Lessons Learned from Natural Gas STAR Partners A NaturalGasfX EP* KKLUTION PREVENTER ' Reduced Emissions Completions Executive Summary High prices and high demand for natural gas have provided incentive for the natural gas production industry to develop more technologically challenging (and therefore more expensive) unconventional gas reserves such as tight sands, shale and coalbed methane. Completion of new wells and re-working (workover) of existing wells in these tight formations typically involve hydraulic fracturing of the reservoir to increase well productivity. Industry reports that hydraulic fracturing is beginning to be performed in conventional gas reservoirs as well. Removing the water and excess proppant (generally sand) during completion and well clean-up may result in significant releases of natural gas and therefore methane emissions to the atmosphere. The U.S. Inventory of Greenhouse Gas Emissions and Sinks 1990 - 2010 estimates that 68 billion cubic feet (Bcf) of methane are vented or flared from unconventional completions and workovers. Reduced emissions completions (RECs) - also known as reduced flaring completions or green completions — is a term used to describe an alternate practice that captures gas produced during well completions and well workovers following hydraulic fracturing. Portable equipment is brought on site to separate the gas from the solids and liquids produced during the high-rate flowback, and produce gas that can be delivered into the sales pipeline. RECs help to reduce methane, VOC, and HAP emissions during well cleanup and can eliminate or significantly reduce the need for flaring. RECs have become a popular practice among Natural Gas STAR production partners. A total of thirteen different partners have reported performing reduced emissions completions in their operations. RECs have become a major source of methane emission reductions since 2000. Between 2000 and 2009 emissions reductions from RECs (as reported to Natural Gas STAR) have increased from 200 MMcf (million cubic feet) to over 218,000 MMcf. Capturing an additional 218,000 MMcf represents additional revenue from natural gas sales of over $1.5 billion from 2000 to 2009 (assuming $7/Mcf gas prices). Technology Background High demand and higher prices for natural gas in the U.S. have resulted in increased drilling of new wells in more (Continued on page 2) Economic and Environmental Benefits Method for Reducing Natural Gas Losses Purchased REC Equipment Annual Program Volumeof Additional Implemen- aura as Value of Natural Gas Savings ($) Savings tation Cost (Mcf) $3 per Mcf 270,000 per Vear $810,000 per year $5 per Mcf $1,350,000 per year W W $7 per Mcf $175,000 $50Q OOQ $1,890,000 per year per year CostsTs) Payback (Months) $3 per $121,250 Mcf 6 $5 per Mcf 4 $7 per Mcf 3 Incremental REC Contracted Service 10,800 per completion $3 per Mcf $5 per Mcf $7 per Mcf $32,400 per $54,000 per $75,600 per completion completion completion $6,930 per completion $32,400 $600 per completion $3 per Mcf Imme- diate $5 per Mcf Imme- diate General Assumptions: '" Assuming 9 days per completion, 1,200 Mcf gas savings per day per well, 11 barrels of condensate recovered per day per well, and cost of $3,600 per well per day for contracted services. b Assuming $70 per barrel of condensate. c Based on an annual REC program of 25 completions per year. $7 per Mcf Imme- diate ------- Reduced Emissions Completions (Cont'd) (Continued from page 1) expensive and more technologically challenging unconventional gas reservoirs, including those in low porosity (tight) formations. These same high demands and prices also justify extra efforts to stimulate production from existing wells in tight reservoirs where the down-hole pressure and gas production rates have declined, a process known as well workovers or well-reworking. In both cases, completions of new wells in tight formations and workovers of existing wells, one technique for improving gas production is to fracture the reservoir rock with very high pressure water containing a proppant (generally sand) that keeps the fractures "propped open" after water pressure is reduced. Depending on the depth of the well, this process is carried out in several stages, usually completing one 200- to 250-foot zone per stage. These new and "workover" wells are completed by producing the fluids at a high rate to lift the excess sand to the surface and clear the well bore and formation to increase gas flow. Typically, the gas/liquid separator installed for normal well flow is not designed for these high liquid flow rates and three-phase (gas, liquid and sand) flow. Therefore, a common practice for this initial well completion step has been to produce the well to a pit or tanks where water, hydrocarbon liquids and sand are captured and slugs of gas vented to the atmosphere or flared. Completions can take anywhere from one day to several weeks during which time a substantial amount of gas may be released to the atmosphere or flared. Testing of production levels occurs during the well completion process, and it may be necessary to repeat the fracture process to achieve desired production levels from a particular well. Natural gas lost during well completion and testing can be as much as 25 million cubic feet (MMcf) per well depending on well production rates, the number of zones completed, and the amount of time it takes to complete each zone. This gas is generally unprocessed and may contain volatile organic compounds (VOCs) and hazardous air pollutants (HAPs) along with methane. Flaring gas may eliminate most methane, VOC and HAP emissions, but open flaring is not always a preferred option when the well is located near residential areas or where there is a high risk of grass or forest fires. Moreover, flaring may release additional carbon dioxide and other criteria pollutants (SOx, NOx, PM and CO) to the atmosphere. Natural Gas STAR partners have reported performing RECs that recover much of the gas that is normally vented or flared during the completion process. This involves installing portable equipment that is specially designed and sized for the initial high rate of water, sand, and gas flowback during well completion. The objective is to capture and deliver gas to the sales line rather than venting or flaring this gas. Sand traps are used to remove the finer solids present in the production stream. Plug catchers are used to remove any large solids such as drill cuttings that could damage the other separation equipment. The piping configuration to the sand traps is critical as the abrasion from high (Continued on page 3) Exhibit 1: Reduced Emissions Completion Equipment Layout To Dehydrator or Sales Line Sand Trap Wellhead Reserve Impoundment or Tanks Adapted from BP. ------- Reduced Emissions Completions (Cont'd) (Continued from page 2) velocity water and sand can erode a hole in steel pipe elbows, creating a "washout" with water, sand, hydrocarbon liquids and gas in an uncontrolled flow to the pad. Depending on the gas gathering system, it may be necessary to dehydrate (remove water from) the produced gas before it enters the sales pipeline. The gas may be routed to the permanent glycol unit for dehydration or a portable desiccant/glycol dehydrator used for dehydration during the completion process. Free water and condensate are removed from the gas in a three phase separator. Condensate (liquid hydrocarbons) collected during the completion process may be sold for additional revenue. Temporary piping may be used to Exhibit 2: Alternate Completion Procedures Energized Fracturing. Based on Natural Gas STAR partner experiences, RECs can also be performed in combination with energized fracturing, wherein inert gas such as CO 2 or nitrogen is mixed with the frac water under high pressure to aid in expelling frac water from pores in the fractured formation. The process is generally the same with the additional consideration of the composition of the flowback gas. The percent of inert gases in the flowback gas is, at first, unsuitable for delivery into the sales line. As the fraction of inerts decreases, it may be possible to recover the gas economically. A portable membrane acid gas separation unit can further increase the amount of methane recovered for sales after a CC>2 energized fracture. Compression. In low pressure (i.e. low energy) reservoirs RECs are often carried out with the aid of compressors to gas lift the water column up the tubing string and/or boost the gas recovered in the REG separator into the sales line. Gas lift is accomplished by withdrawing gas from the sales line to route down the well casing and push the frac fluids up the tubing. This gas becomes part of the normal flowback that can be recovered during an REG. When the gas recovered in the REG separator is lower pressure than the sales line, some companies are experimenting with a compressor to boost flowback gas into the sales line. This technique is experimental because of the difficulty operating a compressor on widely fluctuating flowback rate. Coal bed methane well completion is an example where additional compression might be required. connect the well to the REC skid and gathering system if the permanent piping is not yet in place. Exhibit 1 shows a typical layout of temporary REC portable equipment, and Exhibit 2 explains some alternate, emerging, and/or experimental procedures for a well completion and REC. The equipment used during RECs is only necessary for the time it takes to complete the well; therefore, it is essential that all the equipment can be readily transported from site Exhibit 3: Truck Mounted Reduced Emissions Completion Equipment Source: Weatherford to site to be used in a number of well completions. A truck mounted skid, as shown in Exhibit 3, is ideal for transporting the equipment between sites and is large enough to carry all the necessary equipment. In a large basin that has a high level of drilling activity it may be economic for a gas producer to build their own REC skid. Most producers may prefer contracting a third party service to perform completions. When using a third party to perform RECs, it is most cost effective to integrate the scheduling of completions with the annual drilling program. Well completion time is another factor to consider for scheduling a contractor for RECs. Some well completions, such as coal bed methane, may take less than a day. On the other hand, completing wells which fracture various zones, such as shale gas wells, may take several weeks to complete. For most wells, it takes about 3 to 10 days to perform a well completion following a hydraulic fracture, based on partner experiences. (Continued on page 4) ------- Reduced Emissions Completions (Cont'd) (Continued from page 3) Economic and Environmental Benefits * Gas recovered for sales * Condensate recovered for sales * Reduced methane emissions * Reduced loss of a valuable hydrocarbon resource through venting and flaring of gas * Reduced emissions of criteria and hazardous air pollutants Emissions from well completions can contribute to a number of environmental problems. Direct venting of VOCs can contribute to local air pollution, HAPs are deemed harmful to human health, and methane is a powerful greenhouse gas that contributes to climate change. Where it is safe, flaring is preferred to direct venting because methane, VOCs, and HAPs are combusted, lowering pollution levels and reducing global warming potential (GWP) of the emissions as C02 from combustion has a lower GWP than methane. RECs allow for recovery of gas rather than venting or flaring and therefore reduce the environmental impact of well completion and workover activities. Reduced emissions completions bring economic benefits as well as environmental benefits. The incremental costs associated with the rental of third party equipment for performing RECs can be offset by the additional revenue from the sale of gas and condensate. As this technology is being perfected and equipment becomes commonplace, the revenues in gas and condensate sales often exceed the incremental costs. Decision Process Step 1: Evaluate candidate wells Step 2: Determine costs Step 3: Estimate savings Step 4: Evaluate economics Decision Process Step 1: Evaluate candidate wells for Reduced Emissions Completions. When setting up an annual ^^^^^^^_^^^^^^^_ RECs program it is important to examine the characteristics of the wells that are going to be brought online in the coming year. Wells in conventional reservoirs that do not require a reservoir fracture (frac job) and will produce readily without stimulation can be cleared of drilling fluids and connected to a production line in a relatively short period of time with minimal gas venting or flaring, and therefore usually do not economically justify REG equipment. Wells that undergo energized fracture using inert gases require special considerations because the initial produced gas State and Local Regulations The States of Wyoming and Colorado have regulations requiring the kimplementation of "flareless completions". Operators of new wells in this region are required to complete wells without flaring or venting. These completions have reduced flaring by 70 to 90 percent. For more information, visit: http://deq.state.wy.us/ captured by the REG equipment would not meet pipeline specifications due to the inert gas content. However, as the amount of inerts decreases, the quality of the gas might be sufficient to meet pipeline specifications. In the case of C02 energized fracks, the use of portable acid gas removal membrane separators will improve gas quality and make it possible to direct gas to the pipeline (see Case Studies section for more information). Exploratory and delineation wells in areas that do not yet have sales pipelines in close proximity to the wells are not candidates for RECs as the infrastructure is not in place to receive the recovered gas. In depleted or low pressure fields with low energy reservoirs, implementing a RECs program would most likely require the addition of compression to overcome ^^^^^^^^^^^^^^^^^^_ the sales line pressures- an approach that is still under development and may add significant cost to implementation. Selecting a Basis for Costs and Savings * Estimate the number of • producing gas wells that will be drilled in the next year Evaluate well depth and reservoir characteristics Determine whether additional equipment is necessary to bring recovered gas up to pipeline specifications Estimate time needed for each completion Wells that require hydraulic fracturing to stimulate or enhance gas production may need a lengthy completion, and therefore are good candidates for RECs. Lengthy completions mean that a significant amount of gas may be vented or flared that could potentially be recovered and sold for additional revenue to justify the additional cost of a REG. If newly drilled wells are in close proximity, they (Continued on page 5) ------- Reduced Emissions Completions (Cont'd) (Continued from page 4) could share the REG equipment to minimize transport, set- up, and equipment rental costs. Step 2: Determine the costs of a REC program. Most Natural Gas STAR partners report using third party contractors to perform RECs on wells within their producing fields. It should be noted that third party contractors are also often used to perform traditional well completions. Therefore, the economics presented deal with incremental costs to carry out RECs versus traditional completions. Generally, the third party contractor will charge a commissioning fee for transporting and setting up the equipment for each well completion within the operator's producing field. Some RECs vendors have their equipment mounted on a single trailer while others lay down individual skids that must be connected with temporary piping at each site. The incremental cost associated with transportation between well sites in the operator's field and connection of the REC equipment within the normal flowback piping from the wellhead to an impoundment or tank is generally around $600/completion. In addition to the commissioning fee, there is a daily cost for equipment rental and labor to perform each REC. As mentioned above, when evaluating the costs of well completions, it is important to consider the incremental cost of a REC over a traditional completion rather than focusing on the total cost. REC vendors and Natural Gas STAR partners have reported the incremental cost of equipment rental and labor to recover natural gas during completion ranging from $700 to $6,500/day over a traditional completion. Equipment costs associated with REC's will vary from well to well. High production rates may require larger equipment to perform the REC and will increase costs. If permanent equipment such as a glycol dehydrator is already installed at the well site, REC costs may be reduced as this equipment can be used rather than bringing a portable dehydrator on-site, assuming the flow- back rate does not exceed the capacity of the equipment. Exhibit 4: One-time Transportation and Incremental Set-up Costs $600 per well Typical Costs for Incremental REC Equipment Rental and Labor Costs $700 to $6,500 per day RECs Well Clean-up Time 3 to 10 days Some operators report installing equipment that can be used in the RECs as a normal part of wellhead equipment, such as oversized three-phase separators, further reducing incremental REC costs. Well completions usually take between 1 to 30 days to clean out the well bore, complete well testing, and tie into the permanent sales line. Wells requiring multiple fractures of a tight formation to stimulate gas flow may require additional completion time. Exhibit 4 shows the typical costs associated with undertaking a REC at a single well. For low energy reservoirs, gas from the sales line may be routed down the well casing to create artificial gas lift, as mentioned in Exhibit 2. Depending on the depth of the well, a different quantity of gas will be required to lift the fluids and clean out the well. Using average reservoir (Continued on page 7) Exhibit 5: Sizing and Fuel •.I M n u /•« Pressure Required to Lift Fluids • well Depth (ft) . . . 3,000 5,000 8,000 10,000 a Based on sales line pressures between 1,319 + Sales line pressure 2,323 + Sales line pressure 3,716 + Sales line pressure 4,645 + Sales line pressure 100 — 1,000 psig. Consumption for Booster Compressor Gas Required to Lift Fluids (Mcf)a 195-310 315-430 495 — 610 615 — 730 Compressor Size (horsepower)3 195 — 780 400 — 1,500 765 - 2,800 1,040 — 3,900 Compressor Fuel Consumption (Mcf/hr)a 2-7 3-13 7-24 9 — 33 ------- Reduced Emissions Completions (Cont'd) Exhibit 6: Example Cost Calculation of a 25 Well Annual REC Program Given: W = Number of completions per year D = Well depth in feet (ft) Ps = Sales line pressure in pounds per square inch gauge (psig) Ts = Time required for transportation and set-up (days/well) Tc = Time required for well clean-up (days/well) O = Operating time for compressor to lift fluids (hr/well) F = Compressor fuel consumption rate (Mcf/hr) G = Gas from pipeline routed to casing to lift fluids (Mcf/well), typically used on low energy reservoirs Cs = Transportation and set-up cost ($/well) Ce = Equipment and labor cost ($/day) Pg = Sales line gas price ($/Mcf) W = 25 wells/yr D = 8000ft PS = 100 psig Ts = 1 day/well Tc = 9 days/well O = 24 hr/well F = 10 Mcf/hr G = 500 Mcf/well (See Exhibit 4) Cs = $600/well Ce = $2,000/day Ps = $7/Mcf Calculate Total Transportation and Set-up Cost - CTs CTS = W*CS ds = 25 wells/yr * $600/well CTS=$15,000/yr Calculate Total Equipment Rental and Labor Cost - CEL CEL = W * (Ts + T0) * Ce CEL = 25 wells/yr * (1 day/well + 9 days/well) * $2,000/day CEL = $500,000/yr Calculate Other Costs - C0 C0 = W * [(O * F) + G] * Pg C0 = 25 wells/yr * [( 24 hr/well * 10 Mcf/hr) + 500 Mcf/well] * $7/Mcf C0 = $129,500/yr Total Annual REC Program Cost - CT CT = $15,000/yr + $500,000/yr + $129,500/yr CT = $644,500/yr ------- Reduced Emissions Completions (Cont'd) (Continued from page 5) depths for major US basins and engineering calculations, Exhibit 5 shows various estimates of the volume of gas required to lift fluids for different well depths. A REG annual program may consist of completing 25 wells/year within a producer's operating region. Exhibit 6 shows an estimate of typical REG program costs. Step 3: Estimate Savings from RECs. Gas recovered from RECs can vary widely because the amount of gas recovered depends on a number of variables such as reservoir pressure, production rate, amount of fluids lifted, and total completion time. Exhibit 7 shows the range of recovered gas and condensate reported by Natural Gas STAR partners. Partners also have reported that not all the gas that is produced during well completions may be captured for sales. Fluids from high pressure wells are often routed directly to the frac tank in the initial stages of completion as the fluids are often being produced at a rate that is too high for the REG equipment. Where inert gas is used to energize the frac, the initial gas production may have to be flared until the gas meets pipeline specifications. Alternatively, a portable acid gas membrane separator may be used to recover methane rich gas from C02. As the flow rate of fluids drops and gas is encountered, backflow is then switched over to the REC equipment so that the gas may be captured. Gas compressed from the sales line to lift fluids will also be recovered in addition to the gas produced from the reservoir. The volume of gas needed to lift fluids can be estimated based on the well depth and sales line pressure. Gas saved during RECs can be translated directly into methane emissions reductions based on the methane content of the produced gas. Nelson Price Indexes In order to account for inflation in equipment and operating & maintenance costs, Nelson-Farrar Quarterly Cost Indexes (available in the first issue of each quarter in the Oil and Gas Journal) are used to update costs in the Lessons Learned documents. The "Refinery Operation Index" is used to revise operating costs while the "Machinery: Oilfield Itemized Refining Cost Index" is used to update equipment costs. To use these indexes in the future, simply look up the most current Nelson- Farrar index number divide that by the February 2011 Nelson-Farrar index number, and, finally, multiply by the appropriate costs in the Lessons Learned. Exhibit 7: Ranges of Gas and Condensate Savings Produced Gas Savings (Mcf/day/well) 500 to 2,000 Gas-Lift Savings (Mcf/well) See Exhibit 4 Condensate Savings (bbl/day/well) Zero to several hundred In addition to gas savings, valuable condensate may also be recovered from the REC three-phase separator. The amount of condensate that can be recovered during a REC is dependent on the reservoir conditions and fluid compositions. Condensate may also be lost if fluids are produced directly to the frac tank before switching to the REC equipment. Exhibit 8 shows typical values of gas and condensate savings during the REC process. Step 4: Evaluate REC economics. The example application of an REC program to 25 wells within a producing field can yield a total theoretical revenue of $2,152,500 based on the assumptions listed above from the sale of natural gas and condensate. Equipment rental, labor, and other costs associated with implementing this program are estimated to be only $644,500 (see Exhibit 5) resulting in an annual theoretical profit of $1,508,000. To maintain a profitable REC program, it is important to move efficiently from well to well within a producing field so that there is little down time when paying for equipment rental and labor. Other factors that affect the profitability of an REC program include the amount of condensate recovery and sales price, the need for additional compressors, the amount of gas recovered, and sales price. Exhibit 9 shows a five year cash flow projection for carrying out a 25 well per year REC program. In this example, the equipment necessary to perform RECs has been purchased by the operator rather than using a third party contractor to perform the service. The capital cost of a simple REC set-up without a portable compressor has been reported by British Petroleum (BP) to be $500,000. (Continued on page 9) ------- Reduced Emissions Completions (Cont'd) Exhibit 8: Savings of a 25 Well Annual REC Program Given: W = Number of completions per year D = Well depth in feet (ft) PS = Sales line pressure in pounds per square inch gage (psig) Sp = Produced gas savings (Mcf/day) Tc = Time recovered gas flows to sales line in days (days/well) Sc = Condensate savings (bbl/well) G = Gas used to lift fluids (Mcf/well), typically used on low energy reservoirs Pg = Sales line gas price ($/Mcf) PI = Natural gas liquids price ($/bbl) W = 25 wells/yr D = 8000ft PS = 100 psig Sp = 1,200 Mcf/day Tc = 9 days/well Sc = 100 bbl/well G = 500 Mcf/well (See Exhibit 4) Pg = $7/Mcf PI = $70/bbl Calculate Produced Gas Savings SPG = W * (Sp * T0) * Pg SPG = 25 wells/yr * (1,200 Mcf/day * 9 days/well) * $7/Mcf SpG = $l,890,000/yr Calculate Other Savings S0 = W * [(G * Pg) + (So * Pi)] S0 = 25 wells/yr * [(500 Mcf/well * $7/Mcf) + (100 bbl/well * $70/bbl)] S0 = $262,500/yr Total Savings - ST ST = SPG + So ST = $l,890,000/yr + $262,500/yr ST = $2,152,500/yr ------- Reduced Emissions Completions (Cont'd) (Continued from page 7) Purchasing a REG set-up will eliminate equipment rental costs and leave labor and transportation as the only operating costs for the duration of the program. The economics for this example are quite favorable and feature a very high net present value and rate of return. Producers with high levels of localized drilling and workover activity may benefit from constructing and operating their own REG equipment. As illustrated above, even though large capital outlay is required to construct a REG skid, a high rate of return can be achieved if the equipment is in continuous use. If the operator is unable to keep the equipment busy on their own wells, they may contract it out to other operators to maximize usage of the equipment. When assessing REG economics, the gas price may influence the decision making process; therefore, it is important to examine the economics of undertaking a REG (Continued on page 10) Exhibit 10: Gas Price Impact on Economic Analysis of Hypothetical 25 Well Annual REC Program with Purchased Equipment 1 Gas Price | Total Savings Payback (months) IRR r™, $3/Mcf $985,000 7 172% $2,522,084 $5/Mcf $1,525,000 5 280% $4,383,015 $7/Mcf $2,065,000 4 389% $6,243,947 $8/Mcf $2,335,000 3 443% $7,174,413 $10/Mcf $2,875,000 3 551% $9,035,345 Exhibit 9: Economics for Hypothetical 25 Well Annual REC Program with Purchased Equipment IYear 0 Year 1 Volume of Natural Gas Savings ,7n mn (Mcf/yr)a ^/u,uuu Value of Natural Gas Savings 1 SQn nnn ($/year)a i,asu,uuu Additional Savings ($/yr)a 175,000 Set-up Costs ($/yr)b (15,000) Equipment Costs ($)b (500,000) Labor Costs ($/yr)c (106,250) (Net Annual Cash Flow ($) (500,000) 1,943,750 a See Exhibit 7. "See Exhibit 5. c Labor costs for purchased REC equipment estimated as 50% of Equipment d Net present value based on 10% discount rate over five years. Year 2 Year 3 270,000 270,000 1,890,000 1,890,000 175,000 175,000 (15,000) (15,000) (106,250) (106,250) 1,943,750 1,943,750 Year 4 270,000 1,890,000 175,000 (15,000) (106,250) 1,943,750 YearS 270,000 1,890,000 175,000 (15,000) (106,250) 1,943,750 Internal Rate of Return = 389% NPV (Net Present Value)d= $6,243,947 Payback Period = 3 months Rental and Labor costs in Exhibit 3. ------- Reduced Emissions Completions (Cont'd) (Continued from page 9) program as natural gas prices change. Exhibit 10 shows an economic analysis of performing the 25 well per year REG program in Exhibit 8 at different gas prices. Partner Experience This section highlights specific experiences reported by Natural Gas STAR Partners. (Continued on page 11) Partner Company A Implemented RECs in the Fort Worth Basin of Texas RECs performed on 30 wells, with an incremental cost of $8,700 per well Average 11,900 Mcf of natural gas sold versus vented per well - Natural gas flow and sales occur 9 days out of 2 to 3 weeks of well completion — Low pressure gas sent to gas plant — Conservative net value of gas saved is $50,000 per well Expects total emission reduction of 1.5 to 2 Bcf in 2005 for 30 wells Partner Company B Implemented RECs in the Jonah/Pinedale Fields in Wyoming RECs performed on 242 wells, which included energized hydraulic fracturing using C02 and N2 at an average cost of $110,000 per REG. Average 119,000 Mcf of natural gas sold versus vented per well — Well pressure will vary from reservoir to reservoir — Reductions will vary for each particular region — Conservative net value of gas saved is $500,000 per well From 2001 to 2006, recovered 29 Bcf of gas from the wells in these fields. BP Experience in Green River Basin Implemented RECs in the Green River Basin of Wyoming RECs performed on 106 wells, which consisted of high and low pressure wells Average 3,300 Mcf of natural gas sold versus vented per well - Well pressure will vary from reservoir to reservoir - Reductions will vary for each particular region - Conservative net value of gas saved is $20,000 per well Natural gas emission reductions of 350,000 Mcf in 2002 Total of 6,700 barrels of condensate recovered per year total for 106 wells Through the end of 2005, this partner reports a total of 4.17 Bcf of gas and more than 53,000 barrels of condensate recovered and sold rather than flared. This is a combination of activities in the Wamsutter and Jonah/Pinedale fields. Noble Experience in Ellis County, Oklahoma * Implemented RECs on 10 wells using energized fracturing. ^ . Employed membrane separation in which the permeate was a CCh rich stream that was vented and the residue was primarily hydrocarbons which were recovered. Total cost of $325,000. Total gas savings of 170 MMcf. Estimated net profits to be $340,000 For more information, see the Partner Profile Article in the Spring 2011 Natural Gas STAR Partner Updated available at: http://epa.gov/gasstar/newsroom/ partnerupdatespring2011.html 10 ------- Reduced Emissions Completions (Cont'd) (Continued from page 10) Lessons Learned * Incremental costs of recovering natural gas and condensate during well completions following hydraulic fracturing result from the use of additional equipment such as sand traps, separators, portable compressors, membrane acid gas removal units and desiccant dehydrators that are designed for high rate flowback. * During the hydraulic fracture completion process, sands, liquids, and gases produced from the well are separated and collected individually. Natural gas and gas liquids captured during the completion may be sold for additional revenue. * Implementing a REG program will reduce flaring which may be a particular advantage where open flaring is undesirable (populated areas) or unsafe (risk of fire). * Wells that do not require hydraulic fracturing are not good candidates for reduced emissions completions. REG can be used with portable membrane acid gas separators for COz energized fractures. * Methane emissions reductions achieved through performing RECs may be reported to the Natural Gas STAR Program unless RECs are required by law (as in the Jonah-Pinedale area in WY). References Alberts, Jerry. Williams Company. Personal contact. American Petroleum Institute. Basic Petroleum Data Book, Volume XXV, Number 1. February 2005. Bylin, Carey. U.S. EPA. Gas STAR Program Manager Department of Energy. GASIS, Gas Information System. Release 2 - June 1999. Fernandez, Roger. U.S. EPA. Gas STAR Program Manager McAllister, E.W., Pipeline Rules of Thumb Handbook, 4th Edition, 1998. Middleman, Stanley. An Introduction to Fluid Dynamics, Principles of Analysis and Design. 1998. Perry, Robert H., Don W. Green. Perry's Chemical Engineers Handbook, 7th Edition. 1997. Pontiff, Mike. Newfield Exploration Company. Personal contact. Process Associates of America. "Reciprocating Compressor Sizing." Available on the web at: http://www.processassociates.com/process/ rotating/recip_s.htm. Smith, Reid. BP PLC. Personal contact. Smuin, Bobby. BRECO, Incorporated. Personal contact. U.S. EPA. "The Natural Gas STAR Partner Update - Spring 2004." Available on the web at: http://www.epa.gov/gasstar/pdf/ partnerupdate.pdf Wadas, Janelle. Noble Energy Inc. 2010 Annual Implementation Workshop Presentation titled "Reducing Vented Flowback Emissions from C02 Fractured Gas Wells Using Membrane Technology". Available on the web at: http://epa.gov/gasstar/documents/workshops/2010-annual- conf/01wadas.pdf Waltzer, Suzanne. U.S. EPA. Gas STAR Program Manager Appendix 11 ------- |