Warren Resources Inc. has won approval from pollution control regulators to install six microturbines at its Wilmington Townlot Unit (WTU) oil and gas production site in the Wilmington area of Los Angeles Harbor.
The natural gas-fired units will provide on-site power using gas that otherwise would have been flared during the course of oil production. The hearing board for the South Coast Air Quality Management District (SCAQMD) pointed to the “dual value” of the small turbines — besides reducing gas flaring they also provide inexpensive electricity to Warren’s operations.
The decision resolved other permitting issues with SCAQMD, and it requires the company to comply with certain operating parameters, including limiting the amount of oilfield gas burned to no more than 94.2 standard Mcf/d.
The average price of Warren’s oil in the second quarter was more than $112/bbl, doubling the average price it received in the same period last year. The exploration and production company said it invested $16.5 million in WTU in the second quarter, with $8.4 million attributable to drilling costs.
Hearing board action on Warren’s compliance proposal followed two days of public hearings earlier in August, and a June filing by Warren of a draft analysis with the air pollution board. The board’s review is ongoing.
Warren presented its long-term plan for handling gas flaring emissions associated with oil production to SCAQMD last March. The plan includes reinjecting gas into oil-bearing reservoirs “until such time as gas volumes are adequate and equipment can be permitted, procured and installed to sell the gas directly to a third-party user or public utility,” Warren said. Buyers could be the City of Long Beach Municipal Gas Department or Sempra Energy’s Southern California Gas Co., for instance.
Warren CEO Norman Swanton said the company still has to complete the its analysis for the air pollution board in the fourth quarter, and then install the natural gas reinjection system “as soon as possible” thereafter.
“It is our desire to reinject and eventually sell all of the associated natural gas produced from the WTU, thereby eliminating the gas flare, except on an emergency basis,” Swanton said.
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