American Oil and Gas Reporter - May 2017 - 62

SpecialReport: Gas Compression Technology

Growth Boosts Compressor Demand
By Colter Cookson
The highly dynamic production environment and rich multiphase product
streams in unconventional resource plays
require flexibility in all aspects of operations-from artificial lift to compression.
The best strategy for managing compression to accommodate production variations
and optimize asset performance over time
can vary from play to play, but compressor
manufacturers and service companies
alike have responded to the challenges
by providing solutions that help producers
get maximum performance from their
gas compression equipment.
And when it comes to performance,
the operative word remains efficiency,
says Kevin Lawlor, an engineering adviser
specializing in compression and surface
facility design. A key piece of the efficiency puzzle is automation and remote
monitoring, he notes, using as an example
operators' ongoing work to automate surface facilities in the play that gave the industry its first glimpse of compressionrelated challenges in large-scale unconventional reservoir development: the Barnett Shale.
"Operators are designing their entire
systems, from the xmas tree through the
pipeline and into the plant, to need as
little human interference as possible," he
relates. "They want a control system that
can monitor everything, send alerts when
a situation develops, and trend data so
engineers can understand how the system
is operating and tweak it to get to the
most economic point."
Lawlor reports that in many applications, automating and optimizing surface
facilities can yield 15-percent increases
in production and 20-percent reductions
in costs.
In the world of compressors, Lawlor
says larger machines are in high demand.
"The amount of gas they can move for
every foot of surface area they take is
larger, which means the operator needs
fewer machines to move a given volume
and can put those machines in a smaller
location," he explains. "Also, the larger
machines employ more sophisticated
emission controls, allowing operators to
put more horsepower in a given area
without exceeding emission limits."
Lawlor says emissions will continue
to be a concern even with a business62 THE AMERICAN OIL & GAS REPORTER

friendly administration in the oval office.
"There has been a shift in the federal
government's direction, but many state
and local governments are concerned
about emissions in their area and have
set strict standards," he says. "It is prudent
to assume the limits will only get even
lower with time."
With drilling continuing to pick up,
demand for the engines needed to power
larger compressors has outpaced production capacity, Lawlor warns. "As a result,
we are seeing lead times for compressor
engines such as Caterpillar's 3600 series
extend," he says. "Operators are ordering
compression earlier, even before they
have the projects fully identified, to ensure
they have horsepower coming."
Because rental rates are low, most operators are choosing to rent compression
rather than buying and operating it, Lawlor
says. He suggests that today's cost-competitive environment has made uptime
and efficiency top priorities for compression companies.
"To provide high-quality service, compression companies are looking to become
dominant in their areas of operation," he
says. "Instead of trying to compete with
one another on every deal, they are studying basins and even counties or townships
within basins to identify the best opportunities, then bringing in the infrastructure
they need to gain more business."
The goal is to maximize economies
of scale, Lawlor says. "A rental company
can take care of 40 compressors more
cost-effectively than it can take care of
10 or 20, so the bigger its footprint in an
area, the more it can attract and retain
customers," he contends.
Planning for Declines
Because shale wells' production declines rapidly, Lawlor says most operators
are using several compressors to handle
peak production. "As gas volumes decline,
they take larger compressors out of a station to bring the horsepower in line with
requirements," he says.
In deciding how many units to deploy,
Lawlor says operators must balance the
efficiency gains from using larger units
with the flexibility that multiple units
provide. Usually, he recommends dividing
the field's peak production among three
to five units.
"As shale plays such as the Barnett

start to mature, the industry is beginning
to replace the compression originally installed, which needed a suction pressure
of 150-200 psi, with compressors that
can handle 30-50 psi," Lawlor comments.
"This enables operators to use plunger
lift and other gas lift technologies more
efficiently, which often will increase production 10-15 percent."
Almost every conventional field developed in the United States has gone
through pressure reductions as it has matured, Lawlor notes. He says that process
is under way in the Barnett Shale and
should spread to other unconventional
plays in the next 10-15 years.
"From the midstream side, the pressure
reductions will be comparable to the ones
in conventional plays," he says. "However,
the exploration and production companies
will need to understand how each shale
will respond to lower pressures. Shales
where reservoir desorption occurs should
respond well and provide a worthwhile
increase in production. Shales with extremely dense, low-permeability rock,
such as the Barnett, may not respond as
strongly."
Compressor Demand
Compressor demand is increasing in
tandem with the rig count, reports Karen
Buchwald Wright, chief executive officer
and president of Ariel Corporation. "We
are at 65 percent of the peak we saw in
2014," she says.
High-horsepower compressors are in
higher demand, Wright says. "Driven by
the need to increase efficiency and cut
costs, operators are drilling more wells
per pad, using longer laterals in each
well, and increasing fracturing stages and
proppant concentrations. These changes
have increased flow rates and well pressures," she explains.
"These higher initial pressures necessitate larger compressors," Wright continues. "For example, associated gas is
often reinjected to increase oil production.
Because of the wells' pressures, reinjection
requires a higher horsepower compressor."
Because of the company's strategy
during the prolonged downturn, Wright
says producers and compressor packagers
can be assured that Ariel can deliver
compressors, whatever the horsepower
requirement, in short order. "As demand



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