American Oil and Gas Reporter - November 2017 - 61

Last-Mile Logistics
Silica dust is subject to one of two
new federal regulations that soon will
weigh on the logistics supporting hydraulic
fracturing, reports Taylor Robinson, president of Oak Park, Il.-headquartered PLG
Consulting, which works with producers,
pressure pumpers, sand companies and
transload operators to improve proppant
supply chain management.
In December, commercial truck drivers
must begin complying with the U.S. Department of Transportation's electronic
logging device rule, which imposes electronic records tracking of service hours
and duty status. In June, U.S. Occupational
Safety & Health Administration rules
take effect that set exposure limits for
respirable silica dust and require employers
to minimize worker access to high-exposure areas.
"Transload capacity has expanded significantly in most plays, but as the volume
of sand per well grows, more and more
trucking is required for the last mile. The
implementation of electronic logging is
going to make logistics even more challenging by reducing trucking capacity,"
Taylor remarks. "Driver shortages will
worsen, especially in the Permian, so
everyone is focusing on trying to find
processes and technologies to improve
last-mile logistics."
Although pressure pumping companies generally have assumed responsibility for well site proppant delivery,
Taylor points out that a growing number
of operators have decided to self-source
proppants and chemicals. "Self-sourcing
means they take ownership of the lastmile logistics, which is challenging,"
he notes.
The traditional well-site delivery
method uses pneumatic trailers and blowers to move proppant into a sand king,
which then dumps onto a conveyor that
feeds the blender. "It is noisy and generates a lot of dust, even when dust
control systems are used," Taylor says.
"To control dust and speed delivery,
projects are moving to either portable
silo or mobile container solutions. Many
companies also are investigating bottom-dump trucks that empty faster and
generate less dust."
The ability to unload faster and store
more volume on site aligns with the demands being placed on transload facilities
to accommodate short-notice design
changes, Taylor notes. "Portable silos
typically hold a day to a day-and-a-half
worth of proppant, so it provides a buffer
if changes need to be made on the fly,"
he reasons.
Localizing sand mines in shale basins

also represents a big step toward faster,
more responsive proppant logistics. "The
trend in areas such as the Permian is
opening local mines so that the sand originates near the wells. Not only is this increasing sand capacity, but it potentially
is a game changer to the cost structure
and cycle time. Instead of staging inventories all the way from Wisconsin or Illinois, local sand can be trucked straight
from the mine to the well site, skipping
all the logistics involved in rail shipping
and transloading."
The result is a leaner, lower-cost proppant supply chain that can have a material

impact on completion costs, Taylor suggests. EIA estimates that proppant will,
on average, account for 15 percent of a
Midland Basin well's total cost in 2018.
For comparison, EIA projects that drilling
operations and casing each will account
for 10 percent of well cost.
"In wells with high proppant intensities,
proppant actually can be up to 25 percent
of the total well cost. If the total delivered
cost of sand can be cut by 40 to 50
percent, there is an opportunity to save a
significant portion of the well completion
cost," he summarizes.
r

MINIMUM FACILITY APPROACH
TO PAD BASED DEVELOPMENTS

Multiphase Production System (MPS) Advantages
Over Conventional Artificial Lift Methods
* Typically reduces lifting costs by 30% or more
* Eliminates tanks, trucking, permitting and emissions
* Reduced footprint and risk of oil spills
* Diﬀerential pressures up to 1500 psi and flow rates
up to 500,000 bpd equivalent

* Optional automated well testing for improved
reservoir management

Leistritz Advanced Technologies Corp.
www.leistritzcorp.com/minimal-approach * staﬀ@leistritzcorp.com * (201) 934-8262

NOVEMBER 2017 61

http://www.leistritzcorp.com/minimal-approach

American Oil and Gas Reporter - November 2017

Table of Contents for the Digital Edition of American Oil and Gas Reporter - November 2017