At the recent 2012 Alternative Clean Transportation Expo in Long Beach, California Encana Natural Gas Inc. displayed its LNG Mobile Fueling Solution (MFS). The Encana Mobile Fueling Solution technology is part of a complete suite of fueling solutions Encana offers to fleet owners. We sat down with David Hill, Vice-President, Natural Gas Economy Operations to discuss Encana Mobile Fueling and LNG fuel solutions.
Encana Natural Gas Inc. LNG Mobile Fueling Solution (MFS) at the 2012 Alternative Clean Transportation Expo in Long Beach, California
LNG Global - What is your role with Encana?
David Hill: I’m Vice President of Operations of our natural gas economy team which was formed 3 years ago to really look at the market for demand in natural gas. From an operations perspective my role is to assist in the market, understand the market and build out anything that we need. So whether it is a CNG station, an LNG station, or mobile fueler I interact and collaborate with other people in the supply and value chain and make sure we have the right products in the market.
LNG Global: We saw you speak yesterday at a conference session and you called Encana an innovation company. Can you tell us more about that concept of an innovation company?
David Hill: Encana has had a long history of innovation within the company itself. Early on in the unconventional gas resource plays we brought a lot to understanding how to develop them and we brought a manufacturing approach to our operations. We use Lean Six Sigma Principles in our organization. Encana brought a lot of technology to bare onshore that is used offshore. We now drill multiple well pads which really reduce our footprint from the environment as well as truck traffic and any kind of pollution in our operation. Those are some of the things we are doing differently. We brought an operating model that is low cost, lower environmental footprint, but yet it is definitely efficient. It is all about efficiency in this market.
LNG Global: Give us an overview of the Encana Mobile Fueling Solution (MSF) we see on display here at the conference as well as Encana fueling solutions.
David Hill: Right now the mobile fueling options are really resonating well with the customers because a big permanent station is very expensive. It is a large commitment for fuel. We have found the mobile fueling solutions have really allowed the companies to test this out before they make a big step and go into an order of 100 or 200 trucks. We are seeing a lot more interest in the mobile fueling. This is our 6th mobile fueler and we have more on order to help these fleets. In the oil and gas business the fleets move. They move from basin, to basin as the fleets move. The mobile stations can move with them. It has really provided them a lot more security of fuel. If they make the commitment they know the fuel can move with them and they really like that option. This unit (on display) comes from Cryogenic Vessel Alternatives (CVA) out of Beaumont, Texas. We have worked with them to do the innovation work. We are working with Chart Industries as well. We have bought our first Chart Industries vessel and it should be delivered shortly. Both CVA and Chart are working on really good products for us.
Encana Mobile Fueling Solution in the field
David Hill: We have onboard power so it is natural gas powered. When the operator comes they just push two buttons to get the unit started. We wanted to innovate to go more commercial. Originally they were really meant for one fleet. There was not a way to know how much fuel each truck was really getting. To go more commercial we put a card reader on it. It takes Visa, Master Card or Wright Express. So anybody who is properly trained can come by and use the equipment. That is an innovation which makes it much more flexible. We can take it to a truck stop or a yard of a trucking company. It is much more flexible. If two fleets want to use it, it is not a problem.
Encana Mobile Fueling Solution Card Reader
David Hill: The second innovation was the self-containment innovation. There has been quite a bit of confusion with local authorities regarding spill containment. You would have to build a pond or a berm around it. It was just more work to put barriers up and it did not look as nice. So this unit has the containment on it and you can park it anywhere and you are ready to go. This has provided a great opportunity. You still have to get all the permits, but the onboard containment makes it much easier.
David Hill: This tank is 6000 liquid gallons. More than adequate fuel for a fleet. 40 trucks consuming 50 gallons a day gives you 3 days of fuel. We either bring a load in or take it to an LNG plant and bring it back. It has GPS so we know where it’s at. Has a SCADA (supervisory control and data acquisition) system that communications all the measurements. Pressure, inches, how much fuel is dispensing. So we can log on and watch a fueling event. It provides customers a sense of security that Encana knows what is going on and we can trouble shoot ahead of time if needed.
David Hill: The vaporizing coil is about pressure maintenance. Some engines need colder LNG than others. Some of the spark ignited engines need a little more pressure to get into the engine. We can warm the LNG if needed with this unit. Where they load in LNG it has a pump. There is no need to release any gas to lower the pressure to load. We can pump off of a tank and collapse the vapor, lower the pressure, and not have to vent. That is a big thing for greenhouse gas emissions. We don’t want to vent the product. Drivers get trained either at a station or a mobile fueler and they get the same training. We have kept it as simple as possible. It is a station on wheels.
LNG Global: We've heard quite a bit about Heckmann Corporation purchasing LNG trucks and working with Encana for fueling solutions. Can you tell us about that partnership and how it came about?
David Hill: One of the things we had done is looked at our operations and asked where else can we use natural gas? We can use it in our fleet, our off road, and we can use it in our supply chain. The people we interact with every day can use it. We had been talking to our supply chain and we asked them to join us in this conversion to natural gas. With a company like Heckman Water Resources it did not take them all but a few minutes to think about it when they realized it is a domestically produced resource and we can use it right here in our operations as we are drilling for this resource. A lot of companies think about 1 or 2 trucks, Mr. Heckman said well lets do 200 LNG trucks.
Encana LNG Mobile Fueling Solution with Heckman Water Resources LNG truck
David Hill: He made a big commitment. Along with that he needed the fuel and we worked together with him and his company to provide the infrastructure to get the fuel. So we built a permanent LNG station for them in Louisiana which is also open to others. We designed the mobile fuelers with him in mind. That is where we did the innovation on these mobile fuelers to make them more user friendly, more rapid to deploy and really flexible.
Louisiana Encana LNG Station in DeSoto Parish
LNG Global: We understand Encana is using LNG to power some of your drilling rigs?
David Hill: We have about 12 drilling rigs running on natural gas out of 32 in North America. Those use a blend. Some of them use gas right off the wellhead. Four of our rigs right now running on LNG. Where we have infrastructure we can pipe gas. If we are not moving a rig, it stays on that pad for anywhere from 3 to 6 months. We can make the investment to get the natural gas to the pad and they can keep the well going anywhere from 6 to 15 wells on a pad. Where we don’t have field gas or the gas is too low of a quality, too much liquids in it, we have a system on site that has storage tanks with a vaporizer that feeds natural gas to the natural gas electric generators.
LNG Global: Where is Encana acquiring your LNG? Do you have liquefaction capacity in the U.S.?
David Hill: We don’t have any liquefaction capacity in the U.S. yet. We are looking at the market, looking at the opportunities and trying to identify places where there may be an opportunity for liquefaction and be supported by the market. The LNG we are buying from peaker plants. We are also buying from other LNG facilities across the U.S. Our main source of LNG is from AGL resources out of Atlanta. They have a facility in Chattanooga Tennessee that we are hauling LNG from to our locations in Texas and Louisiana. Also in Colorado we are getting our LNG from plants like Williams and Exxon Mobil in Wyoming.
I think today there is an oversupply of LNG in the market for transportation and high horsepower engines. The oversupply is there because the supply is not available where some of the market opportunities are. What is going to have to happen next is that more liquefaction plants need to be built. They also need to be underpinned by some type of market for this large capital investment to build a liquefaction plant. I think what we are going to be seeing is some movement here in this market with new plants being announced and built in the next few years to help support this growing market for off road and high horse power. Whether it is locomotive, marine, drilling or pressure pumping services. These are all great applications for natural gas and specifically for LNG. And where we are in remote locations Encana can transport it just like diesel in a tanker, bring it to site, store it, vaporize it and feed the engines with fuel.