Drilling companies in the booming Permian Basin may soon have an option to power their heavy-duty equipment with the same stuff they’re pumping from the ground.
Stabilis Energy, a Beaumont-based company that has been marketing liquefied natural gas to oil field companies, plans to partner with Flint Hills Resources to build a LNG plant in Odessa tailored toward providing fuel for high horsepower engines in drilling rigs and pressure pumpers.
The companies did not disclose the cost of the project, which is expected to have a capacity of about 100,000 gallons of LNG per day. Pending final approval by the companies, construction could begin early next year with production starting in 2016.
“It’s an excellent location from which to serve customers in the Permian Basin and the property allows for future growth,” Darren Tiemstra, general manager of LNG for Flint Hills Resources said in a statement.
Stabilis has been pushing LNG as a clean fuel source for heavy duty oil field equipment, arguing that it reduces costs and improves environmental performance.
Related: New facilities will grow natural gas as oil field fuel
The shale boom unlocked a glut of cheap natural gas, making it an attractive replacement for diesel, but companies that want to power their equipment with natural gas have to pay to have it trucked in from plants sometimes hundreds of miles away.
Installing LNG plants in active shale plays reduces the need to transport the supercooled gas to the oil patch and saves drillers money, Jim Reddinger, chief financial officer and chief operating officer of Stabilis Energy said in an interview with Fuel Fix.
“To have efficient operations, these facilities need to be where the drillers are,” Reddinger said.
The Odessa plant would be the latest by the privately held company, which has been supplying LNG to oil field companies working in the Eagle Ford, Permian, DJ Basin, Utica and Marcellus shale plays.
A similar plant is under construction in the Eagle Ford Shale. Stabilis Energy last week installed storage tanks and a cold box at the George West plant and is expected to begin operations in January, the company announced Monday.
The facility will have the ability to liquefy about 100,000 gallons per day. The George West plant is the first of five natural gas liquefiers proposed for construction by the joint venture between Stabilis and Flint Hills.
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