Eagle Ford Well Completed With LNG Powered Frack Pumps

Onshore LNG Regas and Tanker

LNG powered frack pumps were used to complete an Eagle Ford well in late 2012. We sat down with Ferus' LNG rep Jed Tallman to learn more. This was the first time LNG has ever been used to fuel pumps fracking a well. Field gas has been used by Schlumberger in the Horn River Basin of Canada, but LNG has never been used before.

Ferus is an oilfield service company that supplies cryogenic liquids as part of its offering. The company worked with Baker Hughes to test natural gas conversion technology and yard tested 10 Cummins QSK50 powered pumps. After a successful test, the companies took the pumps into the field to complete an Eagle Ford well south of Pearsall.

Diesel fuel was used as the spark for combustion and LNG was regassed and brought in through the air intake.

Mr. Tallman stated, "This particular technology can achieve diesel substitution rates of 40-65%. An average of 50% substitution is expected.""

Only 6 LNG powered pumps were used on this particular job, but ten will be tested soon. A real determination of savings will be made when the LNG pumps are being fully utilized.

In simple economic terms, vaporized LNG is 20-40% cheaper than diesel fuel. Ifyou can substitute half that cost, you can save 10-20% on fuel costs alone. Build pumps fully powered by LNG and you might save 40%. Consider the average Eagle Ford well can consume as much as 25,000 gallons of diesel and the economics become attractive.

LNG Provides Environmental Benefits

There is also an environmental benefit to using LNG over diesel. Emissions for natural gas vs. diesel can drop as much as 30% for CO2, 75% drop for NOx, 90% drop in particulates, and a 99% drop is SOx emissions.

More LNG Powered Frack Jobs Are Coming

“Ferus is building one 50,000 gallon per day LNG plant in Western Canada and has plans for three more, each of which will have capacity for 87,000 to 100,000 gallons per day, consuming 8.5 mmbtu’s/day.”

Ferus is building one 50,000 gallon per day LNG plant in Western Canada and has plans for three more, each of which will have capacity for 87,000 to 100,000 gallons per day, consuming 8.5 mmbtu’s/day. Ferus is currently looking at areas of high demand and expects the Eagle Ford to top that list. The company committed to develop the plants a couple of years ago, so everything is in place to have a plant up and running in as little as 18 months.

This won't be the last time you hear about LNG being used in frack pumps. Apache will complete a well with 12 LNG powered frack pumps in January of 2013. The effort will be in partnership with Schlumberger and Halliburton. Apache expects fuel cost to fall from a little more than $120,000 to less than $75,000 when utilizing a duel fuel approach similar to that implemented by Baker Hughes and Ferus.

The real hope is to one day fuel the pumps with gas source directly from the field. If field gas were to replace diesel, the industry could save more than $1.5 billion per year. Sounds to me like Ferus should get to work on a new plant in South Texas. 

Good CDL Drivers Needed in the Eagle Ford Shale Play

18 Wheeler Side Shot Del Mar College

South Texas has had a huge CDL driver shortage even before Eagle Ford Shale. Currently there are 150,000 CDL drivers needed nationwide. The American Trucking Associations have predicted the driver shortage will jump to 300,000 by the year 2014. Many companies are finding it more and more challenging to attract experienced CDL drivers due to the huge demand. CDL holders are held to a much higher standard than regular licensed drivers and must keep their driving records in good standing.

Hiring good experienced drivers is very challenging because companies have to be especially strict about driving records, accidents and Department of Transportation violations. This is because of CSA (Compliance, Safety, Accountability) scores. CSA was established to keep accurate statistics of accidents, DOT violations, unsafe equipment and driving habits. CSA scores the safety performance of both the driver and the driver’s company. If a driver receives an unsatisfactory vehicle inspection and receives a violation, it will stay on the individual’s CSA score for three years and the company  that employed the driver at the time for two years. Under CSA’s new system that score will travel with the driver to whatever company the driver may transfer to over those three years. Having a negative CSA score increases the chance of receiving a DOT audit and can be very costly to both the driver and the employer.

South Texas CDL Training Programs Need to Utilized

Many companies have resorted to hiring inexperienced drivers to try and keep up with the workload. Inexperienced drivers could be a high risk if they did not receive adequate training from a credible CDL training program that teaches them how to be a safe, law abiding driver. Unfortunately there are some instances where a company will offer to train inexperienced drivers. In many cases these individuals are not successful because they are taught only how to pass the CDL test given at their local Department of Public Safety. However, there’s more to know to be able to drive a truck safely and efficiently. For example, drivers must know hours-of-service regulations and have to maintain a log book. Since hours of service isn’t tested it’s a subject that’s rarely taught in a CDL-prep-only program, but it’s vital to being able to operate a heavy commercial motor vehicle safely and legally.

Drivers must follow many federal and state rules and regulations which undergo frequent updating and changes. Not understanding their responsibilities can ruin drivers’ CSA scores quickly making them unemployable. Transport companies are in the business of transporting items; they’re not educators. Schools and training programs specialize in and have the experience and tools to give people a thorough education consistent with current industry and government requirements. [ic-c]

How to Choose a CDL Training Program

When researching a credible CDL training program to attend here are a few things to watch out for:

1. Is the training program approved though your state or is it a crash course?
2. Does the program offer classroom training that teaches the State and Federal Safety Regulations?
3. Does the training curriculum include hours of service and vehicle inspection practices?
4. How much time is offered behind the wheel for backing and road driving?
5. After completing the training, what companies will hire their students and do graduates receive a training certificate?

Good training is an investment that lasts for a lifetime of safe and rewarding driving. Professional drivers get the best and most thorough training they can. They understand that they owe it to themselves, their employers and the people with whom they share the road.

Eagle Ford Capital Spending Makes the Play the Largest in the World

Eagle Ford Capital Expenses

Did you know? The Eagle Ford now ranks as the largest single oil and gas development in the world based on capital expenditures. That means more will be invested in the South Texas oil play than any other single oil and gas development in the world! That's the headline takeaway from a recent report released by Wood Mackenzie Analyst Callan McMahon.

The report notes that BHP, ConocoPhillips, and EOG Resources have a combined value of more than $30 billion in the Eagle Ford. That number likely doubles when you add other large players like Anadarko, Chesapeake, Lewis Energy, Marathon Oil, Murphy, Pioneer, and Talisman. If natural gas prices recover to more than $5/mmbtu, it's quite possible more than $100 billion in value has been created by operators across the Eagle Ford.

“Some of these numbers can be difficult to put into perspective, but US$28 billion would put one at roughly the median country annual GDP.”

— Mr. McMahon

In terms of costs, Wood Mackenzie notes the play will likely surpass the Kashagan project in Kazakhstan, which will have an estimated $116 billion invested in the coming years. At the current rate of spending in the Eagle Ford, the play will surpass the the Kashagan project in as little as four years.

"With US$28 billion in capex being spent in 2013 and development now in full swing, the excitement in the Eagle Ford Shale and value being extracted from the play continues to exceed expectations." explains Callan McMahon, Upstream Research Analyst for Wood Mackenzie.

Eagle Ford Shale From Space - NASA

Other highlights from the report include:

• Growth from zero to more than 700,000 b/d of oil and natural gas liquids (NGLS) in three years
• Eagle Ford is the top liquids producing shale in the world with Q3 volumes of 1 million boe/d (Bakken ranks #1 for oil production alone)
• DeWitt, Gonzales, and Karnes counties account for 50% of liquids production
• 74% of estimated future activity will target liquids areas (this changes if natural gas prices go up)
• Capacity constraints have eased
• The Eagle Ford accounts for 38% and 20% of EOG's and BHP's upstream value, respectively
• In 2013, the play will account for 27% of all upstream spend in the Lower 48

Mr. McMahon added: "Being located near the coast allows Eagle Ford realized (oil and gas) price fluctuations to be mitigated through being linked to a global price index. Additionally, a number of upsides remain in the form of downspacing, increases in natural gas prices, increases in well performance, decreases in well costs and increases in operational efficiencies on the crowded surface of the Eagle Ford."

Read the entire press release at woodmacresearch.com

Freeport-McMoRan & PXP Reach Deal for $6.9 Billion

PXP Eagle Ford Map

Freeport McMoRan Copper & Gold (FCX) announced plans to acquire Plains Exploration & Production (PXP) and McMoRan Exploration (MMR) on December 5, 2012. FCX will pay $6.9 billion (24% premium) for Plains E&P and will pay $2.1 billion (74% premium) for McMoRan Exploration. FCX said it is bullish natural gas prices post 2013, but will have to make good investment decisions with the amount of debt that will be carried. The company is combining the Gulf of Mexico interests of the two companies, gets long-lived assets in California from PXP, and gains exposure to the Eagle Ford Shale.

In the Eagle Ford, Plains Exploration has:

• 22 million boe of proved reserves
• 172 million boe of published resource potential
• 60,000 net acres
• 500 future well locations
• James C. Flores, Chairman and Chief Executive Officer of PXP said:

“I am proud of the accomplishments of our team who have built a strong company and created the opportunity for our shareholders to participate in this exciting transaction. I believe that the addition of PXP’s U.S. oil and gas assets to FCX’s global mining business will establish a very significant, long-term commodities business positioned to generate meaningful returns over an extended period...”

Read more about the deal at FCX.com

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Plan a Safe Trip in the Eagle Ford Shale Play of South Texas

Tanker Truck on the Highway

In mid-October, 2012, the Hawaiian Star Advertiser had a report about how a dump truck towing a trailer loaded with a forklift smashed through a pedestrian bridge, closing westbound lanes for about four hours. The crash caused a multi-ton section of the bridge to fall to the ground. Fortunately no one was injured but the repair bill was estimated to be between $200,000 and $300,000. The state’s Department of Transportation planned to ask the truck’s owner to pay for the repairs.

According to the report, the bridge had a clearance of 15 feet, 6 inches and the clearance was posted on a sign. A state DOT spokeswoman said that the trucking company did not have an overload permit.

The online newspaper of the Lower Hudson Valley in New York reported a similar mid-October accident: traveling in the southbound lane of the New York State Thruway, a flatbed truck carrying a dump truck hit an overpass, resulting in a three-vehicle accident. The dump truck’s spread came loose and ended up in the right lane.

It doesn’t take a lot of searching to find reports of accidents, including those with fatalities, caused when commercial trucks strike overpasses. Without proper planning, such accidents can easily occur traveling to and from the oilfields in the Eagle Ford Shale Play where many farm-to-market and county roads pass under state highways.

Plan Your Route in South Texas

Obtaining permits and planning routes that won’t present clearance issues are a driver’s responsibility. Both are part of trip planning. Getting your load to its destination safely and efficiently is the name of the game.

Freight comes in all shapes and sizes and in some cases could be a nightmare for drivers' trip planning. Loads hauled to service the oilfield are frequently oversized, overweight or both.

Oversize loads that require special permits are difficult to maneuver especially in large cities and areas that have poor infrastructure. Roads in the oilfield take a beating and that presents a challenge for the driver.

Many accidents happen because of the failure to plan the trip accordingly to avoid low bridges, major dips in roadway and poor signage. It does sometimes happen that the posted clearance is not accurate, because the road has been repaved or due to some other factor. To make allowances for that, assume that there can be as much as a six- to nine-inch difference between the posted and the actual clearance.

Trucker maps and other trip planning aids are usually quite reliable. However the roads in the oilfield take a lot of abuse and their condition changes faster than trip planning aids can keep up with. Check with the Department of Transportation if you have any concerns about the roads that you want to take. The smart trucker avoids unnecessary driving challenges and plans to avoid roads that are likely to be rough from so much use.

As a professional driver, you should be completely familiar with your equipment and the space required in which to maneuver safely.

Heavy Load Trip Planning Tips

Here are some helpful tips when trip planning:

1. Map out the most efficient route to your destination.
2. Get familiar with the type of load you will be transporting. Will you need to take alternate routes because of hazardous materials? Is your load oversized and will it need additional space to maneuver?
3. Check with local, state and federal guidelines to see if  if permits are required.
4. Do a thorough Vehicle Inspection to make sure your vehicle and cargo will be safe.
5. Always be well rested and focused before every trip to ensure you get to your destination safely.

Plan to Be Safe

Professional commercial motor vehicle drivers are charged with keeping our roadways safe. Safety for you and those who share the road with you is the number one priority from the start of the trip to the journey home. Before every trip it is ultimately your responsibility to make plans to travel safely.