Technology Trends in Upstream Produced Water Management

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1 Technology Trends in Upstream Produced Water Management Brent Halldorson, P.Eng. Chief Technology Officer, Fountain Quail Energy Services Chairman, Texas Water Recycling Association Board Member, Produced Water Society 1

2 Agenda 1. In-Field Management 2. Centralized Treatment 3. Call-Out Service ( On-the-Fly Service) 4. Trends 2017 Fountain Quail Energy Services, LLC. All Rights Reserved. MAG (Modular Above Ground) Tank Winkler County, TX 2

3 In-Field or Centralized? ü Water DEFICIT need PW as part of the frac supply. ü Easiest, lowest cost, most flexible. ü Requires a home for the recycled water. ü Goal is to cut transport/handling cost by treating near source. Harder to regulate (decentralized). Commodity Price Drops Cannot Use Treated Water Commodity Price Rises Need My Treated Water ü Water SURPLUS need to get rid of excess PW. ü May be favored by regulators. ü Offers an alternative to disposal (i.e.: treat for environmental discharge). Higher cost, long permit times. In-Field 2017 Fountain Quail Energy Services, LLC. All Rights Reserved. Centralized 3

4 In-Field Management Success predicated on having BOTH a (1) need for disposal, coupled with (2) a need for frac water. If either is missing this model collapses. Low price wins. Often modular, rugged systems. Produced water becomes an ASSET and is a part of the supply equation. Typically have service provider manage transfer and containment. Case Studies: ROVER NOMAD 2017 Fountain Quail Energy Services, LLC. All Rights Reserved. 4

5 ROVER Clean Brine Goals: Turbidity < 10NTU Keep solids out of pits (remove as dry cake) Remove nutrient/bacteria, monitor pit bacteria levels Location: Delaware NM Technology Basis: Chemical flocculation ph adjustment to neutral Chemistry is adapted on-the-fly as water changes. 24/7 operation, hourly log reports. 2 men/shift for safety. Coin at bottom of 40,000bbl AST full of clean brine. 5

6 ROVER Clean Brine Results: Began August 2015 Up to 4 ROVERs running simultaneously (40,000bpw capacity) Met or exceeded treatment targets Treated to date: 4.2M bbls and counting Ø Clean brine stored in pits. Nutrient removed to inhibit bacteria growth. Ø Solids removed as dry cake. Ø FQES manages in-field water logistics to meet customer s needs. 6

7 NOMAD Distilled Water Goals: Frac with freshwater Allow existing FW pit/transfer network to be utilized Location: Barnett Shale (14 different sites) Technology Basis: Patented MVR Mechanical Vapor Recompression designed for oilfield operation These sites allowed piloting of multiple pretreatment systems (EC, DAF, RVDF, membranes) result was development of ROVER system. 7

8 NOMAD Distilled Water Results: Almost a decade of continuous treatment in Barnett Shale alone Perfect track record with RRC and TCEQ Treated Volume: 25M+ bbls to pure distilled water Above: 2-NOMAD Site with 3 Nearby Fracs Right: 2-NOMAD Site in Permian Basin Ø Subsequently NOMADs have operated in the Permian, Delaware, Marcellus and Eagle Ford. 8

9 Centralized Treatment True alternative to SWDs. Typically treat for discharge quality (i.e.: re-use or re-sell treated water if needed, however if no drilling then can still use this model). Hybrid model: Combine recycle at SWD. Often creates value-add products: NaCl, CaCl 2 brine, etc. Capital intensive. Case Studies: Eureka Standing Stone (near Towanda PA) Antero WV 2017 Fountain Quail Energy Services, LLC. All Rights Reserved. 9

10 Centralized Treatment Eureka Standing Stone Crystallizer makes high quality food grade salt. Eureka Resources in Williamsport PA and Towanda PA are well established in the Marcellus Shale. Ø Centralized treatment involves large capital investment and a longterm approach (i.e.: Antero ZLD System - $275M facility + gathering + landfill ). Ø Larger centralized facilities are easier for regulators to monitor than 10 decentralized in field systems.

11 Call-Out Service A new trend based on low-price commodity pricing and market uncertainty. Typical scope: single frac, pit treatment. Short deployment: 1 frac, remediate 1 pit, etc. Quick and nimble (deploy with single truck). Examples: SCOUT MAVREX ( On-the-Fly Service) Someday, and that day may never come, I ll call upon you to do a service for me 2017 Fountain Quail Energy Services, LLC. All Rights Reserved. 11

12 SCOUT Clean Brine Feed Pump Control Panel Tools / Parts Removable Cover HVAC Unit, Power JB (connect to genset or line power) Ø High volume (10,000bpd) / small footprint. Ø Fully containerized and mobile. Ø Fully automated and failsafe. Upon system alarm FQES operator will be sent notification. Ø Designed for unmanned operation in harsh environments. Ø No bag filters or messy cleanup. Wet sludge is directed to a frac tank for (1) thickening/dewatering, or (2) disposal. SCOUT designed to be towed by a 3/4ton or larger pickup truck. 12

13 MAVREX Disinfection Ø Dual treatment: On-the-fly, plus Working tanks recirculated, monitored and treated Ø Patented system adjusts dosage real-time Ø Accommodates high flow rates (140 bpm) Ø Automated produced water blending Ø Three precursors mixed with vacuum eductor ØMobile, rig up / down in one day Ø Frac tank level monitoring included Ø Tablets provided to water transfer and frac crew: Frac tank levels Water flow rates Water quality in tanks: ph, Cl0 2, chloride, etc. Ø Meets EPA standards as green biocide Above: Appalachia 2017 MAVREX Operation with redundant generator 13

14 MAVREX Disinfection Goals: Safely use ClO 2 for on-the-fly bacteria kill Stable ph with guaranteed residual Location: Marcellus/Utica 2017 Results to Date: 53 wells 2,786 stages 13,063,000bbls ZERO safety incidents How it works: Ø The MAVREX trailer is a water treatment plant inside a mobile trailer Ø Water enters the unit (1) through either two 10 lines (fresh) or one 6 line (produced) into the manifold room (2) Ø Water quality is checked and a portion of the water (slip stream) is sent to the ClO 2 generator room (3) where ClO 2 is added, then Ø Checked in stage (4), and returned to the manifold room before being Discharged (5) to up to eight tanks. There are additional 2 suction and discharge lines to each tank to monitor residual ClO 2 and ensure water quality KPIs are maintained ❶ ❸ ❷ ❹ ❺ 14

15 Trends A. There is no right model. We need a blend of solutions. B. Combining recycle + disposal. C. Logistics and volatile commodity prices remain dominant challenges. D. Bye-bye black boxes. Real proven technology wins. E. Smaller low-cost (often un-manned) solutions. F. Long-term thinking lends to centralized treatment. Short-term needs drive in-field/modular treatment. G. FQES believes in building long-term relationships and working with E+Ps to develop the solutions they need Fountain Quail Energy Services, LLC. All Rights Reserved. 15