By Nick Smith and the Bismarck Tribune
A milestone anticipated for several months has finally been reached, with North Dakota oil production inching over 1 million barrels per day.
Preliminary oil production figures released Tuesday by the North Dakota Department of Mineral Resources put April production at 1,001,149 barrels per day — an increase of nearly 24,000 from the March tally of 977,178 barrels per day.
"Pretty unique territory," Department of Mineral Resources Director Lynn Helms said. North Dakota joins Texas as the only states producing more than 1 million barrels of oil per day. Texas is producing just more than 2 million barrels per day. The Canadian province of Alberta and fewer than 20 countries worldwide have production of more than 1 million barrels per day.
By Jessica Holdman | Orginally published in The Bismarck Tribune
With a new liquefied natural gas plant in the works in Tioga, North Dakota LNG Chief Executive Officer Pat Hughes predicts 50 percent of North Dakota oil drilling rigs will run on natural gas in the next 12 months.
Hughes is hopeful that 100 percent will use natural gas to supplement diesel fuel by the end of 2015, he said Tuesday during the Williston Basin Petroleum Conference.
It was the first day of the conference that runs through Thursday. Organizers are expecting more than 4,000 people to attend.
“When you have people like Nabors Drilling who embrace (natural gas), great things can happen,” Hughes said.
Though most rigs run on a mixture of diesel and natural gas, Hughes told conference-goers Ensign Resource Service Group has some full liquefied natural gas. Those units tend to have less torque than their bi-fuel counterparts. Adding natural gas also makes the rigs’ engines last longer and lowers emissions.
Sixty to 70 rigs in the U.S. now use liquefied natural gas, said Kirt Montague of North Dakota LNG parent company Prairie Companies.
“There are bi-fuel rigs coming into North Dakota,” he said “There are more coming in all the time.”
For those rigs that aren’t already bi-fuel, Williston-based ECO-AFS offers a conversion kit, which takes five days to install and doesn’t shut down production during the process.
liquefied natural gas can displace 50 percent of the diesel fuel needed on a rig. Hughes said using LNG reduces fuel costs by 20 percent compared to running just diesel.
The liquefied natural gas produced by North Dakota LNG will be stored in 16,000- gallon tanks on well sites. Hughes said a rig that runs on 2,000 gallons of diesel fuel would take about 1,700 gallons of LNG per day.
Embracing the use of value- added natural gas projects helps to ensure long-term viability of the Bakken and Three Forks formations, he said.
The Tioga processing facility will be operational near the end of July and will produce 10,000 gallons of liquefied natural gas per day. A planned expansion of the plant will increase the capacity to 66,000 gallons by early 2015. More expansion could take place if necessary, Hughes said.
The plant is near Hess Corp.’s Tioga gas plant and uses the plant’s methane for its LNG production.
The company can’t put a plant on one well to reduce flaring; it needs a larger scale. What the plant does do is create a better market for natural gas, Hughes said.
“The ultimate answer to reducing flaring is a use-based industry of natural gas products,” Hughes said.
Chad Wocken, senior research manager for the Energy and Environmental Research Center in Grand Forks, said the LNG plant could stimulate more demand for compressed and liquefied natural gas in the Williston Basin. That may help smaller-scale companies providing compressed natural gas and liquefied natural gas on well sites, he said.
“The broader distribution for fuel supply and customers willing to buy right now doesn’t really exist,” he said.
Wocken said LNG, CNG and natural gas liquid capturing are the best near-term technologies for reducing flaring.
Oil companies sometimes flare, or burn off, natural gas where it’s found rather than gathering it and processing it for the market. Nationwide, around 1 percent of natural gas is flared according to the U.S. Energy Department.
Just 274 wells accounted for around 60 percent of all flaring of natural gas in North Dakota in December, Wocken said.
In March, the latest month for which figures are available, North Dakota’s oil wells flared 33 percent of natural gas they produced. In December, North Dakota’s flaring rate matched an all-time high at 36 percent.
Wocken said that while between 200 and 300 wells are responsible for the bulk of the state’s flaring every month, it’s not always the same wells producing the large amounts of gas. The amount of gas produced by a well can shift dramatically over the course of a well’s life.
To make an impact on overall flaring, Wocken said, gas-capturing technology needs to be mobile so it can get to the wells that are producing the most gas.
(The Associated Press contributed to this report.)
Bismarck, North Dakota (May 7, 2014) - North Dakota LNG, LLC (NDLNG), the newest member of Prairie Companies, LLC’s, portfolio of oil and gas service businesses, today joined North Dakota Governor Jack Dalrymple and other state officials at an event in the State Capitol Building to announce the arrival of a liquefied natural gas (LNG) production facility. Located in Tioga, North Dakota, the plant will be the first-to-market in the state to produce 10,000 gallons per day (GPD) starting in Summer 2014. A phase two facility is scheduled to be operational in the fourth quarter of 2014 and capable of producing 66,000 GPD. NDLNG targets the drilling, fracking and transportation sectors of the unconventional oil and gas industry and will help meet the need for a cost-effective power source by converting natural gas feedstock into value-added liquid fuels.
“North Dakota LNG is proud to announce it will be the first LNG liquefaction plant in operation for North Dakota,” said Patrick Hughes, Chief Executive Officer, North Dakota LNG. “This historic venture will allow NDLNG to quickly provide oil and gas operators in the Bakken and across North Dakota with a cost-effective and reliable source of alternative fuel, thereby reducing operating expenses, while also creating new markets for value-added natural gas fuel produced in the State.”
“This is an exciting day for North Dakota. NDLNG’s state-of-the-art processing facility will play an important role in efforts to convert natural gas feedstock into value-added liquid fuels, foster more cost-effective unconventional shale development operations and support our nation’s desire to reduce its dependence on foreign fuel sources,” said Jack Dalrymple, Governor of North Dakota. “We appreciate NDLNG’s investment in our state’s energy industry and support them in their venture to move North Dakota’s rich natural gas resources to market”.
Currently, operators producing oil and gas from unconventional reservoirs in the Bakken face high fuel costs and environmental scrutiny from their use of diesel-powered equipment and flaring of natural gas generated by their drilling activities. Therefore, significant demand exists for locally produced LNG derived from North Dakota’s abundant natural gas reserves that will help operators not only reduce energy costs but also lower carbon emissions.
NDLNG will also offer North Dakota’s agricultural industry an alternative fuel choice to propane. Leveraging LNG will garner farmers and ranchers lower operating costs, reduced emissions, and the ability to use a 100 percent locally produced fuel.
“Speaking on behalf of the operator community in North Dakota, this is the type of innovative, entrepreneurial thinking we need to help meet our flaring capture goals in the Bakken…it’s a great idea," said Ron Ness, President, North Dakota Petroleum Council.
NDLNG has positioned itself as the first-in-the-market to provide a quick and cost-effective end-to-end solution to meet the demand for LNG. NDLNG will deliver significant benefits to its customers due to the company’s ability to:
“Slawson Exploration Company supports the development of alternative fuel solutions such as LNG that will provide immediate cost relief for rig operations,” said Todd Slawson, President, Slawson Exploration Company, Inc. “We support NDLNG in this vital initiative and look forward to converting our rigs to utilize their LNG product.”
Plum Energy, a pioneer and leader in the development of small-scale LNG value chains for industrial and transportation markets, will manage development of the project as well as initial operations of the LNG production facility. SST Process Solutions, led by a highly experienced management team, has been selected as the technology provider for the liquefaction equipment.
“We are delighted to assist in bringing cleaner burning, lower cost and locally produced LNG into the North Dakota market,” said Kirt Montague, Chief Executive Officer, Plum Energy. “Not only will this project materially reduce fuel costs for operators and other businesses in the State, but it also will meaningfully lower levels of harmful emissions, while providing long-term, wage-scale jobs and employment opportunities in the region.”
NDLNG has entered into a contract with Hess Corporation (NYSE: HES) to receive residue gas as a natural gas feedstock for NDLNG’s Tioga LNG liquefaction facility.
NDLNG, its executives and project partners will have an active presence at the 22nd Annual Williston Basin Petroleum Conference taking place May 20-22, 2014 at the Bismarck Civic Center in Bismarck, ND. Hughes is scheduled to speak on the topic of LNG-powered rigs at 1:55 p.m. CT on May 20, 2014 and Prairie Companies and NDLNG will be exhibiting on the show floor in booths 607 and 608.
About North Dakota LNG
Headquartered in Tioga, North Dakota, North Dakota LNG (NDLNG) is a supplier of liquefied natural gas (LNG) targeting the drilling, fracking and transportation sectors of the unconventional oil and gas industry in the Bakken. A true end-to-end offering, NDLNG provides turn-key alternative fuel solutions for customers at any point in the LNG logistics supply chain, resulting in lower costs and reduced environmental impact. NDLNG was co-founded by Prairie Companies and EverStream Energy Capital Management, LLC. EverStream provides capital to the rapidly expanding LNG and CNG markets through equipment leases and other investments in specialized segments of the natural gas market, including production, storage and transportation assets that facilitate the increased use of clean burning, low cost natural gas. For more information, visit www.northdakotalng.com.