This is a new concept that is starting to gain traction.
While doing research on Journey Energy (host of tomorrow's webinar), I discovered that they are building power plants in their oilfields that can generate electricity to run their pumps and sell excess electricity into the power grid in Alberta. The power plants are run on raw natural gas produced from Journey's oil wells. "At full capacity, Journey’s Countess, Gilby and Mazeppa power projects are forecast to provide cash flow of over $17 million in 2025."
Riley Exploration Permian (REPX) is doing the same thing in the Permian Basin.
By generating electricity using cheap natural gas, lease operating expenses are lowered and (more importantly) it reduces the risk of power outages.
Join me on tomorrow's webinar. I think field level power generation is something we should explore further.
Upstream Oil & Gas Companies building their own power plants
Upstream Oil & Gas Companies building their own power plants
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Upstream Oil & Gas Companies building their own power plants
Also interesting:
A year after signing an equity participation right agreement, Verde Clean Fuels and Diamondback Energy subsidiary Cottonmouth Ventures are developing a natural gas-to-gasoline facility in Martin County.
Verde had received a $20 million equity investment from Diamondback to develop and spread its propriety syngas-to-gasoline (STG+) technology and that technology will soon spread to the Permian Basin. The two companies have announced a joint development agreement to develop, build and operate the facility.
“It will be located at a Diamondback location in Martin County and produce gasoline from Diamondback natural gas,” Ernie Miller, co-founder and chief executive officer of Verde, told the Reporter-Telegram in a telephone interview.
The expectation for the project is to produce approximately 3,000 barrels per day of fully refined gasoline utilizing Verde’s patented STG+® process. By consuming natural gas in the pipeline-constrained Permian Basin as feedstock, the proposed project could demonstrate the ability to mitigate the flaring of up to 34 million cubic feet of natural gas per day, while also producing a high-value, salable product.
Diamondback will then market the commodity-grade gasoline he said. The target market for that gasoline is expected to be Permian Basin refiners who would take it as blend stock or gasoline blenders or fuel distributors, he added.
A year after signing an equity participation right agreement, Verde Clean Fuels and Diamondback Energy subsidiary Cottonmouth Ventures are developing a natural gas-to-gasoline facility in Martin County.
Verde had received a $20 million equity investment from Diamondback to develop and spread its propriety syngas-to-gasoline (STG+) technology and that technology will soon spread to the Permian Basin. The two companies have announced a joint development agreement to develop, build and operate the facility.
“It will be located at a Diamondback location in Martin County and produce gasoline from Diamondback natural gas,” Ernie Miller, co-founder and chief executive officer of Verde, told the Reporter-Telegram in a telephone interview.
The expectation for the project is to produce approximately 3,000 barrels per day of fully refined gasoline utilizing Verde’s patented STG+® process. By consuming natural gas in the pipeline-constrained Permian Basin as feedstock, the proposed project could demonstrate the ability to mitigate the flaring of up to 34 million cubic feet of natural gas per day, while also producing a high-value, salable product.
Diamondback will then market the commodity-grade gasoline he said. The target market for that gasoline is expected to be Permian Basin refiners who would take it as blend stock or gasoline blenders or fuel distributors, he added.
Re: Upstream Oil & Gas Companies building their own power plants
Here’s the news wire on the post by Chuck. This is quite fascinating technology. To be able to bypass a refinery is a game changer with all the wasted flared nat gas and biomass lying around. Maybe a webinar, Dan?
https://www.businesswire.com/news/home/20240604385515/en/
https://www.businesswire.com/news/home/20240604385515/en/