Companies Performing Horizontal Directional Drilling Increase Efficiency, Open Door for More Cathodic Protection

As a result of increased drilling speeds, companies operating horizontal directional drilling sites in the Marcellus Shale region are drilling bigger wells more efficiently and affordably, and are producing more natural gas than ever before.

“Since I came up here three years ago, it’s 200 percent better,” said David Dewberry, who manages a Lycoming County drilling site in Pennsylvania’s Loyalsock State Forest for Seneca Resources Corporation, the exploration and production segment of Houston-based National Fuel Gas Company.

When Dewberry started working in Pennsylvania’s Marcellus Shale in 2010, the oil and gas industry veteran said it took him more than a month to drill a natural gas well. However, improvements to horizontal directional drilling equipment and processes have cut drilling times significantly.

According to Dewberry, a new 2 1/2-mile well project that began on Dec. 4 will be completed in just 16 days. When that’s done, his rig will crawl 20 feet and begin drilling another well, in an assembly-line fashion known as pad drilling, until nine wells are completed on the site.

“We’ve become so much more efficient,” Dewberry said.

Greater drilling efficiency in the Marcellus Shale region has not only yielded longer horizontal wells in shorter times, it’s meant fewer rigs are required to meet, and even exceed, the previous pace of drilling and natural gas extraction. In fact, the U.S. Energy Information Administration has officially recognized that drill-rig counts are an obsolete MATCOR's Iron Gophermeasure of output. The administration now relies on drilling speed and production as a way to quantify efficiency.

Of course, an increase in drilling efficiency means more wells are being constructed. And that means companies performing horizontal directional drilling need to invest more in cathodic protection for wells and pipelines, according to Nick Judd, director of field operations for MATCOR, a Pennsylvania-based company that specializes in cathodic protection products and services.

“The need for managing and preventing corrosion is growing alongside the rush of new wells being drilled in the Marcellus Shale,” Judd said. “The process of hydraulic fracturing used to access the Marcellus Shale requires miles and miles of steel pipeline and every inch of it is subject to corrosion, which can affect the safety, performance, and efficiency of the natural gas well. In addition to wells and pipelines, the transfer piping associated with the gathering fields also requires corrosion prevention. An effective cathodic protection system extends beyond the well casing to include all piping from the casing of the well, to the piping in the pump station, the transfer piping and further downstream.”

“Impressed current anodes and linear anodes for cathodic protection, like our Iron Gopher™, are invaluable tools for horizontal directional drilling companies,” Judd said. “Controlling costs and mitigating issues associated with well and pipeline corrosion are critical factors for insuring the profitability goals of any drilling project.”

Further Reading

Marcellus Shale Drilling Becomes More Efficient,” The Philadelphia Inquirer, December 16, 2013.

Bakken Shale Oil and Gas Companies Pave Way for Growing Cathodic Protection Demand

More than $22 billion will be spent to build over 23,000 miles of pipeline in North America between 2014 and 2020, according to a recently updated pipeline construction report.

The third-quarter 2013 update of the North American Onshore Pipeline Database Service, by Douglas-Westwood, an energy research group based in Faversham, England, also catalogued the planned construction of over 1,000 miles of pipelines transporting Permian crude oil from the Bakken Shale region.

The Bakken pipelines will enable Bakken Shale oil and gas companies to meet the logistical challenges of transporting crude oil from the remote shale region, which encompasses parts of the United States, including North Dakota and Montana, and Canada.

Because of North Dakota’s short construction season, hard terrain, and distance from the Gulf Coast, rail transportation and natural gas flaring by Bakken Shale oil and gas companies has boomed in recent years. However, the report estimates that the planned Bakken pipelines will further lower the current Bakken discount compared to WTI, which has hovered around $5 for most of 2013, and diminish the cost competitiveness of rail.

“While the capital cost of pipeline installation can sometimes be difficult to justify when compared to rail, a pipeline cathodic protection system can help companies control associated maintenance and repair costs,” said Jeff Didas, who works as a pipelines practice lead for MATCOR, a Pennsylvania-based cathodic protection management company.

“When the potentially devastating effects of corrosion are managed to the point that corrosion becomes a minor factor, pipelines transform into a far more cost effective option over the 30-plus year commitments typically required in pipeline shipping contracts,” Didas said. “A cathodic protection strategy for pipelines is vital for Bakken Shale oil and gas companies and others who are investing in takeaway infrastructures from shale plays in North America.”

One such area, the Utica Shale, has lagged in production to date compared to other major shale plays but is expected to spike soon, due in part to pending developments in pipeline construction and capacity.

Further Reading

Shale-Driven Pipeline Expenditure to Hit $22B Before 2020,” Oil & Gas Financial Journal, December 12, 2013.

Marcellus Shale Production Data Hints at Growing Cathodic Protection Needs

Production from the Marcellus Shale natural gas reserves is expected to exceed 13 billion cubic feet per day this December, nearly seven times the 2 billion cubic feet per day it produced during the same period in 2010, according to a recent report.

The report on Marcellus Shale production data, by the U.S. Energy Information Administration, said the figure would equal about 18 percent of total U.S. natural gas production during the month.

One of the Marcellus Shale companies that’s taking advantage of the natural gas boom is Cabot Oil & Gas Co., based in Houston, which claimed 15 of the 20 highest-producing natural-gas wells in the area during the first half of the year.

According to Dan O. Dinges, Cabot’s chief executive officer, 10 wells from a single well pad in Auburn Township produced enough natural gas in 30 days to meet the average monthly demand of the entire city of Philadelphia.

Cabot plans to increase its Marcellus Shale drill rigs from six to seven in 2013, with each rig capable of drilling 20 wells during the course of the year.

The sharp rise in natural gas reserves production hints at the growing need for Marcellus Shale companies to incorporate pipeline corrosion control equipment like cathodic protection rectifiers into their gas delivery infrastructure, according to Chris Sheldon, who works as utilities practice lead for MATCOR, a Pennsylvania-based cathodic protection company.

“Marcellus Shale companies are experiencing a tremendous upswing in natural gas production and are building new drill rigs and digging new wells to take advantage of the vast natural resource at their feet,” Sheldon said. “That means a lot of new pipes are going to be laid. And more pipes means more opportunities for corrosion.”

“At MATCOR, we’re here to help Marcellus Shale companies, as well as other pipeline companies and natural gas producers, with a full line of advanced cathodic protection equipment, systems and services designed to help them meet their corrosion control needs.”

Further Reading

A Marcellus Natural-Gas Bonanza,” The Philadelphia Inquirer, December 10, 2013.

MATCOR Offers Take on Natural Gas Liquids Production and NGL Transportation

“There is much discussion about the abundance of natural gas deposits in Marcellus Shale, and there is tremendous focus in extracting this precious resource. However, the industry’s ability to get this product to the end user is impacted by the infrastructure that currently exists.

“While rail is a means to transport natural gas, MATCOR is working with a growing number of midstream companies in expanding transmission and distribution piping networks. The key is to get product to market in a cost-effective and safe manor, and MATCOR’s cathodic protection products and services help ensure any new pipeline, regardless of the product it delivers, is in compliance and protected from corrosion.”

John Rothermel, PE

Vice President of Sales, MATCOR

Pipelines Planned for NGL Transportation Through Central Pennsylvania

At least one company is looking to take advantage of the rapid growth of natural gas liquids production from two of the largest shale regions in the nation.

Sunoco Logistics, a Philadelphia-based company that transports, terminals, and stores crude oil and refined petroleum products, recently announced that it was surveying land for a new pipeline, dubbed Mariner II East, that would connect production of natural gas liquids (NGL) from the Marcellus and Utica  shale regions of Pennsylvania, Ohio, and West Virginia to one of the company’s oil and diesel tank farms outside of Mechanicsburg.

The company also has plans to convert its existing Mariner East I pipeline, which used to carry oil and diesel fuel west, so that it carries propane and ethane east to its facility in Marcus Hook, which had also been idled.

The company bought the refinery from the former Sunoco Co. earlier this year for $60 million and is spending an unspecified amount of money to upgrade it and bring it back online as a natural gas liquids production refinery.

Sunoco Logistics is betting on the continued growth of natural gas production, of which NGLs like propane and ethane are byproducts. Natural gas production has increased in recent years thanks to hydraulic fracking, which has resulted in a larger supply that has driven prices down and has therefore, like a circle, created bigger demand for natural gas.

As a result of this process, NGL production has climbed during the last four years from 50 million to 70 million barrels per month. But, without greater avenues for NGL transportation, the increased production is moot.

Sunoco Logistics says that its plan to build a new NGL transportation pipeline, and convert an old pipeline for NGL transportation, will help create a northeast NGL hub in Marcus Hook that will help meet the demands of NGL producers and local and overseas consumers.

The Mariner East projects are only a few of the pipelines being planned by Sunoco Logistics. The company has roughly a dozen oil and gas projects on the books over the next 12 months at a cost of $1.3 billion, four times what it spent on capital expenditures each of the last four years.

MATCOR offers cathodic protection safety products and services to companies like Sunoco Logistics, which require cathodic protection equipment to maximize safety, efficiency, and capital investment in their pipeline projects.

Further Reading

Sunoco Logistics Plans Marcellus, Utica Pipeline Through Susquehanna Valley,” The Patriot News, Nov. 21, 2013.