, together with the absence of moving parts, results in the VPGH s extended life expectancy. The VPGH has proven to perform efficiently over a broad range of operational parameters, even handling a single pressure cut of over 1000 psi pressure differential and operating outdoors under ambient temperatures as low as minus 44F. It is not sensitive to wet gas and, while working with sulfur-contaminated flow,

4 can maintain sulfur in the vapor phase thus preventing sulfur deposition in the pilot orifice. Universal Vortex has manufactured the VPGH since Presently there are about 600+ units installed in the USA, Canada, France, Spain and Australia. No VPGH performance failure has even been reported. The Vortex Pilot Gas Heater is available in two designs. The Single Path ($1,650 list price) to serve one pilot at a time and the Dual Path ($2,500 list price) to simultaneously serve two pilots. It was demonstrated over the years that elimination of annual light-up cost, fuel cost, maintenance cost, catalytic heater routine and emergency replacement as well as losses acquired by the Catalytic Heater s failure pays for the one-time cost to purchase and install the VPGH with an annual savings that goes to the bottom line. CATALYTIC HEATER S REPLACEMENT ANALYSIS Potential Annual Savings if 240 Catalytic Heaters are replaced with the VPGH= $98, If 60 Dual VPGH and 120 Single VPGH replaced 240 Catalytic Heaters, the project cost would be $348, If a $348,000 investment pays $98,420/year, than it is roughly a 28.3% annual return on the investment. If $348,000/5 = $69,600 was taken from $98,420 saved/yr to pay for the project over 5 years, that is $28, increase to earning. Therefore, when the project is paid off, there would be a $98, increase in annual earning. It means that within, say 10 years, the gross earning from replacing Catalytic Heaters with the Vortex Pilot Gas Heater would be ($28,820 x5yr) + (98,420 x 5yr) = $636,200.00

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6 Cost Comparison Company Pilot Heater Summary Eastern Region

7 Western Region