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GE’s Engines to Power LNG Fueled Drilling Rigs in Marcellus

Source: www.gulfoilandgas.com 11/27/2012, Location: North America

To reduce the environmental impacts and improve the economic performance of their U.S. unconventional gas production activities, energy developer Seneca Resources Corp. and drilling partner Ensign Drilling have installed two of GE’s Jenbacher gas engines to power the first liquefied natural gas (LNG)-fueled drilling rigs of their kind in the Marcellus Shale region of Pennsylvania.

Seneca converted the power plants of two existing diesel-powered rigs to use cleaner-burning LNG in GE’s 1-megawatt Jenbacher J320 turbocharged natural gas engines. The Jenbacher units were combined with Ensign Drilling-designed rig packages to provide all the electricity needed by each drilling rig. The J320 represents GE’s first U.S. Environmental Protection Agency certified technology for mobile and stationary drilling applications.

Seneca Resources is a wholly owned exploration and production subsidiary of National Fuel Gas Company, while Ensign Drilling is one of the world's leading land-based drillers and well servicing providers for crude oil, natural gas and geothermal projects. Prometheus Energy Group, one of North America’s largest and fastest growing industrial LNG suppliers, is Seneca Resources’ turnkey supplier of the LNG and related equipment and services.

In October 2012, Seneca Resources and Ensign Drilling converted their first rig, which is operating in Lycoming County, Pa. The second rig was converted to LNG in November 2012 and was assigned to Seneca’s Marcellus Shale gas leases in Forest, Elk, Jefferson and McKean counties.

The gas-rich Marcellus Shale formation is located in sections of Pennsylvania, New York, West Virginia, Ohio and Maryland.

“We are excited to work with our partner Seneca Resources to implement this innovative project that is using LNG in GE’s proven Jenbacher gas engines to reduce the environmental impacts of energy production while giving communities in Pennsylvania the opportunity to share in the economic benefits of developing the Marcellus Shale gas reserves,” said Robert Geddes, president and CEO of Ensign Drilling.

Ensign Drilling operates 15 drilling rigs exclusively on natural gas in the United States—with 11 of them exclusively using GE’s Jenbacher gas engines. The latest project with Seneca Resources further underscores the oil and gas industry’s increased deployment of more efficient and cleaner on-site power solutions.

“Our fuel-flexible Jenbacher gas engine technology offers customers lower-emission on-site power generating capabilities, making it ideally suited to support Seneca Resources and Ensign Drilling’s LNG initiative that will serve as a model for other operators in the Marcellus Shale region,” said Roger George, North America general manager—Gas Engines for GE Power & Water.

Powering a drill rig with natural gas instead of diesel can result in 60 percent lower fuel costs. LNG also represents a cleaner alternative to diesel for the transportation industry and trucks, reducing overall combustion emissions up to 25 percent. Truck fleets also can often reduce fuel costs by more than 25 percent with LNG.

Unconventional gas is quickly becoming the most abundant source of natural gas in the U.S. and now accounts for about a quarter of U.S. natural gas production. By 2035, half of U.S. natural gas will come from unconventional sources, according to the U.S. Energy Information Administration. The boom in unconventional gas, up from just two percent of the total in 2000, has cut gas prices to record levels, reduced energy imports and set the country on a path to energy independence. It also is a major force driving the job market.

GE’s unconventional resources solutions, consisting of more than 40 technologies from across the GE portfolio, are addressing fundamental industry challenges, helping customers to improve operational performance, reduce their environmental footprint, increase resource recovery and drive demand for natural gas.

GE’s portfolio of innovative distributed power solutions give businesses and communities around the world the ability to generate reliable and efficient power by using a variety of fuels, both on or off the grid. GE’s distributed power technologies give customers—including industrial businesses, developing communities, government agencies that are managing disaster relief and other emergency power situations—the ability to generate reliable, more sustainable power whenever and wherever it is needed. GE’s distributed power portfolio includes GE aeroderivative gas turbines, Jenbacher and Waukesha gas engines and waste heat recovery solutions.

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