Texas Natural Gas Summit: Drilling Rig Natural Gas Technology
Todd Fox Vice President Projects, Support, & Performance October 23, 2014
544 LAND WORKOVER RIGS
7 JACKUPS – 5 Drilling – 2 Workover
496 LAND DRILLING RIGS
1 BARGE RIG 36 PLATFORM RIGS – 18 Workover/Re-Drilling – 18 Drilling
Worldwide Rig Fleet Status Actively Marketed Rigs Only As of June 30, 2014
18.4
M
9.5M
12.3
M
14.8
M
14.7
M
15.6
M
11.6
M
2.07 1.92
1.70 1.54
1.22 1.09
1.05
4.11
3.07
3.44
2.87
1.97
1.60 1.47
0.25 0.19 0.13 0.27 0.08 0.10 0.09
0.0M
2.0M
4.0M
6.0M
8.0M
10.0M
12.0M
14.0M
16.0M
18.0M
20.0M
0
0.5
1
1.5
2
2.5
3
3.5
4
4.520
08
2009
2010
2011
2012
2013
Aug
-14
Labor-Hours Incident Rate
Nabors Drilling Labor Hours Nabors Drilling Incident RateIADC Incident Rate Nabors Drilling LTI Rate
NABORS US DRILLING SAFETY PERFORMANCE
2008 – August 2014
5
A transition to alternative fuel- currently two methods for rigs:
8
1. Dual Fuel- add-on to existing engines, 61 rig installations to date. 2. 100% Natural Gas- new engines, 2 rig installations to date (2013).
Natural Gas Supply- 4 current methods
9
1. Wellhead Gas 2. Pipeline Gas
3. LNG- Liquified
Natural Gas
4. CNG- Compressed Natural Gas
Push Back to Natural Gas
10
> Supply concerns due to lack of reliable infrastructure.
> Safety concerns. > Few first adopters.
> Concerns regarding return on
investment.
> Technology and rig performance barriers.
> Lack of training and technical expertise on natural gas engines.
Natural Gas Safety
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Gas Flow rate is 3300 scfh (max), 15-50 psi.
Gas Flow rate is 73 scfh (max), 3/8 psi max.
Natural Gas Safety- your home
12
> Safety Features*:
– Gas Control device (thermostat) – Air/Fuel shut-off device built into
thermostat – Temperature and pressure relief
valve (water) – Flame arrestor plate – Vent hood to atmosphere – Manual shut off valve
* Source: Home Depot online manual for Rheem 75 gal hot water heater.
Gas Detector Gas Supply Line at Power House
Gas Detector Gas Supply Line at Edge of Location
Gas Detector Middle of #1 Generator
Gas Detector Front of #3 Generator
Gas Detector Scrubber Skid and Alert Systems Panel
Gas Supply Line at Power House Gas Detector
Flame Detector above each Generator Set at 190 F.
Engine flame and gas detection systems
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Scrubber Skid
Rig Manager’s Quarters
Engine Fire and Gas Detection Panel
Remote Emergency Shutdown (ESD) switches
Driller’s Cabin
Engine House
16
Economics
17
> Primary business driver today for the drilling contractor is increased rig marketability.
> Dual Fuel System savings can be up to 70% yet currently
average 40%.
Economics
18
> Current dual fuel rigs diesel consumption drops by approx. 1,000 gpd.
> DGE (Diesel Gas Equivalent) pricing of natural gas is roughly $2.10-$2.50* per gallon.
*Unofficial estimate
Forecast for the future (subject to change!)
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> LNG facilities will become more prevalent, starting with the larger plays- Eagleford and Bakken.
> Frac spreads and trucking fleets
will drive the conversion due to better economics. Drilling rigs will benefit as a result due to improved supply chain.
> Engine technology will improve,
dual fuel will become a standard feature if the natural gas price remains low.
Forecast for the future (subject to change!)
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> Substitution rates will improve
as the OEM’s enter the market. > As LNG facilities become more
prevalent, 100% natural gas engine rigs will become more prevalent.
> Energy storage systems will
enter the market and improve the economics of 100% natural gas engines as well as dual fuel.