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Huge Market Forecast to Treat Produced Water at Drilling Sites

Produced water treatment systems for the natural gas and oil sector are growing worldwide, with an estimated market potential of about $4.3 billion over the next five years, according to research compiled by industry consultants Douglas-Westwood Ltd. and OTM Consulting Ltd.

The market for topside produced water reinjection, which is emerging as the preferred method of water management, is expected to be worth around $9.8 billion over the same period, the consultants reported in "The Produced Water Gamechanger Report 2010-2014."

"The pressure on operators to manage produced water is growing considerably -- and will continue to do so in the future," said OTM Senior Consultant Saif Rahman. "Our research from within the operator community itself shows that environmental and pollution regulation at local, regional or national levels is the main reason for their interest in the technology and the principle driver for innovation within the sector."

Produced water at drilling sites has become a big issue for domestic onshore producers both at the state and federal level. Last month the House Energy and Commerce Committee launched an inquiry into the potential health and environmental risks of hydraulic fracturing (hydrofracing) of unconventional gas resources (see NGI, Feb. 22).

Rep. Henry Waxman (D-CA) and Rep. Edward Markey (D-MA) sent letters to eight oilfield service companies asking them to identify the types and quantities of chemicals used in hydrofracing fluids and asked companies to respond to whether they injected the fluids in, near or below underground sources of drinking water.

According to the Douglas-Westwood report, a range of new technologies is now helping operators deal successfully with produced water, which includes treatment, minimization, separation and re-use. Target and actual site production rates, production chemistry and reservoir characteristics such as geology have an impact on the way produced water is managed, they noted.

Produced water systems are used both onshore and offshore, and the authors looked at several of the top systems across the world to compile their findings.

Chevron Corp.'s application of compact flotation systems at its Alba Field in the North Sea offshore Scotland was reviewed, as well as ConocoPhillips' adoption of condensate-based extraction technology at the Ekofisk field in the Norwegian sector of the North Sea. BP plc, Schlumberger Ltd., Royal Dutch Shell and Total produced water systems also were studied by the authors.

"Produced water is the single largest waste stream from hydrocarbon production," said Douglas-Westwood Director Steve Robertson. "Daily water production volumes significantly exceed that of oil volumes, to the extent that 211 million barrels of water are produced by the industry daily compared to around 85 million barrels of oil. In this context, it is vital to deal efficiently and cost-effectively with produced water to ensure fully optimized production and compliance with national and regional regulations."

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