Electricity can be hard to come by in some parts of the Mississippian oil play, so producers increasingly are turning to natural gas to power their operations.
Devon Energy Corp. plans to lease five more natural-gas fueled generators for its operations in northern Oklahoma after a successful pilot project with General Electric.
Construction and facilities engineer Michael Matlock, who leads the generator project at Devon, said the generators allow the company to power a site with natural gas from the wellbore, rather than buying about $100,000 worth of diesel each month.
He said using natural gas instead of diesel is cheaper and better for the environment.
“There's a lot of benefits overall,” Matlock said.
Devon is not the only company using the gas it produces to power its operations in the Mississippian, which covers a large swatch of northern Oklahoma and southern Kansas.
Chesapeake Energy Corp. uses natural gas-powered generators and other innovative approaches in areas like northwest Oklahoma that are not served by traditional utility power sources, spokesman Jim Gipson said.
SandRidge Energy Inc., the leader in the Mississippian play, has slashed the number of generators it has running on diesel.
CEO James Bennett told shareholders at the company's July 1 annual meeting that SandRidge has developed electric infrastructure so that only one in 10 of its wells are on generators.
Half of those generators are fueled by natural gas.
“We have very few wells on generators at this point,” said David Lawler, SandRidge's chief operating officer. “In this part of the world, we didn't have a full electrical distribution system. The company was very aggressive and stepped out and built these lines.
“From about a year and a half ago, we've taken the number of generators down from about 35 percent to about 11 percent.”
Power from gas
Devon's Matlock said producers prefer to get their power from the electric grid, but that isn't possible in some rural areas that are part of the Mississippian play.
He said the Mississippian, like many other emerging oil and natural gas plays, requires a lot of power.
Most sites, which can have as many as four wells, need more than a megawatt of electricity to power the submersible pumps that push oil and water to the surface.
“That's quite a lot of power,” Matlock said.
Traditionally diesel-fueled generators have been used, but that is an expensive option because the fuel can cost at least $100,000 a month.
Matlock said Devon began looking into replacing diesel with natural gas last fall.
Officials met with General Electric in November to discuss how the company's expertise could meet Devon's needs. One presentation focused on GE's natural gas power generation, which had been used successfully in the gas-rich Marcellus Shale.
Matlock said GE had a unit installed and running within four months of that meeting after learning of Devon's technical requirements.
He said the natural gas fueled generator provides enough power for all of the equipment at the site southwest of Stillwater. It uses about 200 cubic feet of gas a day directly from the wellbore.
Matlock said the pilot project went so well that Devon has committed to lease additional units from GE.
Devon also is working with GE to make the generators more portable so they can be moved between sites easily, if necessary.
Matlock said gas-powered generators are more expensive than diesel ones, but Devon is able to offset that expense with its fuel savings.
He said Devon expects to use natural gas generators at existing Mississippian wells and new ones when power from the electric grid is not available.
Devon is ramping up its activity in the Mississippian, with plans to spend $1.2 billion this year to drill about 400 wells.
CONTRIBUTING: Adam Wilmoth, Energy Editor