Meeting gas capture targets is taking center stage for many oil and gas operators in North Dakota, and one small operator in the Williston Basin chose to tap into a venture to tackle the flaring challenge.
As part of its strategy, Denver-based Bakken operator Zavanna LLC has developed a joint venture with Flatirons Field Services to build a 45 million cubic feet per day gas processing plant seven miles northeast of Williston.
North Dakota Petroleum Council President Ron Ness said the plant is a good example of how companies are working to reduce flaring.
“Hopefully they will be able to connect other operators up there,” Ness said. “Every one of those (gas plants) is obviously a big help.”
Flatirons Field Services, a midstream company also based in Denver, was formed in 2012 by founders of the former Western Gas Resources which serviced North Dakota when vertical wells were being drilled in the state.
“With all the different activity going on now, there’s an even greater need for midstream infrastructure and they’re looking to get back into that,” Flatiron’s Nick Noppinger told Petroleum News Bakken.
This is Flatiron’s first project in the Bakken and the company expects the plant to be operational by December. Capacity could expand beyond 45 million cubic feet per day based on Zavanna’s processing needs.
As Petroleum News Bakken reported in the Oct. 19 edition, Zavanna is an anchor customer for ARM Midstream’s planned Williston Basin crude oil gathering system. In August, Zavanna ranked 24th among the top 50 Bakken oil producers in North Dakota for operated, non-confidential wells with an average output of 6,410 barrels per day according to the latest data available from the North Dakota Department of Mineral Resources.
Focusing on solutions
Ness said oil and gas companies are racing to get their wells connected and add compression while others are looking into remote capture units.
“They’re doing a lot with their gas capture plans and strategies of how to drill and complete these wells,” he said. “We haven’t had anybody call in a crazy panic, so most of them are putting together their strategy and plan and it remains to be seen what October (data) will look like.”
The North Dakota Industrial Commission, NDIC, determined it would no longer allow exemptions to gas flaring from Bakken and Three Forks wells beyond Oct. 1 in an effort to ensure that operators met the statewide 74 percent gas capture target on that date. As such, flaring applications to the commission that will be heard on Oct. 29 and 30 are minimal and down substantially from the number of applications filed prior to the new policy.
Denver-based Luff Exploration is asking the commission to authorize the flaring of produced gas from its State Miller horizontal well which targets the Red River formation in the State Line field of Bowman County. The well is not currently connected to a gas gathering system and the company has deemed connection to be uneconomically feasible now and in the future. In the latest data available from the state’s Department of Mineral Resources, the well produced just over 1,100 barrels of oil in August and flared 414,000 cubic feet of natural gas. Because the well does not target the Bakken or Three Forks, it is not subject to new production restriction field rules set by the NDIC to minimize flaring.
Continued cases
Continued on the hearing docket from an original scheduled hearing on April 23, 2014, the commission wants to determine the volume and value of the gas flared by Gadeco LLC in violation of North Dakota Century Code on its 25-36H Golden well in the Epping field of Williams County. In March, the commission had denied Gadeco’s application for an exemption from paying taxes and royalties on flared gas from that well. Gadeco had filed for a continuance of the case in May and again in June to give the company time to review additional information that had been submitted to NDIC by private parties.
Statoil is also expected to appear before the commission in a case continued from September’s hearing regarding reconsideration from the commission to authorize flaring on its Williston well in Catwalk field of Williams County. Statoil contends that connecting the isolated Bakken well to gathering infrastructure is infeasible and there is not a market for the gas at the site. In August, the well averaged about 41 barrels of oil per day. According to the new field rules implemented by NDIC, infill wells proven never to be economic to connect to a gas facility - many that produce less than 100 barrels of oil per day - are not subject to production restrictions.
