US army helicopter...powering shale
gas sector.
Helicopter engines drill for gas, with gas
London, April 7, 2013
By Andrew Callus
Helicopter jet turbines that once flew for the US military are on a final, earthbound mission - pumping gas on home soil as part of an assault on costs in the shale drilling industry.
Operational for about a year now, a project led by Green Field Energy Services (GFES) is about to embark on a new stage, converting the makeshift pumps that are already half the price and twice as powerful as purpose-built diesel units to run even more efficiently, on cheap natural gas, sometimes straight from the fields they are drilling.
Backed since last year by finance from international oil company Royal Dutch/Shell, GFES has some 70 hydraulic fracturing "fracking" pumps operating using second-hand military jet engines that once powered army Chinook helicopters and US Navy LCAC landing hovercraft.
Another 70 will start work this year.
To be suitable for use in fracking, the jet turbines need to be of a specific size, at between 3,850 and 4,000 horsepower, although GFES says it uses smaller turbines from Bell Ranger helicopters - also ex-military stock - as mobile power generation units for the industry.
Mainly deployed in pairs, the turbines are light, reliable and powerful enough to double the fracking power of a standard truck-mounted fracking "spread" - the pumping gear set that forces a water, sand and chemicals mixture into cracks made in subterranean rocks to hold them open and push out natural gas.
The US shale drilling industry, which has boomed over the past few years, has also faced escalating equipment costs and now suffers from weak gas prices due to over-production.
But the weak price is an opportunity as well as a constraint. Gas is now one sixth the price of diesel on an energy content basis, and conversion is a burgeoning trend in a wide range of US industries.
Engineering giant GE is helping GFES with technology and equipment for the conversion.
Shell's loan of less than $100 million to privately-owned GFES is a tiny investment by its standards, and with just 140,000 horsepower operating so far in a North American market that boasts 17.6 million horsepower of pumping capacity, GFES and its turbine-powered spreads amount to a modest operation.
But Shell's Projects & Technology Director, Matthias Bichsel, is enthusiastic.
"We decided this was worth doing," he told Reuters. "We also put quite a bit of our own engineering into things like the housing to bring it up to our safety standards ... It's one way of coming with new ideas and good engineering to arrive at something which creates competition and hence dampens the increases in costs in the market."
PROFIT "VERY CLOSE"
And GFES, also funded through a high yield bond, has growth ambitions.
The company is "very close" to becoming profitable and expects to more than quadruple revenue this year to about $600 million from around $140 million in 2012, according to Rick Fontova, the company's president, who worked for 22 years at Shell.
The Lafayette, Louisiana company, 93 percent owned by its Cuban-born founder, chairman and chief executive Michel Moreno, also offers traditional oilfield services, and grew the military helicopter turbine recycling business out of expertise based on a "big boys toys" business, fitting them into yachts and motorcycles.
New turbines would be prohibitively expensive to use in fracking, but Fontova says GFES has a reliable supply of second-hand military ones, mostly made by engineering group Honeywell.
He says he has "a line of sight" on 100 more beyond the 70 that will be deployed this year, and that batches of 20 to 50 tend to become available at irregular times through the year.
"We are a service company that manufactures its own equipment. Our strategy was to implement this new technology," he said. "After that we intend to become an original equipment manufacturer." - Reuters
