Statoil Using Natural Gas to Power Rigs -- Maybe This Will Make The F&C Asset Management Folks Happy -- The Bakken, North Dakota, USA

Statoil using natural gas directly from the wellhead to power their rigs. For newbies: Statoil recently bought a Bakken pioneer: BEXP.

Here's the story:

A new use for natural gas flares is making an entrance in the Williston Basin. Diesel engines are being converted to use a diesel and natural gas mixture instead of straight diesel fuel. Eco Alternative Fuel Systems, Inc (ECO AFS). has installed the bi-fuel system on five Statoil rigs in North Dakota, according to Jeff Anderson, Eco AFS regional manager.

By doing the bi-fuel system on the diesel engines and also converting their boiler to operate on natural gas, one rig in one year will save approximately $1 million in diesel costs. Not only that it creates better emissions. It’s a cleaner fuel, and we triple the run time of the diesel they have,” Anderson said.

Anderson said 50-60 percent of the fuel mixture, after conversion, is natural gas. The gas can be piped to the rig from a nearby gas flare or pipeline. It can also be trucked in if no flare is nearby, which will cut down on some of the truck traffic, he said.

“Right now this gas is just the raw gas coming right out of the Bakken formation,” Anderson said.

Link here to an Encana initiative to use natural gas to power drilling rigs in the field. 

The North American natural gas industry is in search of an environmental and economic solution to address significant fuel use. Because natural gas has potential for widespread applications, it is critical that early adopters within the industry help trigger greater use.

With testing and improvements, growing infrastructure and industry-wide collaboration regarding natural gas viability, powering rig operations with natural gas is becoming a reality for several operators–paralleling broader trends in the U.S. transportation sector and the growing movement to convert over-the-road trucks and fleet vehicles from diesel and gasoline to natural gas.

By using this engine technology to fuel drilling rigs, we have the opportunity to make an enormous impact on overall fuel consumption across the United States and on a global level. Encana tested its first natural gas-powered rig in the United States in 2005. With the success of that initial test, we have expanded our portfolio, both in the United States and Canada, with 16 natural gas-powered rigs running this summer in Encana’s field operating areas. Two additional gas-fired rigs are planned by year’s end.

­There are two main types of engine technology used to implement natural gas into our operations. Among the natural gas-powered rigs Encana is operating, six use dual-fuel technology and 10 have dedicated natural gas engines. The source or type of natural gas used as a fuel also varies. Twelve of the rigs use field gas produced from the fields in which they are drilling. Four use liquefied natural gas because of limited natural gas distribution availability in the field, or the need to supply fuel that is highly mobile because of frequent rig moves or short drilling cycles. LNG offers the ability to move rigs outside of an area that is using field gas and provides a high-quality and reliable source of fuel.

Again, new technology being used and studied in the Bakken.

Hopefully this will help make the folks over at F&C Asset Management happy. I doubt it.