American Oil and Gas Reporter - May 2017 - 67

SpecialReport: Gas Compression Technology
Texas/Louisiana corridor," he explains.
Exports and petrochemicals are adding
to the continued increase in demand from
power plants, which Long says will continue to displace coal thanks to compelling
economics and environmental benefits.
"We are seeing the perfect storm,"
Long declares. "Demand for natural gas
should increase from about 75 Bcf/d
today to 90 Bcf/d by 2020, a mere three
years from now."
Meeting Demand
Meeting the 20 percent increase in
demand will require gathering systems,
treating and processing plants, and
pipelines, Long notes. He says this infrastructure will be provided by specialized
companies rather than integrated firms.
"From 2010-2013, when money
flowed freely, many producers would
own gathering systems, processing plants
and compression in addition to drilling
wells," he recalls. "With today's commodity prices increasing the need for
efficiency, producers and service companies are focusing on their core competencies. Gathering companies are
building gathering systems to deliver
gas to processing plants, processing
companies are optimizing those plants,
and compression companies are providing and maintaining the associated
compression."
In a few cases, Long says producers
will buy equipment. "It makes sense to
purchase compressors needed to provide
baseload compression, as they often have
20-30 year deployment cycles," he allows.
"However, for compressors with deployment
times between three and seven years, we
believe outsourcing is more economic."
Because they have the scale to make
commitments to engine and compressor
manufacturers, Long says compression
providers will have an edge as activity
picks up. "Lead times for some of the
larger, more popular compressor engines
have increased considerably, but compression companies who have made purchase commitments with the manufacturers still are able to get equipment,"
he reports.
The best compression companies try
to maximize their equipment's flexibility,
Long says. "For example, our larger
horsepower compressor packages are
multistage convertible. Instead of building
a single-stage, a two-stage, or a threestage compressor, we design units that
can go from one stage to two or from
two to three stages," he offers. "As con-

ditions change-a common occurrence
with shale production-we can switch
from one stage to another by turning
some valves and moving some flanges."
The process only takes an hour or so,
Long reports. "Our customers benefit by
having compressors that can operate
across a broader range of conditions, and
this lets us keep the same compressor on
location longer. For our customers, that
limits the downtime and transportation
costs associated with swapping out compressors, which for large horsepower
equipment are substantial."
To minimize downtime, Long says almost every major compression company
has invested in remote monitoring systems
and diagnostic tools. "We have spent millions developing proprietary technologies
to improve productivity," he says. "With
these tools, field service personnel spend
less time driving from place to place and
more time fixing problems."
Getting skilled personnel can be difficult, but Long says compression companies
are doing what they can to expand their
talent pools. "We have had great success
hiring and training younger, computersavvy entry level employees and working
with trade schools," he reports. "We also
are hiring veterans, who often have strong
managerial and technical skills."
Long adds that his company has hired
people from the aircraft and automotive
industries. "Because finding skilled labor
in remote areas can be particularly challenging, we are adopting rotations similar
to the ones on offshore platforms and in
some of the Canadian tar sands," he comments. "We will have several employees
dedicated to specific pieces of equipment,
each of which spends a week or two on
and a week or two off, so we maintain
service consistency and unit-level me-

chanical knowledge."
Taking The Long View
With business picking up, compression
companies should be able to invest more
in employee training, says James Barr,
vice president of sales for J-W Power
Company. "Business efficiency depends
on having a knowledgeable workforce,
so that is something we work on continuously. With a portion of our workforce
reaching retirement age, it's something
we all need to do," he stresses. "It costs
more to send two people to a site, but it
is important to transfer knowledge before
our experienced hands retire."
In the short term, Barr says J-W Power
is increasing its manufacturing workforce
and readying idle equipment for deployment. "We have preserved that equipment,
so we are able to get it out with a minimal
capital expense," he comments.
Increasing production could cause
compression equipment that has had maintenance deferred to go down if it is not in
condition to operate near full loads, Barr
cautions. "To cut expenses, producers
have gotten extremely lean as far as the
amount of excess horsepower on location,
so when new gas comes on line, it can
stretch the capabilities of the equipment,"
he says. "It is vital we understand and
respect the equipment's limitations, and
stay on top of maintenance when we
have to operate on the edge."
Ideally, Barr says, operators would
have extra capacity to absorb downtime
caused by unplanned events. "That is an
added expense, but because it improves
facility run time, operators likely will
give themselves more of a cushion as
prices improve and uptime becomes
more important than lower operating
expenses."
❒

Centennial Completes Reeves County Purchase
DENVER-Centennial Resource Development Inc. and its affiliates have closed
on their acquisition of leasehold interests
and related upstream assets in Reeves
County, Tx., from Silverback Exploration.
According to the company, the $855
million transaction covers 35,000 net
acres directly offsetting Centennial's
acreage in the county, in which it holds
an 88 percent average working interest.
The acquisition produces 3,500 barrels
of oil equivalent, and includes at least
600 horizontal drilling locations, assuming
880-foot spacing, prospective for the

Upper Wolfcamp A, Lower Wolfcamp
A, and Wolfcamp B.
Centennial says the estimated undeveloped resource potential is more than
600 million barrels of oil equivalent from
the first two plays, with additional upside
potential from the Wolfcamp C, Avalon
and Bone Spring formations.
The acquisition increases Centennial's
horizontal drilling inventory by 44 percent
and more than doubles its inventory of
extended length laterals, the company
says.
❒
MAY 2017 67

American Oil and Gas Reporter - May 2017

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