This was good, except that production outstripped pipeline
capacity, especially for gas. It also glutted already saturated markets,
resulting in a price collapse. The best thing to do with gas was either to
flare it or not produce it all, and neither option was good for companies that
counted on cash flow from operations to pay for their capital expenditures and
private equity financing.
Martin was in a bind. He raised money for two different
projects. One was a plan to go into the Panhandle Gas Field and drill
horizontal wells to liberate the gas left behind by vertical drilling.
"Fish in a barrel," he gloated inwardly. And, it
worked. What he had not counted on was
the terrible condition of the 40-year-old pipelines that had weathered price
collapses and negligent owners. He had
"stranded gas" unless he wanted to pay the midstream company to
update the system.
"Good grief," he said. "I might as well buy my own midstream
company." But, buying a pipeline did not make sense. After all, he did not
know how long the gas production would hold up. or at what production volume.
Martin's other project was equally challenging. He drilled
horizontal wells in the Antrim Shale in Michigan, which was really close to the
hungry market of Chicago. But, the field was not huge, and there were no nearby
pipelines. Given that the wells had a productive life of about 36 months, he
could continue to time the development of the new wells to compensate for the
depleting ones for at least 5 or 6 years. But, after that, unless they found
another field, there would be nothing to produce into a pipeline. Given those conditions, no midstream
companies would touch him.
Martin found a solution:
small-scale, portable LNG facilities
He decided to contact the company and find out how to put in
portable LNG solutions, and instead of putting the produced gas into a
pipeline, the produced gas would go to the LNG plant, and then they'd put the
liquid natural gas in bottles to sell or put in a warehouse (rather than
flaring or not producing at all).
- Texas and Oklahoma Panhandles (old Panhandle Gas Field)
- Marcellus (remote parts of West Virginia and Pennsylvania)
- New Mexico stranded gas
- Utica (remote parts of New York and Ohio)
- Antrim (Michigan)
- New Albany (Indiana)
- Mancos (remote parts of Colorado
- Haynesville (Louisiana, East Texas)
- Fayetteville (remote parts of Arkansas)
- others...
Now Martin is looking for more available gas fields.
Contact me him if you'd like to explore the economics of getting a mini-LNG plant on your property.
Contact me him if you'd like to explore the economics of getting a mini-LNG plant on your property.
