Vol. 19, No. 3 Week of January 19, 2014
Providing coverage of Bakken oil and gas

Statoil throws a punch in flare fight

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Statoil teams with technology giant General Electric to explore ways to utilize natural gas on well sites and reduce flaring

Maxine Herr

For Petroleum News Bakken

Gov. Jack Dalrymple asked the North Dakota Petroleum Council, NDPC, flaring task force at the Oct. 22 Industrial Commission meeting if perhaps “a large GE-type company” could come in and make a greater impact to reduce flaring in North Dakota.

Perhaps he has his answer.

General Electric, GE, has recently teamed with Statoil to produce and use a device it calls, “CNG In A Box.” The compressed natural gas, CNG, box was announced originally in 2012 by GE as a mobile natural gas station for filling automobiles, but Statoil’s pilot project hopes its function can transfer to fueling well site equipment. It would utilize converted rig systems to replace a percentage of the diesel they burn with natural gas — providing a beneficial use for the gas that would otherwise burn off in a flare.

From buses to oil rigs

In its traditional use, the CNG In A Box system compresses natural gas from a pipeline into a box on-site at a traditional automotive fueling station or industrial location, which then allows CNG-powered vehicles such as taxis, buses, trucks and cars to refill their tanks using a dispenser that has the same look and feel of a traditional diesel or gasoline dispenser.

With the pilot project, Statoil will use the system by first stripping out the valuable natural gas liquids like butane and propane, which can be used for petrochemical production. Those liquids would be pressurized in tanks and sent to processing plants by truck. The rest of the gas would be compressed and stored in the CNG boxes.

The New York Times reports that Statoil’s calculations indicate if all the rigs in the Bakken were converted to run even partly on natural gas, more than 60 million cubic feet of natural gas could be saved every day. That is equivalent to a fifth of the gas now being flared.

Although NDPC President Ron Ness sees the compression box concept working well with fueling rigs, he’s not convinced the reduction of flaring will be as substantial as Statoil and GE claim.

“I think those things have a smaller percentage of reduction in flaring than that, but they can be used strategically,” he says. “The one big concern has been scalability, and certainly GE brings players to the game to scale these. They also have good partners already involved in well site operations.”

Introducing more technology giants in 2014

When asked in December 2013 about reaching out to large companies like GE, flaring task force chairman Eric Dille told Petroleum News Bakken (see related story published in the Dec. 15 issue) that those companies “are out there and aware of the situation.”

Ness says there are other major projects being reviewed by venture capital companies for beneficial use of the gas.

“We are seeing more of those technology partnerships evolve,” Ness says. “Those are all things the flaring task force will be reporting on later this month.”

The eventual hope for GE’s low-cost prototype could allow gas that is currently flared to instead be gathered for heating homes and running appliances, among other uses.

The compression box costs about $1.1 million, and the mobile processor costs about $500,000, according to Statoil executives. The company told Petroleum News Bakken it hopes to get the system up and running by the end of January and will provide further comment on its potential success at that time. Their goal is to have up to eight compression units running by the end of 2014.

“If we can show a successful pathway to adopting natural gas in high-horsepower applications — rigs, frack crews, heavy duty trucking, railways — that will increase demand,” John Westerheide, the strategic marketing leader for unconventional resources at GE Oil and Gas told the New York Times.

Any increased demand could potentially send prices higher and increase incentives to capture it. GE said it hopes to quickly “work out the kinks” in its venture with Statoil and expand the technology globally.

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