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Future Investment
Approved, publically announced (approx.) 2014-2015 Over $1.7 Billion new infrastructure announced 1,000+ miles of gas gathering pipe 400 MMcfd gas processing 75,000 bbls NGL export 400 MMcfd gas export 400 miles of export pipe
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Flaring Statistics
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MCFD
90-95% Q4-20
May-17
May-10
May-11
May-12
May-13
Sep-13
May-14
May-15
May-16
May-18
May-19
May-20
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Sep-10
Sep-11
Sep-12
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Sep-19
Jan-20
* NDPA Production forecast is for visual demonstration purposes only and should not be considered accurate for any near or long term planning
Sep-20
Note: Typically, can connect a well in 90 days (weather permitting) if the contract is already in place.
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Gas Capture Plan Regulatory Consequences Midstream Planning and Tracking Gathering Line Oversight Rights of Way State Actions Remote Capture Technologies Monitoring and Reporting
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Regulatory Consequences
At the discretion of NDIC, penalty for failure to comply Failure to submit GCP New wells suspension or denial of permit Existing wells curtail production where no detriment to well or reservoir Failure to comply with GCP Curtail production Not meeting flowback strategy Mitigating circumstances may allow extension (i.e., economic evaluation, operators overall capture rate, ROW, safety, weather, work crews, etc.)
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Pipeline Hotline
NDIC develop and manage hotline for reporting surface owner issue related to pipelines Establish follow-up mechanism with company and surface owner to ensure quality control Provide landowner with easy notification system for problems and concerns
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State Actions
Incentivize rapid build out capacity for gas infrastructure Property tax incentive, payment in lieu of taxes Low interest loans (electrical transmission), etc. Production tax credits for producers Incentivize intrastate value added markets LNG, CNG, petrochemical, fertilizer plants, technology innovation Develop Infrastructure Development Fund Support dense phase, high pressure export pipeline Major investment approximately $3 billion Long lead time approximately 3 years construction time to mid-continent markets NDPA is authorized by statute to take up to 10% of firm capacity
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Externally
Planning
Construct and maintain rig schedule to meet corporate goals
Exploration or step-out testing Well density testing (both horizontal and vertical separation) Full field development
Prepare Gas Capture Plan exhibit identifying pertinent information for use at regulatory hearings
Determine market status (Dedicated to mid-stream or not) Determine mid-streams ability to meet timeline and production rates
When feasible, adjust drilling timeline to accommodate connection or compression/plant capacity timing Provide periodic production forecasts* to mid-stream gatherer for existing and planned wells or well pads
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Track Performance
Establish metrics to quantify performance
Percent and volume flared from wells that are connected to a purchaser Percent and volume flared requiring connection to a purchaser
Mcf/Month
# of Wells
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Planning
Providing development plans for a 2+ year period to meet design and construction lead-time requirements Reviewing volume forecasts by specific gathering areas Hosting quarterly performance review meetings Engaging CLR and mid-stream teams in open dialogue Reviewing performance metrics and modifying plans Discussing new developments and/or changes Assisting gatherer with problematic issues, such as ROW acquisition and reasonable surface use within the lease boundary
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Discourage private investment (O&G support operations, housing, hotels, restaurants, retail, etc.) Decrease the reservoir recovery efficiency Lose substantial revenue for the mineral interest owner, operator and the State of North Dakota
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Thank you
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49 www.undeerc.org/flaring_solutions/Search.aspx
<1 MCFD TOTAL LOCATIONS Locations Monthly Gas Flared, MCF 1925 (42%) 4504 (<1%)
1299 MCFD
300599 MCFD
6001199 MCFD
1200+ MCFD
216 Locations Flaring 60% of Total Flared Gas at Rates of >300 MCFD.
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Note: The following 7 slides will be animated into one slide to illustrate the change in location of largest flare rates.
Geographic Distribution of Locations with Flaring Rates Greater than 300 MCFD
June 222 Locations
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Geographic Distribution of Locations with Flaring Rates Greater than 300 MCFD
June 222 Locations July 270 Locations
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Geographic Distribution of Locations with Flaring Rates Greater than 300 MCFD
June 222 Locations July 270 Locations August 242 Locations
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Geographic Distribution of Locations with Flaring Rates Greater than 300 MCFD
June 222 Locations July 270 Locations August 242 Locations September 237 Locations
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Geographic Distribution of Locations with Flaring Rates Greater than 300 MCFD
June 222 Locations July 270 Locations August 242 Locations September 237 Locations October 227 Locations
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Geographic Distribution of Locations with Flaring Rates Greater than 300 MCFD
June 222 Locations July 270 Locations August 242 Locations September 237 Locations October 227 Locations November 216 Locations
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Geographic Distribution of Locations with Flaring Rates Greater than 300 MCFD
June 222 Locations July 270 Locations August 242 Locations September 237 Locations October 227 Locations November 216 Locations
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Technology
NGL Removal
Pros
Ease of deployment Ease of operation Extracts highest-value product from rich gas Fuel cost savings Ease of deployment Ease of operation Reduces overall electrical load growth Ease of deployment Ease of operation Fuel cost savings
Cons
Best deployed during first 12 months of operation Increases truck traffic, liquids storage Limited applicable sites
Power Diesel Replacement Power Local Load, Diesel Replacement CNG/LNG Truck Transport
Low demand for fuel Infrastructure and vehicle conversion takes time 900 trucks 9 trucks/day/MMCFD Immature at relevant scale High capital cost Complex operation Requires large, consistent gas supply
GTL
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Questions?