Infrastructure that complete wells with 100-percent recycled produced water

The term “recycling” today means removing elements from the produced water to make it acceptable for well-completion purposes. This includes hydrocarbons, metals and bacteria.

The goal is to reduce the risk of mechanical or chemical production issues during the life span of the well and to use water that is compatible with the fluids designed to frac a well. Today, some forward-thinking exploration and production (E&P) companies have developed the infrastructure to complete wells with 100-percent recycled produced water. They’ve accomplished this by using chemistry and weirs as the dominate methodology to get the water to the preferred quality.

Historically, produced water has been not been the preferred source of water for fracing due to the solids content that for example, range from 50,000 to 150,000 total dissolved solids (TDS) in the Permian Basin. TDS may lead to mechanical issues when the wells are put into production and to other incompatibility issues with the targeted formation.

The frac fluid needs to have a certain viscosity to transfer the sands, reduce the friction created as the fluid moves through the casing at high speeds and be compatible with oil production (oil saturation/water wet formation considerations). Although recycling has been one of the first methods used to create value for the produced water, other means have been sought due to the unavailability of groundwater, its associated cost and the amount of produced water available in a general area.

spwm ortega2Before I joined the executive team of an oil-field service company and was working for an E&P, we would use about 250,000 barrels (bbl) of water to frac a well and would pump at 65 barrels a minute. Now, some of our clients are using up to 850,000 barrels of water to frac one well and are pumping at 105 barrels a minute.

Some forward-thinking exploration and production (E&P) companies have developed the infrastructure to complete wells with 100-percent recycled produced water.

Given this rise in demand for fluid in the completions space, the Permian Basin’s current infrastructure doesn’t have enough capacity to store and produce the water needed for these new completions designs. This would include pits, fixed pipe and water wells.

In addition, areas that are limited in groundwater, like Lea County N.M., have some of the highest water prices. Not to mention that New Mexico regulation limits the use of commercial water where Texas gives more autonomy to the surface owner.

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With faster rates delivered to fracs and increasing volume demand, infrastructure from multiple sources where water is scarce is now being tied together to meet the demands. This means increased exposure to rights of way (surface use agreements) that allow midstream companies to install permanent and temporary infrastructure across land with many owners.

The more rights of way required to install a transfer line, the more capital is required to ensure that sourced water for completions activity can get from Point A to Point B. The combination of rising prices, regulation, rights of way and limited infrastructure has oil and gas operators looking for alternatives.

Produced-Water Disposal Capacity Tells a Similar Story
Produced water for unconventional wells is expected to double in the next four to five years, and disposal permits are harder to get approved due to environmental concerns. This has forced operators to find innovative alternatives for dealing with produced-water availability.

Environmental concerns include seismic events that are increasing in Pecos and Reeves County in the Delaware Basin and increasing bottomhole pressures in existing saltwater disposal wells across the Permian.

Today, it can take 20 to 30 days to complete a horizontal well. It can be ready to go online to a disposal facility within three months. One small company running three rigs through the course of the year can prepare 10 four-well pads to be fraced, resulting in 120,000 barrels per day (BPD) on the system, which is equivalent to four to six disposal wells.

It is evident that the rate at which disposal wells can be permitted and commissioned for use may be outrun by the pace that produced water comes to the surface. In addition, these rising environmental concerns and stringent operational oversights have led regulatory agencies to favor permitting deeper formations for water-disposal use. This change in preferred geological zones has resulted in increased engineering and commissioning work. These wells are more expensive and take longer to put online.

The increase in produced water is not only coming from additional wells being added to the disposal network, but also the rising water cuts that occur as a well produces over its life span. It is evident that produced water will outrun the available capacity, and in some areas, it already has. The short-term solution is using as much of it as possible. You are now seeing some midstream water players storing the water on the surface.

Today’s Solutions
Terra Midstream found that at least 60 percent of our clients are reusing their produced water by treating it (recycling), and 20 to 25 percent are blending produced water with groundwater/brackish sources for hydraulic fracturing purposes. To speak generally, I believe that of all the produced water coming online in the Permian, 8 to 15 percent is being used for recycling and completions purposes, 20 to 40 percent is being used in injection wells as a recovery method and up to 50 percent of the water is being disposed.

Given the mentioned availability of produced water, disposal permitting challenges and a limited availability of groundwater sources in areas of the Permian, E&P companies are blending produced water and groundwater based off parameters that engineers identify as the “right ratios.” This is a synergistic solution that helps E&Ps save on sourcing and disposal cost.

In addition, this blending helps control chemical cost and enables operators to relieve bottlenecks in their produced-water infrastructure. In some areas, E&Ps are saving up to 0.80/bbl due to the high cost of groundwater. In other areas, recycling is not the best option due to the poor quality of produced water that comes to surface. Nonetheless, blending both groundwater and produced-water sources is on the rise stemming from cost-driven management decisions and regulatory compliance.

spwm ortega4What Blending Means for the Bottom Line
Historically, and in many cases currently, pressure-pumping service providers were telling E&P companies what concentrations of chemicals were needed to successfully treat a job. This process starts by sending a water sample from the E&P company’s field to the pressure-pumping company’s lab.

There, a series of tests are done to ensure the fluid is acceptable. At Terra Midstream, we have adapted to client needs by manufacturing automated blending units equipped with TERRA Live, a cloud-based communication system that collects and saves realtime water qualities in remote areas. This lets E&Ps see the changing water quality and its effects on chemicals and procurement cost.

The blending units have two fluid inlets, each with an automated proportioning position control for precise fluid blending. This new technology is capable of automated blending based on the target parameter operators desire to benchmark: pH, ORP, electrical conductivity (TDS) or a desired blend ratio.

Measuring pH keeps the fluid in a stable state in regard to storage and chemical compatibility. ORP is a measurement of the oxidation-reduction potential. This provides clarity on the likelihood of bacteria having a habitable environment or living conditions in the fluid system. Bacteria is not favorable because it may cause biofilm buildup and/or proliferation of microbes. This will result in plugging and production losses.

Electrical conductivity in the water is measured so that total dissolved solids are properly managed. The formation has salt and charges of its own, and by measuring the TDS, engineers can determine how compatible the fluid is with the formation and how the fluid will behave with the desired rheology and chemical doses.

Diving deeper into the water data, we have identified that many of these recommended doses for pressurepumping companies are not reflecting the mechanical and chemical properties necessary to provide E&Ps the best and cost-effective fluid. This does not mean the pressure-pumping companies are somehow at fault. This just means that water quality is constantly changing, and measuring it in real time can save E&P companies significantly.

What Does This Mean for the Industry?
In some cases, sourcing groundwater is not the best alternative and using produced water only marginally affects the chemical cost. This, in turn, has affected how right-of-way access is negotiated and how midstream companies can now send water to fracs and make a profit.

The water-sourcing landscape is shifting, giving midstream companies opportunities to positively impact their profitability for a certain disposal network when they sell water to a nearby completions operation. As produced water rises to the surface, synergistic solutions derived from data-driven project managing decisions will continue to solve the most complex problems.

With that said, it is important to now analyze how these synergies fit into the constantly changing Permian landscape. Aggressive E&Ps who only intend to flip their acreage may not be incentivized to reduce chemical, sourcing and disposal cost. Conservative E&Ps who intend to remain competitive and save as much as possible are highly incentivized to implement such strategies.

spwm ortega5Why don’t all E&Ps use produced water for completions activity? The answer to that is land and produced-water contracts. New Mexico has jumped in the saddle in regard to producedwater utilization and regulation. House Bill 546, which is also known as the Fluid Oil and Gas Waste Act, was passed by the Senate on March 13, 2019. This bill gives the Oil Conservation Division, which regulates oil and gas activity, more power to address environmental concerns around produced water and incentivizes oil companies to take ownership.

This is just the beginning of finding value in the produced water. Not too long ago, produced water was never considered a part of the completions cycle, and I advocate for the next synergy to involve finding alternatives to disposal wells: the temporary solution to the Permian eco-system.

 

Authored by Jose Ortega, Vice President, Terra Midstream, a Terra Oilfield Services Company