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Let’s Take a Step Into The Future: Water Management
05/14/2020
Water management in oil and gas operations has become an industry itself. According to Bluefield’s report, “Midstream Water Management: U.S. Hydraulic Fracturing Strategies, Solutions & Outlook,” water management for hydraulic fracturing has been steadily growing from 2017. All indicators, according to the same report, say this trend will be kept for the next few years.
As demands for water management solutions increase, service companies are looking for new ways to optimize their ability to recycle and store this water.
Total Water Management Spent 2011 - 2028
According to Evan Tikka, senior consultant, at Wood Mackenzie, the water midstream sector growth can now be associated with long-term acreage dedications. WaterBridge has acquired almost 10 different systems which resulted in a 10-plus-year acreage dedication. ”From an E&P perspective, it’s been a year of a trust as we’ve started to see some of the larger U.S. independent and supermajors’ views change on the types of contracts and types of relationships that they’re willing to enter into with the water midstream players, characterized by longer-term acreage dedications and some larger divestments.”, Tikka says.
When asked if more E&P companies will be selling their water infrastructure assets to water midstream companies, Matthias Bloennigen, director of upstream consulting at Wood Mackenzie said ”The short answer is yes.” He also said that water midstream companies need to be thorough when researching assets to be purchased because E&P companies are selling ”their less strategic and underutilized water infrastructure assets”. Although these purchases may be risky for water midstream companies, there is a clear opportunity for them if they manage to integrate infrastructure and increase utilization.
From what cost is concerned, Laura Capper, president and CEO of EnergyMakers Advisory Group, stated ”Cost is absolutely a key driver to overall oil and gas profitability.” She also pointed out that for the big players, cost with water management will decrease over time as volume and resource contributes to the effectiveness of the water management programs. Smaller players will however have a more difficult time in keeping the costs low in the long run.
When referring to the challenges that water teams are facing in the year ahead, Rob Bruant, director of products at B3 Insights said ”Things will continue to be challenging on the regulatory front.” As an example, due to current regulations, New Mexico operators will have greater costs to dispose of the water into deeper formations. ”There is going to be a continued net movement of water from New Mexico to Texas, where the regulations are getting stricter but not nearly as strict.”
Andy Adams, director of water management and infrastructure for Select Energy Services, said ”The greatest issue I see is the logistical challenges of managing and sharing water. Everybody wants to share the water; everybody wants to reuse produced water. But the most difficult aspect of this is actually managing the logistics of delivering the water safely and on time.”
Source: https://www.hartenergy.com/exclusives/bringing-balance-water-demands-186176
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