Statoil, GE and Ferus Natural Gas Fuels Expanding Flare Gas Solution in Bakken
A joint venture of GE (NYSE: GE) and Ferus Natural Gas Fuels (Ferus NGF), along with Statoil, a leader in the oil and gas exploration and production industry, today announced the planned expansion of a pilot project to capture flare gas and use it to power up to six of Statoil’s drill rigs and one frac fleet in North Dakota. The expansion is the first step by Statoil to move into full commercial adoption of the GE and Ferus NGF joint venture’s Last Mile™ Fueling Solution (Last Mile), which is expected to reduce emissions and provide cost-savings and logistics solutions for the company’s Bakken oilfield operations.
Statoil’s Last Mile pilot project has been in place for approximately eight months near Watford City, North Dakota. During this time, it has been capturing natural gas that would otherwise be flared, and has used it instead to assist power for its oil and gas operations. The company anticipates this new commercial expansion will increase its flare gas capture to between 3 and up to 5 million standard cubic feet per day (scfd) by the end of 2014, equating to GHG emissions reductions of between 120,000 and up to 200,000 metric tons per year, or the equivalent of removing between 25,000 up to 45,000 cars from the road.
Lance Langford, Statoil’s vice president for Bakken development and production said, “Not only is Last Mile enabling our company to better comply with the new flaring regulations in North Dakota, but by using this captured natural gas in place of diesel in our drilling and hydraulic fracturing operations, we are further reducing emissions and costs. This is good for profit and the climate. GE and Ferus NGF are offering an innovative solution which gives us the confidence to move from pilot to commercial operations.”
North Dakota’s Bakken is one of the key regions where energy companies are focusing on unconventional oil and gas exploration and production. However, because these emerging oil fields often lack the pipeline infrastructure to store and transport the natural gas produced along with oil, operators are flaring off up to 30 percent—or 300 million cubic feet per day—of the associated natural gas produced in the Bakken field alone.
Last Mile is a joint venture solution between GE Ventures and Ferus NGF to provide a full-service natural gas fueling solution for operators by combining GE’s CNG In A Box™ compressed natural gas-fueling technology and the operational and logistics expertise of Ferus NGF. It helps E&P companies eliminate flaring and monetize previously wasted gas by putting it to work to fuel their own operations and in the local fueling networks. This approach solves an environmental problem and creates a new, clean alternative fuel resource in an infrastructure-constrained region, helping companies meet new gas flaring standards while cutting fuel costs.
Mike Hosford, general manager of GE Oil & Gas’ Distributed Gas Solutions, said, “We are thrilled that Statoil has chosen to expand the use of our Last Mile solution in its oil and gas production activities in the Bakken. Our project with Statoil demonstrates how we can help other operators comply with increasingly strict regulations governing the flaring of gas in the United States and around the world.”
Dick Brown, CEO of Ferus NGF said, “This is an excellent example of how collectively we can help solve a significant industry issue. Thanks to the leadership of Statoil and the partnership approach taken, Last Mile can be rolled out across North Dakota and in other states, contributing significantly to the environment while increasing the competitiveness of our customers.”
GE and Ferus NGF also are in discussions with the other major players in the Bakken region about using the Last Mile system for their operations, with the potential of eliminating another 10 million scfd of flared gas, enough to fuel more than 100 drill rigs in North Dakota.