LNG For Exploration & Production - Drilling Operations - Case Study

Use of gas in drilling actually began several years before (2010) use of gas in frac operations (2013). The scope of a rig retrofit with three (3) engines vs. 12-20 engines on a frac spread is one major reason why drilling innovated with natural gas before frac operations. At one time (mid-2014) there were over 100 drilling rigs employing natural gas either in a dual fuel configuration with existing diesel engines or with all gas engines. It is noteworthy that current dual fuel diesel engines will not meet EPA Tier IV off-road emissions requirements without the addition of scrubbing or exhaust gas recirculation equipment which tends to reduce output and efficiency of the base diesel engine design. A 100% dedicated gas rig will meet these guidelines and produces 70% less NOx and 95% less particulate matter than current diesel technology. Since late 2010, Stabilis Energy has supplied LNG and turnkey services to 52 different drill rigs, with over 1510 wells drilled utilizing LNG…and without incident.

Challenge:

The client is a major operator in the Marcellus and Utica Shale basins and has been a clear leader in the adoption of natural gas for drilling and fracturing operations. In early 2013, the client contracted for 13 new 100% gas drilling rigs to be deployed in the Marcellus/Utica region. To focus its full effort in this region, the client dropped all of its diesel rigs and pulled out of the Rocky Mountains entirely. All 13 rigs were equipped with new “rich-burn” engines that could run on either vaporized LNG or, ultimately, field gas, even when the field gas was “wet” (high in heating value (up to 1,450 Btu/scf)). The challenge was that all rigs initially ran on vaporized LNG until the field gas infrastructure was developed. In addition, LNG supply and equipment reliability had to be ultra-high, as these rigs were truly 100% gas-fueled (1).

STABILIS Solution:

Fortunately, as the leader in supplying gas to drill rigs, Stabilis had already deployed 100% LNG solutions for drilling contractors and operators in the Denver, Gulf Coast, Haynesville Shale, Marcellus Shale, Powder River, Uinta, and Ventura basins (2). As such, Stabilis had designed a third-generation mobile LNG storage/vaporization solution and had placed a large, multi-unit order that largely coincided with the rig deployment schedule of the Marcellus/Utica operator. Rolling out so many units over a short period was a significant challenge.

Results:

Stabilis began deploying equipment and labor in July of 2013 and at one time (early 2014) was supplying LNG, equipment and labor to 10 dedicated gas rigs simultaneously in the Marcellus/Utica basins. For the subject operator, over three years of operation (2013-2015), Stabilis never allowed even one of its LNG tanks to run empty. We continuously operated our equipment and improved its on-stream reliability, with rates of 99.17%, 99.76% and 99.83% for each of the respective calendar years.

1. Other drill rig designs typically utilized two gas engines with a third diesel engine as backup.
2. Stabilis was the first company to supply gas to a dedicated gas rig, working with Encana in the Haynesville Shale basin beginning in August of 2010.