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Statoil's Bakken Gas Flaring Pilot Moves to Commercial Operations

A pilot project to capture associated natural gas from oil wells in North Dakota is being commercialized, and the technology likely will be marketed in the Permian Basin, a project sponsor said Wednesday.

Bakken Shale producer Statoil ASA, partnering with General Electric (GE) and Ferus Natural Gas Fuels (Ferus NGF), piloted a project to power up to six drilling rigs and one hydraulic fracture fleet using flared gas from producing oil wells. Following eight months of testing, the pilot proved successful, leading to full commercial adoption by Statoil of GE and Ferus NGF's Last Mile Fueling Solution.

Last Mile was used at Statoil's operations near Watford City. By expanding the project, Statoil expects to capture up to 5 MMcf/d of associated gas by the end of 2015, equal to greenhouse gas emission reductions of up to 200,000 metric tons/year.

"Not only is Last Mile enabling our company to better comply with the new flaring regulations in North Dakota, but by using this captured natural gas in place of diesel in our drilling and hydraulic fracturing operations, we are further reducing emissions and costs," said Statoil's Bakken Vice President Lance Langford. "This is good for profit and the climate. GE and Ferus NGF are offering an innovative solution which gives us the confidence to move from pilot to commercial operations."

North Dakota introduced flaring regulations this summer, with a target to reduce flared gas to 5% in 2020 (see Shale Daily, July 2; July 3).

Last Mile combines GE's compressed natural gas (CNG) fueling technology, which it markets through CNG In A Box, with the operational and logistics expertise of Ferus NGF.

Hasan Dandashly, who runs GE's downstream technology solutions unit, discussed Last Mile during an investor day presentation Wednesday.

"The Bakken...generates more light than New York City at night when you look at it from space. It's a significant issue for the industry and for our customers...We're able to capture the gas at the point of flare, treat the gas, compress it, move it to the rigs, power the rigs with it and save on the diesel fuel. So you are saving on pollution. You are saving on the gas that you are flaring and not utilizing, and you are actually saving on the rigs.

GE is "in discussions with many other customers in the Bakken and the Permian Basin in order to advance the solution with them."

On the transportation side, said Dandashly, there is an agreement between GE Capital Fleet Services and VNG.co, which specializes in developing fueling for transportation infrastructure.

"Together we're working to [determine] how we can speed up the adoption of CNG in light-duty natural gas vehicles...We're bringing our expertise in order to help develop this market...It is estimated that gas will increase its role in global energy production from 20% in 1990 to 26% in 2025. A significant part of that is the increased use of gas as downstream fuel. And in order to get that to happen, it will require technology, it will require local know-how it will require partnerships."

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