Can Gas Blending Improve Your Bottom Line?

by New member roberts_scott_d on ‎05-01-2013 11:08 AM - last edited on ‎05-04-2013 12:29 PM by Visitor mmerlo18

Will I save enough money in fuel costs to recoup my investment? Am I being “greener” buy burning less diesel fuel and using cleaner burning natural gas in its place? Will I get the same amount of power out of the engine, and is it safe? These are several of the questions and concerns that come up when looking at options to convert an existing frac engine to burn both diesel and natural gas.  With the right system in the right application, the answers in many cases can be an extremely positive “Yes”!

 

The fact of the matter is that natural gas costs a lot less than diesel fuel.  For Well Stimulation operations, CNG and LNG can be cost effective options if the distance from the gas source to the job site doesn’t drive transportation costs too high.  If pipeline or field gas is available at the job site, the fuel cost savings are significant.  Regardless of the type of natural gas, be prepared to supply large volumes of it when running an entire fleet with engines that can substitute diesel with natural gas.

 

How can you burn field gas safely, maintain engine emissions certification, and not sacrifice performance? 

 

First, to effectively utilize field gas, the engine needs to be able to handle a wide range of fuel quality while still realizing maximum diesel substitution.  The system needs to be able to achieve maximum substitution while operating under load and while burning the quality level of field gas that is available in places like Marcellus and Eagle Ford.

The key to safely burning natural gas in a diesel engine is being able to fully integrate the gas system into the engine control unit.  No one can do this better, ensuring safety and optimum performance, than the engine manufacturer.

 

If you want confidence that you will maintain your current emissions certification, again the engine manufacturer is in a prime position to provide the right aftertreatment solution to meet emissions throughout the operating envelope.  Some may say that engine emissions are reduced when substituting diesel for natural gas.  In some cases this is true, while in others cases it may be worse.  This all depends on gas quality, operating conditions, and other environmental factors.  Ultimately, an engine manufacturer can properly size a Diesel Oxidation Catalyst correctly so that the operator can confidently run the engine knowing that they are maintaining the current diesel emissions certification.

 

In the end, all of these benefits are great but you still need to get the same performance that the engine delivers on 100% diesel fuel.  A system that can adjust the substitution rate during transient loads to maintain diesel performance, and can adjust to changes in gas quality without recalibration or other adjustments, will require minimal maintenance during operation and in between jobs.

 

A system that can do all of this will deliver maximum savings.  When burning field gas, the savings can be staggering, and the system will pay for itself in short order.  Caterpillar’s solution, Dynamic Gas Blending or DGB, was developed with all of these questions in mind.  No compromises on safety, performance, or emissions while delivering a system with that will provide customers with the highest cost savings opportunity.

 

When looking at options for burning natural gas with your existing frac fleet, what are the most important features and benefits that you look for?  Tell us which type of natural gas (LNG, CNG, pipeline, etc.) you see as the most viable to get the job done at the right cost!

Comments
by New member Odaat
‎01-25-2014 11:51 AM - edited ‎01-25-2014 12:01 PM

The only viable entries into the diesel/natural gas, or "dual fuel" or "blended fuel" market are from CAT (The Dynamic Gas Blend program), and American Power Group.    CAT's product has advantages in name brand and in fuel displacements at certain load levels, especially in high pressure applications.  American Power Group's dual fuel conversion has advantages in cost, ease of installation, and better reliability.  Other entries, such as those from Hythane and some others, have proven inferior to CAT's DBG and APG's products.  Based on the research I've done, it appears both products are going to have a nice market presence, and both would see a nice return on investment, with APG's having less upfront cost, and CAT likely claiming the DGB will have better displacement and provide a better ROI in time.

 

Even with the current rise in natural gas prices, the dual-fuel model makes a lot of sense, and does pose a compelling ROI/business argument, especially in applications where you can use on-site wellhead gas.   I should warn you, in my research, I think tiny little American Power Group's product is going to see a larger market presence than CAT's DBG, and an editor's pick article I wrote in this regard leans heavily toward APG.  I'm somewhat surprised CAT hasn't tried to gobble up APG, but it's likely because CAT doesn't seem interested in the vehicular dual-fuel arena, and that is APG's forte.   That said, I was only able to get one CAT representative to talk with me,briefly, while preparing my article about dual fuel,  whereas I could have probably included better information about CAT's Dynamic Gas Blend if someone from that program at CAT would have returned any of several phone calls.  If any of you in that department, or CAT's marketing, would like the opportunity to do so, especially after reading my article, I welcome you to contact me.  That said, CAT is CAT, and clearly the DGB is a solid product and a good idea for CAT.  CAT execs themselves publicly recognized APG as the only viable competing technology in this dual-fuel field, and seem to understand there will be many CAT "wins," (in fracking, etc.) especially from CAT loyalists, or, naturally, often when CAT engines are being used, but also that APG will have a solid presence as well, due to factors like the lower upfront cost and greater flexibility with various engine families.   While, again, I'll warn you that the article leans toward favoring APG, perhaps even over CAT's DBG program, it's a good read nonetheless.  If interested, go to Seeking Alpha's site and search for the article about APGI called "The Little Dual Fuel Engine That Could" - however, that is more of an investing article. The article that is more about these dual-fuel technologies is in the least recent, largest,  "Instablog" entry. It's quite detailed.  I regret to say that reports from the field is that CAT has delays trying to get the DBG product installed in time for head to head field tests, and that while APG's system is taking about a day to install, CAT's DBG is taking as many as ten days and extra mechanics to install, which, especially when added to a much larger upfront cost for CAT's DBG, is not sitting well with customers, despite the CAT branding.  The mining / oil / fracking / drilling is just very bottom line driven, so if CAT wants to compete with APG, they are going to need to simplify installation, reduce upfront costs, and improve reliability.

 

Again, I'd welcome contact by someone in CAT's DBG program who would wish to add, or clarify, or contest, any of the information in that article.

by New member Odaat
on ‎01-25-2014 12:28 PM

As a side note, naturally out of propriety people can't share brand names, so I don't know whether Collicutt and their customers also field tested CAT's DBG, but as to the reliability of the American Power Group duel-fuel conversion, upon making an additional 3/4 of a million dollar follow-on order this week, the CEO of Collicutt Energy Services said, "Many of our customers drill under some of the harshest operating conditions in North America. The proven reliability, performance and economic returns of the APG dual fuel solution under these circumstances has led to increasing demand from new and existing customers.APG provides our customers with a significant competitive advantage in a very bottom-line driven industry. Several of our oil and gas drilling and service company clients estimate a potential annual net fuel savings of over $1.0  million dollars per drilling rig using APG's dual fuel solution."

 


This would seem to answer your question as to whether you can save money by going with dual fuel or not. (I added the emphasis in the 1 million dollar savings per rig part, fyi.)  Talk to your CAT dealer - I think the DBG solution will serve you well...and if you want to comparison shop, talk to APG or a representative, like Linde or Cudd.

by New member ktxsahaj
on ‎12-03-2016 05:48 AM

As a side note, naturally out of propriety people can't share brand names, so I don't know whether Collicutt and their customers also field tested CAT's DBG, but as to the reliability of the American Power Group duel-fuel conversion, upon making an additional 3/4 of a million dollar follow-on order this week, the CEO of Collicutt Energy Services said, "Many of our customers drill under some of the harshest operating conditions in North America. The proven reliability, performance and economic returns of the APG dual fuel solution under these circumstances has led to increasing demand from new and existing customers.APG provides our customers with a significant competitive advantage in a very bottom-line driven industry. Several of our oil and gas drilling and service company clients estimate a potential annual net fuel savings of over $1.0  million dollars per drilling rig using APG's ktxgames

About the Author
  • In 2005, I started my career at Caterpillar as an intern in Kiel, after that I worked as a student and then a temporary employee. I finally became a permanent employee in 2008, working at the Marine World headquarters in Hamburg. Through all these years I was supporting and leading Marketing projects from various areas, including Electronic Sales Tools, Shows, Novelties etc. By May 01, 2011 my job role changed to the current one. In this position I am leading several Electronic Marketing projects such as all Marine and Oil & Gas Social Media activities.
  • I have been in the oil and gas industry for 34 years, primarily in technical sales and support roles for natural gas compression equipment. I have been with Caterpillar for 13 years managing application and service support for Caterpillar’s gas compression product group, managing technical service support for Caterpillar engines in Oil & Gas applications and managing product definition for Caterpillar’s Petroleum marketing unit. I am currently based in the Global Petroleum headquarters in Houston, Texas and am responsible for developing a worldwide Condition Monitoring solution for Caterpillar products used in the Oil & Gas industry. Prior to working with Caterpillar, I was with Halliburton Company’s gas compression rental business unit. There I provided technical support for applications and service in a variety of roles with the last 4 years as Manager of Compression Engineering. I have a degree in Mechanical Engineering from Texas A & M University. I am currently a member of the Gas Machinery Research Council’s (GMRC) Project Supervisory Committee and active in the GMRC’s Gas Machinery Conferences.
  • I began tinkering with engines at age 9 when I built a radio controlled airplane and took the engine apart .  Then at age 12, my dad bought me my first motorcycle, a 1979 Honda XR80.  Several modified motorcycle engines and a few broken bones later my career in developing emissions complaint engines began. Now, I have over 20 years experience addressing CARB and EPA engine emissions and safety regulations in a variety of roles. From gasoline and LPG fueled  LSI engine testing, prototype development, calibration, and field testing to NRTL approvals with Underwriters Laboratory for use in hazardous locations . My career at Caterpillar as Emission Manager  began in December 2011 and I'm enjoying my transition to the industry.
  • I have been working in engineering since 1998, primarily in different aspects of engine design . I joined Caterpillar in 2005 to work on the design of internal engine components. I have been based in Houston and have worked on products specifically for the oil and gas industry since 2008.
  • I began my career at Caterpillar in 2003, developing marketing communications for many different groups including machine, product support and technician recruitment. Since 2008, I have been working as a Marketing Consultant with Global Petroleum to develop effective marketing communications materials and events.
  • As a native of Jakarta, Indonesia, I joined Caterpillar Jakarta District Office as marketing trainee in 1985. A mechanical engineer by education, I spent my early years in Machine, Product Support field assignments before joining the Engine Division as Jakarta District Sales Representative in 1990. In 1995 I relocated to Singapore as Marine Consultant, and later as Sr Sales Representative in Caterpillar Marine Power Systems Division, where I made the breakthrough sales of Cat 3600 propulsion engines to the booming AHT market in Singapore and Malaysian shipyards. In 2005 I moved to the Global Petroleum Asia Pacific as Sales & Marketing Team Leader, and promoted to Sales and Marketing Supervisor position in 2007. In GPAP, I secured several breakthroughs including the first collaborative sales (joint effort with CMPS) of 2x6M25 engines to Keppel Singmarine for Lukoil FSO (2006), and a rigset of 8 x 3616 to Jurong's first Cat-powered Semisubmersible 'West Sirius' (2007). In 2008, I led my India team in securing the largest contract with India's Oil & Natural Gas Corp (ONGC) to repower their fleet of 185 x D399 engines with 3512B ($57M), followed with ONGC Parts and Service Agreements and initiation of India Petroleum Strategy with our India dealers in 2009. In ASEAN I led the breakthrough sales of the C175-16 in the Singapore Jackup rigs market with 19 units booked in 2011 and another 41 to be shipped in 2012 and 2013. Since 2010 I have been working on nurturing Caterpillar network and partnership with other National Oil Companies in Indonesia, Malaysia, Vietnam and Myanmar. I believe that NOC will continue to provide Caterpillar and its dealers good business for prime product and support services in years to come.
  • I started with Caterpillar in 1993 at the Lafayette Large Engine Facility. Currently I am a New Product Defintion Manager for Land Drilling and Land Production Products. I am responsible for managing new product programs for diesel, gas and dual fuel products. I am experienced in Engine development and installation in Generator sets, On-Highway trucks, Motorgraders, Well Service Equipment, Oil and Gas Drilling Equipment.
  • I joined Caterpillar after 4 years in the USArmy Field Artillery. After assignments in fuel system and engine control system design, engine test and development, manufacturing, and gas engine/genset project management, I am presently responsible for large gas compression engine marketing functional requirements and launch of these new products.
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