American Oil and Gas Reporter - March 2020 - 57

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SpecialReport: Field Power Generation
Such solutions do exist. One example
is using field gas to fuel on-site electric
generators to power artificial lift and production equipment. But going one step
further, it is now possible to deliver an
entire modular LNG gas capture, processing, liquefaction and transportation
solution with each module comfortably
delivered by truck. Occupying a small
site footprint and capable of producing
LNG within hours, mobile solutions can
be utilized wherever there is road access
and negate the need for gathering pipelines.
The produced LNG then can be used onsite for power generation or delivered by
road direct to end-users, creating a virtual
pipeline to market.
Requiring minimal investment from
well owners, the process provides a viable
new economic alternative to venting and
flaring, reduces emissions and gives producers a new revenue stream. These outcomes are the result of the powerful combination of well-designed and defined
market rules with innovative modular
LNG technology.
Application Areas
There are three shale plays where mobile LNG technology is being applied
today to monetize stranded gas: the Marcellus and Utica in Pennsylvania; the
Bakken in North Dakota, and the Permian
in Texas and New Mexico.
The largest market at present is the
traditional East Coast utility market,
where LNG is used for peaking fuel
during periods of high demand in the
heating season from early November
through the end of March. This winter
has seen unseasonably warm temperatures,
but there is only so much capacity available
on pipelines, and normally utilities use
LNG to handle peak loads during periods
of high demand.
Advanced mobile LNG technology
initially was developed to take advantage
of shut in or stranded Marcellus gas that
had no pipeline availability to deliver
natural gas into existing infrastructure.
State-of-the-art cryogenic modules can
be placed at the wellhead or multiwell
pad to liquefy dry gas. The LNG then
can be shipped by truck direct to utilities
or other existing LNG facilities without
having to build out connections to a
pipeline delivery network.
In the Bakken, a mobile LNG facility
is under construction that will set cryogenic boxes at a flare stack to convert
gas that is being flared into LNG. The

LNG then will be delivered off site and
revaporized to displace diesel with natural
gas in drilling and fracturing operations.
From a macro standpoint, by converting
into LNG a commodity that has zero
value (it actually represents a cost center
because it must be flared) and delivering
it to a drilling rig or frac fleet, it can
reduce diesel fuel usage and emission
from both flaring and diesel exhaust
stacks significantly.
Mobile LNG systems give the producer
a rare opportunity to monetize a wasted
production stream while reducing emissions and achieving fuel cost savings. In
the Bakken project, the produced LNG
is expected to displace 50% of the diesel
fuel now being consumed in field operations. It is a win-win deal. Environmentally,
it turns off a flare stack and provides an

economic application for stranded associated gas. At the well site, diesel fuel
costs and emissions are literally cut in
half.
In both the Midland and the Delaware
basins, mobile LNG applications also are
aimed primarily at shutting off flare stacks
and reducing diesel fuel usage. In the
Permian, the rapid expansion of gas output
has left producers with stranded and shutin gas, or backed-up gas that is constrained
by pipeline take-away capacity. As in the
Bakken, mobile LNG systems can be
quickly set up to allow the LNG to be
trucked to a regasification unit at a drilling
rig, mud pumps or electric fracturing
units to displace diesel fuel consumption.
The benefits cover all the bases, from
saving the producer money to protecting
the environment.
r

MARK
CASADAY

Mark Casaday is chief executive officer of Edge LNG LLC, which provides smallscale modular LNG technology. A veteran of the U.S. natural gas industry, he has more
than three decades of experience in gathering, processing and distribution companies.
Casaday has held leadership positions in leading North American gas companies such
as Niska Gas Storage Partners, Penn Octane Corporation and Mainline Energy Partners. He holds a B.S. in accounting from Washington and Jefferson College, and a B.S.
in petroleum and natural gas engineering from Pennsylvania State University.

Devon Energy, Dow OK STACK Well Agreement
OKLAHOMA CITY-Devon Energy
Corp. and Dow are working jointly on
Devon's STACK acreage in Central Oklahoma. Under the agreement, Devon will
monetize half of its working interest in
133 undrilled locations in exchange for a
$100 million drilling carry over the next
four years. Devon says the average working interest is estimated at 60% across a
mix of standard and extended-reach lateral
locations.
In addition to the benefits of a drilling
carry, Devon says its returns associated
with this agreement are expected to be
enhanced by lower well costs from focused
infill development drilling and midstream

incentive rates that lower per-unit operating
costs for each new well brought on line.
Devon says it expects no change to its
production targets or capital spending
outlook in 2020 as a result of this agreement. It adds 2020 activity will start with
developing two drilling units in northern
Canadian County, Ok., with drilling expected to commence midyear.
"This innovative agreement is consistent with our strategy to optimize the
capital efficiency and returns associated
with our development programs," says
Dave Hager, Devon's president and chief
executive officer.
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MARCH 2020 57

American Oil and Gas Reporter - March 2020

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