Tony Smith, Commercial Strategy Manager at Peel Gas and Oil discusses adopting a masterplanning approach to shale gas developments.
During the current exploration phase of the emerging shale
gas industry it is unsurprising that focus has been on individual well pad
sites. Operators have been focusing on their license areas and looking to prove
that the shale gas reserves in these areas can be efficiently and safely
extracted. However, as we move towards the full award of the 14th
onshore oil and gas licensing round – which will bring a larger number of license
areas and operators to the market – is the time to start thinking about how
various well pads could inter-connect as part of a big picture? At Peel Gas
& Oil, we certainly think so.
Shale gas development is currently dependent on a supply chain delivering
a number of commodities for successful and cost effective implementation. By
viewing the supply chain as part of an overall ‘masterplan’, linking the supply
and demand of shale from production to consumption, developers can
demonstrate the overall vision for an
interconnected area. In much the same way as urban developers produce a
masterplan showing housing, roads, hospitals, schools and shops.
The principle is the same. Shale gas well pad sites will depend on a
supply chain and a disposal chain managing water, well casing, dill rigs,
hydraulic fracture pumps, sand, and other on-site facilities including water
receipt, flowback water separation and waste management. Rather than considering
each well pad site independently, costs and impacts may be minimised byco
planning overall area requirements and outputs – including methane and liquids processing and distribution, , casing, sand, water
provision and waste management.
At Peel Gas & Oil we believe that is critically important for shale
gas developments to be considered in sympathy with the local environment, using
environmental and logistically efficient mechanisms to connect supply to
demand. For example, in the North West we are working on the use of the
Manchester Ship Canal as an arterial facilitator for shale gas.
Consideration has been given to using the ship canal to transport well pad
equipment and supplies from the Port of Liverpool. With appropriate
treatment and consent, water from the canal could be used for the hydraulic
fracture process. As well as being cost effective and reducing
demand on potable water from the utility companies, this may have the added
bonus of reducing the number of trucks required to supply the well pad sites.
So, what would need to be considered in a masterplan for shale gas
development? The gas extracted from shale will likely require some level of
processing before it can be sold with a gas gathering hub or central processing
facility receiving gas from several sites. Waste water treatment could also become
centralised – offering a more cost effective way of processing water prior to disposal.
The development of a ‘masterplan’ for unconventional gas is not a new
one. Dart Energy used exactly this approach when applying for their (as yet
unconsented) Coal Bed Methane (CBM) project in Scotland. Dart Energy
applied for consent for 22 wells in the Forth Valley along with a central gas
processing and waste water treatment facility.
This kind of interconnected thinking will assist planners and regulators
in considering the overall cumulative effect of a development. It also offers a
clearer visualisation of the overall proposal including well pad site location,
connecting roads and infrastructure, water supply and disposal considerations
and critically an efficient and cost effective gas distribution system. Demonstrating
the ‘big picture’ or masterplan of shale gas developments will provide a degree
of certainty for communities and regulators which in turn should help to
demystify the process.