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.)