Ferus Natural Gas Fuels
GE Oil & Gas has teamed up with Ferus Natural Gas Fuels in a 50/50 joint venture to provide the 'Last Mile Fueling solution,' a solution to an ongoing problem in the Bakken.
The Last Mile Fueling solution is a technology & logistics system to make natural gas fueling available for exploration & production operations. It takes previously uneconomic natural gas from a flare stack, oilfield production site, or from a remote pipeline, then compresses the gas and delivers it the final distance, or the "Last Mile," to make cleaner, cheaper fueling economical in the most remote energy and petroleum (E&P) areas while reducing environmental impact.
• Challenges of Flaring:
With advances in drilling and well stimulation technology, the number of oil wells grow and so too does the amount of gas being flared. Many new wells are located far from existing pipeline infrastructure needed to capture and use the gas economically. In the North Dakota and Montana Bakken region, the Last Mile Fueling system addresses this issue and allows companies to use this flared or wasted gas for production operations and exploration in a cleaner, cheaper and more economical way.
North Dakota has recently passed new flaring standards, with the goal of having drilling companies capture 90 percent of all the gas by 2020. Currently, drillers are capturing approximately 72 percent. That number must rise to 74 percent when the new standards go in to effect in October, and raise subsequently thereafter until the year 2020. The partnership of GE Oil & Gas and Ferus is helping to meet this new standard.
GE's 'Last Mile Fuelling Program Manager, Philip Fusacchia, advises that with the system and technology that they're using, one-fifth to one-third of the daily flaring rates would be accounted for. "This means that of the 300,000 million that's flared today, we could see one-fifth to one-third of that being accounted for with the 'Last Mile Fueling System.' It's not a silver bullet, but it will make a significant contribution."
• How does GE Oil & Gas and Ferus make this process work: (per GE Oil & Gas website)
"The first step is to remove high-value liquids such as butane and pentane from the natural gas. These liquids can be sold in a secondary open market to increase oil company profitability. The gas is then compressed on site using GE's modular, re-deployable CNG in a Box system. The compressed natural gas (CNG) is loaded into Ferus Natural Gas Fuels' specialized trailers for transportation the final distance, or the "Last Mile," to the point of end-use."
The temperatures in the Bakken region, combined with the terrain and well locations make transportation of the high value liquids and newly-formed CNG no easy task. However, Ferus Natural Gas Fuels has the expertise and equipment needed to make this happen and because of this, the end product is a cleaner, cheaper fueling alternative to diesel and puts flare gas to work in the oilfield by fueling drilling rigs, hydraulic fracturing crews and other oilfield power applications.
• Statoil – First to pilot GE's "CNG in a Box" technology at a Statoil rig just east of Watford City, ND.
"Statoil was the first one deployed and has just left the piloting phase," states Fusacchia. "We'll have at least four more installations before the end of the year that I can speak of at a high level."
Russell Rankin, Williston Regional Manager of Statoil, states in a video "The incentives for Statoil to capture that gas, obviously the revenue, and we want to be able to lessen the impact on the environment, but we don't have the infrastructure with the pipelines in place to be able to capture all of that gas. So, we have to look for alternatives and GE and Ferus have been able to do that."
• Fleet fueling cost savings using CNG:
"North Dakota has some of the highest diesel pricing that I've seen in the country, especially in the winter time when there are required additives for a Type I diesel verses a Type II. Because of the cold the fuel will gel up. We don't have those issues with CNG so your price for CNG stays stable throughout the year. Also in the winter time, diesel can increase in price significantly. There are tremendous savings that can be realized with CNG," states Fusacchia. "This is installation number one of what should be forty to sixty installations at a conservative estimate. I think what we'll see in the next couple of years is a significant build out of infrastructure. It'll snowball, creating a much cheaper and cleaner fueling supply for the entire basin and not just for high horsepower applications but for light duty fleet vehicle use as well."
• Future:
Fusacchia states, "We'll have a significant footprint that covers the entire basin by first quarter of next year. We're really planning to roll this out in a big way and to service the entire basin with not just gas capture service, but also with CNG supply... We're taking flaring, which is looked at right now as a problem - a constraint and rather looking at it as an opportunity and putting together an offering for CNG that takes that problem and turns it into an opportunity to provide fuel and replacement fuel which is cheaper and cleaner burning than diesel fuel."
Stewart Wilson, VP, Commercial Development, Ferus Natural Gas Fuels states in a video on GE's website "Looking to the future, we see opportunity for this solution to be everywhere. There is no reason why all of those drilling rigs can't be running off gas."
Fusacchia wraps up the interview by saying, "It's important to know that CNG is an incredibly viable product for North Dakota. It's a cheap, clean fuel that's here to stay. It'll have a broad coverage for North Dakota as a fuel source. It's a great opportunity that'll be created out of the challenges that operators are seeing."
Numbers to look at – per GE Oil & Gas website
140 Billion Cubic meters of gas, or 5% of the world's gas production, is flared annually
360 Million tons of CO2 emitted annually due to gas flaring
50% Cost savings potential using Last Mile Fueling system vs. diesel fueling
The Last Mile microsite:
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