Continental capturing 90 percent natural gas

Continental Resources, a top player in the Bakken shale, has a capture rate of around 90 percent of natural gas, says a company official. The company’s flaring rate is about 10 percent.

North Dakota’s current overall rate of capturing natural gas from producing wells is 67 percent, according to state regulators’ newest information, March figures, released earlier this week. For several months previously the percent of natural gas being captured in the state was less than 67 percent while the Tioga gas plant was shutdown for work on an expansion to double the facility.

On the other side of the picture, the current percentage of gas flared in North Dakota is 33 percent largely due to the beginning stages of the work at the Tioga gas plant, said Lynn Helms, director of the North Dakota Department of Mineral Resources in Bismarck. For a time while the plant was temporarily shut down, the state’s flaring went as high as 36 percent, matching the historical high of 36 percent in September 2011.

“The key to Continental’s success in capturing natural gas is active communication with our midstream vendors,” said Jeff Hume, vice chairman of Strategic Growth for Continental Resources in Oklahoma City, Okla.

“We have contracts in place to have connections and plants built before we drill. As we drill, we are in close communication with midstream companies (natural gas processors and gatherers) through regular performance review meetings and discussion of new developments or changes. We’ve been working with these companies for a long time.

“In addition, we are now in the development phase of the Bakken and have transitioned to pad drilling, which allows one line to serve multiple wells. As the field continues to develop, we will reach a point where little to no gas is vented,” Hume said.

Continental Resources is the largest producer, driller and leaseholder in the Bakken in North Dakota, according to Mary Ann Osko, director of Public Relations for Continental from Oklahoma City.

Hume said the goal of Continental Resources and the industry as a whole has always been to sell all of their gas to a market.

“No one wants to waste hydrocarbons. We have an Industry Task Force in place that is working on this issue very intently. Midstream companies are working together to take one another’s gas based on who has capacity. Infrastructure is being built out and we are finally getting ahead of capacity with the ONEOK and Hess facilities coming online and more planned in the future,” Hume said.

Hume said they still face some challenges, the biggest of which is securing landowner permission for connection activities.

“This can take 180 days or longer. Challenges also include delays in zoning by counties and townships for midstream facilities, a short construction season due to weather, a limited number of available construction crews, and review of permits for natural gas fueled equipment,” Hume said.

North Dakota set a preliminary new all-time high in gas production with 33.6 million cubic feet in March, the most recent figures.

Justin Kringstad, director of the North Dakota Pipeline Authority in Bismarck, said that currently, 67 percent of the gas is captured and sold; 12 percent flared from zero sales wells (more simply, lack of pipelines); and 21 percent flared from wells with at least 1 million cubic feet sold (more simply, challenges on existing infrastructure).

Tony Stratquadine, manager of Government Relations for Alliance Pipeline, a natural gas pipeline transporter, with its U.S. office in Eden Prairie, Minn., said the challenge of flaring is the geography of the production area.

“It’s a big investment to basically capture that gas through a gathering system to get it to some place,” and that’s a challenge of

producers, he said.

Stratquadine explained when the producer drills a well, they can produce the oil, put a tank at the field close by and store the oil in the tanks.

“The natural gas you can’t store effectively near the well site. You have to typically pipe it away,” he said.

He said if the natural gas can’t be transported economically, it is basically flared or burned off.

Stratquadine is a member of the board of directors of the North Dakota Petroleum Council and also a member of the NDPC’s Flaring Task Force. The task force recommended, during a meeting with the North Dakota Industrial Commission earlier this year, for industry to increase natural gas capture to 85 percent within two years and 90 percent in six years.

The Alliance Pipeline system consists of 2,311-mile integrated Canadian and U.S. natural gas transmission pipeline system, delivering rich natural gas from the Western Canadian Sedimentary Basin and the Williston Basin to the Chicago market hub, according to its website. The United States portion of the system consists of about 900 miles of mainline and related infrastructure. The system has been in commercial service since December 2000 and delivers, on average, about 1.6 billion standard cubic feet of natural gas per day.

Stratquadine said safety is a “first and foremost concern” of Alliance, and that the company has been operating safely for many years. “Our pipeline is operating full every day safely to deliver gas to the Chicago

market,” he said.

As for the challenges, Stratquadine said that obviously, oil is king. “You can take that easily and move it whether by rail or pipe or by truck. In the case of natural gas, it’s more challenging. You have to pipe it away and that’s expensive to do and if the market’s not there, you can understand why producers are frustrated by the economics.”

Stratquadine said North Dakota has a newer field than Texas where the oil field is more mature. “There has been better success perhaps in Texas based on the existing infrastructure in some other fields going back 20/30 years so they perhaps don’t see the same challenge because they’ve been there. North Dakota is a relatively young developing resource,” he said.