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LNG Drilling Rigs Cut Fuel Costs 47 Percent, Encana Says

Encana, Canada’s largest natural-gas producer, saved $830,000 in fuel costs, a cost reduction of 47 percent, by switching the power for its shale gas drilling rigs from diesel fuel to liquefied natural gas, Canada.com said.

The savings were based on consumption of almost half a million gallons of fuel and average prices of $3.28 a gallon for diesel and $1.11 a gallon for LNG over a period of about 160 days. The pilot project took place at Encana’s shale gas drilling site in the Haynesville formation on the Texas-Louisiana state line, Canada.com said.

David Haugen, head of market development for gas strategic planning for Encana, told Bloomberg that the company would like to adopt LNG across operations, but the makers of drilling rigs primarily build diesel-powered systems.

Encana is converting its trucks to gas and has a stake in a project with Apache Corp. and EOG Resources Inc. to export LNG from northern British Columbia to Asia, Bloomberg said.

In February, Encanca opened the first LNG fueling station for heavy duty truck fleets in Frierson, La. The fueling station is open for public use, and is primarily servicing Heckmann Water Resources, an Encana water partner, according to the Encana website.

Encana also recently secured a supply contract with Pivotal LNG, a subsidiary of AGL Resources, which owns and operates a major liquefaction facility, Encana said.

According to Bloomberg, gas producers in the U.S. and Canada are looking for new ways to remain profitable since North America has the world’s lowest priced gas market. Also, the supply is increasing with the use of hydraulic fracturing.

Last month, Encana maneuvered to reduce North American supplies and boost prices for the heating and power-plant fuel by cutting output by as much as 600 million cubic feet a day, Bloomberg said.

Photo: Encana

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