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MoU Signed for Queensland Wind Farms

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The global energy trend is towards cleaner energy as evidenced by the UK strategy for greater energy independence. A deal for Queensland that expects to plant the seed for more renewable energy projects and boost and support innovative industries in the region.  There have been Memorandums of Understanding (MoU) signed on wind energy world-wide, such as the MoU between API and OOC. Now, a MoU has been signed by Stanwell Corporation and RWE to deliver Stanwell’s 9 – 10GW pipeline of renewable energy assets across Queensland. The MoU has identified RWE’s Theodore Wind Farm (TWF) near Biloela and a second wind farm in the early-stage development in Southern Queensland.

With the thrust on greater clean energy forming the backbone, this partnership between publicly owned energy Stanwell and global company RWE is to commence with the development of two new wind farms in Central and Southern Queensland by 2029. Together, these two developments will add an additional 1.8GW back into the regional communities. The partnership will now enable negotiations on public ownership, equity, and offtake models for the projects. TWF is set to be built on a 46,000-hectare site 30 km east of Theodore and 40 km southwest of Biloela in Queensland. TWF proposes to include 160 wind turbines on the site as well as a battery storage facility with the potential to host a solar farm.

The wind farm will have the capacity to generate enough electricity to power around 410,000 Queensland homes. When given the green light to start major works, the structural steel fabrication project is expected to take up to four years to complete. TWF is expecting to require up to 500 jobs at the peak of construction and a further 50 ongoing jobs over its projected 35-year operational life. RWE is committed to prioritising local employment and engagement with Queensland businesses whenever possible. The second renewable energy project identified through the MoU will be a 720MW wind farm in its early-stage development. No further information has been released on this second project. The proposed wind farms to be developed under the MoU are expected to be completed by 2029.

Source: https://www.projectory.com.au/article/mou-signed-for-two-wind-farms-that-will-boost-renewables-and-jobs-in-qld

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Belmont Timber gets new ELGi Compressed Air Systems

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A new compressed air system featuring two ELGi EG series oil-lubricated screw air compressors has delivered reliability and energy efficiency gains to a building products manufacturer in Sydney. Belmont Timber, a manufacturer of engineered frames and trusses for the building industry, needed to modernise its ageing compressed air equipment, which was causing manufacturing delays and increasing costs. ELGi Equipments, one of the world’s leading air compressor manufacturers and renowned for enhancing the energy efficiency of its air compressors, with partner Pulford Air & Gas, came to their assistance with two ELGi EG series oil-lubricated screw air compressors for Belmont’s factory in Sydney. To fabricate engineered frames and trusses for the building industry at its 20,000 m2 site, Belmont Timber needs a reliable supply of compressed air to power the machinery. The older compressed air equipment was unreliable and needed increasing maintenance, and was causing a noticeable rise in power consumption. Belmont Timber called on Pulford Air & Gas, its long-standing compressed air partner and one of ELGi’s authorised partners, for a new compressed air solution. On the advice of Pulford Air & Gas, Belmont Timber selected two ELGi EG30 oil-lubricated screw air compressors with refrigerated dryer, oil-water separator, downstream filtration, and heat induction bending services to meet their needs.

Gary Walker, Managing Director at Belmont Timber, said, “Compressed air is essential to our productivity and much of our manufacturing process is dependent on a reliable supply of compressed air. Take for example, our nailing guns used in preassembly. If the compressed air pressure is incorrect, the nails will hang out of the timber, requiring additional work to be carried out to ensure that quality management remains in place. “We had started to get some issues with the reliability of the ageing compressed air equipment, and it required more maintenance. In addition, we noticed that our power consumption was going up significantly. “Pulford Air & Gas has been looking after our compressors for a very long time, so we trusted them to present the best solution to meet our requirements. Since installation, the ELGi EG30’s has provided a reliable supply of compressed air. And, while we haven’t run the numbers yet, we expect to see energy savings as a result of the upgrade.”

The ELGi EG series of oil-lubricated screw air compressors deliver best-in-class energy efficiency. ELGi’s high-efficiency airends are equipped with in-house eta-V profile rotors, with the 4/5 lobe combination, designed to run at optimum speeds. This unique design reduces pressure losses, and together with the OSBIC process (Oil Separation by Impact Centrifugal action) 3-stage separation, increases efficiencies. Ramesh Ponnuswami, Executive Director, ELGi OSEA, said, “Pulford Air & Gas worked with Belmont Timber’s requirements to specify the best compressor solution for optimum energy efficiency and reliability. Aside from delivering energy efficiency gains, the robust EG series compressors also presented a reliable solution. “Designed to meet Australian conditions, they are well suited to performing at extreme temperatures, from cold to hot and from dry to extremely humid conditions, ensuring maximum uptime.” The EG series is backed by ELGI’s industry-leading warranty, which includes a 10-year warranty on the airend, and a 5-year warranty on the compressor package, including the motor, cooler, separator tank, pressure vessel, fan motor, and controller.

Hydrogen Storage Fuel Background

Public-Private Partnership backs Hydrogen Engineering

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In what the Queensland government believes is Australia’s biggest investment in green hydrogen so far – almost $117 million — has been made by the Queensland and federal governments and a consortium to fund the front-end engineering design for the Central Queensland Hydrogen (CQ-H2) project at Gladstone. When completed, the engineering design will bring the project closer to a final decision, expected late next year. Green hydrogen can decarbonize oil and gas, manufacturing, heavy haulage, shipping, aviation, heat induction bending services, and other industries.  The project will be powered by renewable energy and is expected to produce 200 tons of hydrogen a day by 2028, rising to 800 tons a day by 2031. That is equivalent to fueling more than double Australia’s fleet of heavy vehicles. The hydrogen needs to be liquified or converted to ammonia for export and potentially local industry offtake.

The Australian Renewable Energy Agency (ARENA) will provide $20 million in funding, $15 million will be from the Palaszczuk Government and the remainder $81.8 million from consortium partners which are passionate about green hydrogen. These consortium partners are: Iwatani Corporation (Japan), Kansai Electric Power Company (Japan), Marubeni Corporation (Japan), Keppel Infrastructure (Singapore) and Queensland’s publicly owned Stanwell Corporation. Federal Minister for Climate Change and Energy, Chris Bowen, said projects such as this are critical to scaling up Australia’s green hydrogen industry. “The government is committed to making Australia a global hydrogen leader. Projects like the CQ-H2 Project could lead the way in exporting renewable hydrogen to the international market.

“Japan, Korea and China are three of our largest trading partners and have all made clear commitments to increase the use of hydrogen, with a focus on establishing international supply chains for imports,” said Minister Bowen.  Queensland Premier, Annastacia Palaszczuk said the international partnership highlights Queensland’s position as a global hydrogen heavyweight. “Because of the investments we’re making, the Queensland economy will reap the benefits of the global clean energy transition, while ensuring Queensland has more and cheaper, cleaner renewable energy to power our businesses and homes,” she said.  Developing a green hydrogen export industry in Gladstone will create significant economic opportunities for Queensland: project is expected to create almost 9,000 jobs, including in the steel fabrication industry, and over $17.2 billion in hydrogen exports in its 30-year life.

Queensland Treasurer and Minister for Trade and Investment Cameron Dick said it was the largest green hydrogen investment of its kind in the nation’s history. “It is … an endorsement of the Palaszczuk Government’s Energy and Jobs Plan,” he said. “The Palaszczuk Government is working hard to drive the state’s hydrogen industry forward, to create highly skilled jobs, especially in regional Queensland. “That’s why, through the Treasury’s Queensland Renewable Energy and Hydrogen Jobs Fund, we invested $15 million into this stage of the project.” The Queensland government believes the public-private partnership in the CQ-H2 project is within the top 10 hydrogen projects in the world, which includes the EU plan to replace Russian fuel with hydrogen. The project will complement other planned investments in a renewable hydrogen industry in the Gladstone region, including the Commonwealth Government’s Regional Hydrogen Hubs program. Michael O’Rourke, CEO of government owned energy generator and provider Stanwell Corporation said the project could create thousands of jobs and deliver billions of dollars in economic benefit. “We are proud to be leading the CQ-H2 project with our partners, which demonstrates our commitment to driving the development of Queensland’s hydrogen industry and other new technologies.

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How Steel Manufacturing Impacts Global Trade and Industry

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Steel manufacturing lies at the heart of modern society, playing a crucial role in the growth and development of various industries and global supply chains. Its final products can be found in our homes and offices, within our vehicles, as well as industrial machinery.  As a result, it has an extensive impact on global trade and industry. In this article, this blog aims to explore the many dimensions of steel manufacturing and fabrication, focusing on the key players, economic and environmental impacts, and coming challenges and opportunities.

Key Players in the Global Steel Industry

Steel mining projects and manufacturing sites employ millions of people within a multi-faceted global supply chain. The current steel industry generates trillions of dollars each year, with nations like Australia offering standard steel from a wealth of iron-ore, transported to leading steel-producing countries, such as China, India, and the United States, who are then responsible for the majority of global steel output.

From here, key industries consuming steel include:

Construction: The construction industry is the largest consumer of steel, capitalizing on its strength, durability, and ability to be molded into various shapes. This makes it an ideal material for building infrastructure, residential and commercial buildings, and bridges.

Automotive: Steel is a critical component in the automotive industry, too, found in the chassis, body panels, engine components, and suspension systems. Steel’s strength, versatility, and cost-effectiveness make it the material of choice for many manufacturers.

Machinery and equipment manufacturing: Steel is a core material in agriculture, mining plant and equipment, and industrial manufacturing, used to create components for heavy machinery, tools, and equipment.

Energy: The energy sector, including oil and gas, renewable energy, and power generation, relies on steel for constructing infrastructure such as pipelines, wind turbines, and power plants.

Shipbuilding: Steel is the primary material used in shipbuilding, providing the necessary strength, durability, and resistance to corrosion needed for marine environments. Ships, submarines, tankers for oil transportation and offshore platforms all require large amounts of steel for their construction and maintenance.

Economic and Environmental Impacts of Steel Manufacturing

Steel manufacturing often dictates the dynamics of various industries, such as structural steel construction and mining. Price fluctuations and market volatility can have far-reaching effects on international trade, often leading to the negotiation of trade agreements and the imposition of tariffs. Steel production has significant environmental consequences, including greenhouse gas emissions, resource consumption, and waste generation. As a result, sustainability in steel manufacturing has become a priority for many modern steel manufacturers.

Additionally, environmental regulations substantially impact global trade, as countries and companies strive to comply with new standards. Fortunately, innovative production techniques, such as introducing electric arc furnaces and developing new materials, have improved efficiency and reduced the environmental impact of steel manufacturing. What’s more, these advancements have also altered global competitiveness, with various nations and industry leaders investing in new technologies to maintain their market positions.

Challenges and Opportunities in the Global Steel Market

Overcapacity and market imbalances remain significant challenges for the global steel industry, while trade barriers and protectionism can further complicate matters. Geopolitical tensions can also have a profound effect on the steel trade. With that said, there are opportunities available for growth in emerging markets, particularly for Australian steel producers and those adhering to Australian standard steel.

Closing Thoughts

It is clear that the steel industry has become a driving force behind establishing a thriving global steel trade, creating an interdependence among nations that encourages collaboration, but is also used as a tool amid geopolitical tensions. In the coming decades, demand is only expected to increase with modern economies, likely leading to a new evolution of manufacturing processes and the wider steel industry to become more environmentally and socially conscious.

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ELGi Enhances Energy Efficiency of Air Compressors

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ELGi Equipments, one of the world’s leading air compressor manufacturers, has enhanced the energy efficiency of its AB series oil-free screw air compressors, realising improvements in specific power consumption and increases in free air delivery across the range. For additional energy savings, the three larger models in the range now include a super-premium efficiency IE4 motor as standard. Contaminant free and high-quality compressed air that meets the stringent requirements of ISO 8573-1 “Class 0” standards is critical for many sensitive applications that operate across a broad range of industries such as in the food and beverages sector, the pharmaceuticals and medical sector, and the electronics sector. Available from 11 to 110 kW, the water injected AB ‘Always Better’ series of oil-free screw air compressors from ELGi meet these stringent requirements, delivering certified “Class 0” high quality air in compliance with ISO 8573-1 and ISO 8573-7.

ELGi has recently enhanced the performance of the AB series models, delivering improvements in terms of both specific power consumption and free air delivery. This includes an average 10 percent improvement on the turn down ratio across the variable frequency drive (VFD) range. For the customer the result of these improvements is twofold: enhanced energy efficiency and reduced power consumption. In addition, the 75 to 110 kW models are the first in the series to now come as standard with super-premium efficiency IE4 motors, which exceed the current Minimum Energy Performance Standards (MEPS) of Australia and New Zealand for 3 phase electric motors. These motors deliver further energy efficiency and reliability gains as well as a higher service factor and lower waste heat output and are being gradually used in energy-efficient electric vehicles as well. The AB series has been engineered using heat induction bending services to deliver maximum uptime and reliability, while bridging the gap between energy efficiency and low cost of ownership.

ELGi’s uniquely designed airends are equipped with in-house developed η-V profile rotors which reduce pressure losses and precise rotor clearances resulting in best-in-class energy efficiency compressors with higher flow and lower specific power consumption. Compared to other water-injected units, the AB series airends run at slow speeds. The result – long bearing life, high reliability, low noise levels and reduced wear & tear. The AB series has a closed loop circuit developed via pipe fabrication which does not need RO water or any other form of water purifying system. They also come with an auto water replenishment mechanism, as well as built-in sensation cycle. This reduces power consumption, eliminates any requirement to replace an RO element which therefore reduces maintenance costs. The use of roller bearings as opposed to the conventional use of hydrodynamic bearings additionally contributes to an overall low cost of ownership. This eliminates the requirement for an additional water pumping circuit. It ensures consistent airend performance, and it also results in up to a 14% lower unload power and energy cost savings, as well as lower rotor and bearing wear.

Whereas traditional oil-free compressors have 2 stage airends with 2 pole motors, the AB has a single stage airend and 4 pole motor, significantly reducing associated maintenance requirements and costs. Maintenance costs are also kept low thanks to no requirement for intercooling, a splash lubrication system, as well as less number of consumable and wearing parts. Superior energy efficiency and zero mineral oil residue ensure a minimal environmental impact, thereby lowering the customer’s carbon footprint. Reliable, energy efficient with best-in-class life cycle cost, the AB series produce high-quality air, free of microbiological contaminants, with free air delivery (FAD) from 0.82 to 15.85 m3/min.

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Three Metal Fabrication Stocks to Watch Out For

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The demand for metal fabrication faced a major challenge when it was badly hit during the COVID-19 pandemic, and even now the industry has been witnessing deceleration in demand of late due to muted customer spending. There are other headwinds as well, such as a labor crisis, coupled with the ongoing supply-chain issues and persistent shortages of critical materials. While these factors are affecting the fabrication industry’s production output, certain industry players are expected to gain from their cost-management efforts, focus on improving efficiency and investment in automation. This blog will cover three fabrication stocks in this regard and will try to identify what makes these companies stand out from other metal fabrication stocks.

The Timken Company

The company continues to witness new business wins in new markets and regions. Its diversity in terms of end market, customer and geography, product innovation and engineering expertise provides it with a competitive edge. Underlying customer demand and end-market momentum remain strong across most of its sectors. Apart from strong demand, earnings growth will be supported by benefits from price realization, growth initiatives and operational excellence initiatives. Timken continues to pursue strategic acquisitions to broaden its portfolio and capabilities across diverse markets, focusing on bearings and pressure vessels, adjacent power transmission products, and related services. It recently inked a deal to acquire GGB Bearing, which boasts a portfolio of metal-polymer bearings, serving a wide range of industries. This acquisition provides strong synergies and expands Timken’s business by adding products with solid growth outlook.

Norsk Hydro ASA

Higher all-in metal and alumina prices, and record high results in Extrusions contributed to Norsk’s solid results during 2022. Norsk has been adjusting capacity to meet market demand, and continues focusing on reducing costs and improving operational excellence, which will help drive margins. It continued to progress on its Hydro 2025 strategy in the fourth quarter of 2022, both strengthening its position in low-carbon aluminum and growing in the new energy areas. Greener aluminum with a lower carbon footprint is necessary with aluminium tariffs being levied on carbon emissions. In the first quarter of 2023, Norsk’s sales were 45% higher year over year, supporting its target to double the sales of greener products by 2025. Extrusions remain a key growth area in NHYDY’s 2025 strategy and in the third quarter of 2022, it decided to invest in 12,000 tons of additional capacity at its extrusions plant in Rackwitz, Germany.

Northwest Pipe Company

Northwest’s Engineered Steel Pressure Pipe business has been witnessing solid bidding and a strong backlog for a while which bodes well for the segment. The Precast business continues to perform well and its pipe spool fabrication order levels are expected to grow in the near term, leading to further margin expansion, backed by a robust precast market. Rising demand for developed water sources and the pressing need to upgrade, repair and replace the aging U.S water and wastewater systems present a huge opportunity for Northwest. Backed by a strong balance sheet and solid liquidity, Northwest continues executing its growth strategy. In October 2021, it acquired ParkUSA, a precast concrete and steel fabrication-based company that develops and manufactures water, wastewater, and environmental solutions. This marked Northwest’s third major transaction in just more than three years. The ParkUSA integration remains on schedule and is steadily contributing to the Precast segment’s performance.

Closing Call

An interesting observation from the analyses of the three stocks is that there is no single contributor to their rising potential. While Timken has benefited from strategic acquisitions, Norsk has focused on green energy areas and Northwest has a robust steel pipe business which is driving growth. Thus, in the challenging metal fabrication world, it is important to focus on one’s strengths while managing macro and micro economic headwinds – important lessons for other fabrication companies!

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Mitsubishi Power Receives 55MW Geothermal Power Plant Order From Pertamina

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Mitsubishi Power, a power solution brand of Mitsubishi Heavy Industries, Ltd. (MHI), has received an order from PT Pertamina Geothermal Energy (PGE), the geothermal energy subsidiary of Indonesia’s state-owned oil and natural gas corporation PT Pertamina (Persero), for a 55 MW power generating unit comprising a steam turbine, generator, and related  mining plant and equipment for the Lumut Balai Unit 2 geothermal power plant. The turnkey contract for the development of the power plant in the Indonesian province of South Sumatra will be conducted with Mitsubishi Corporation, Chinese construction company SEPCO III Electric Power Construction Co., Ltd. (SEPCO III), and local major civil engineering and construction firm PT Wijaya Karya (Persero) Tbk. Commercial operations are scheduled to begin in 2024.

The development site for the Lumut Balai II geothermal power plant is about 290km southwest of the city of Palembang in the southern region of Sumatra, at an elevation of approximately 1,000 meters. The project aims to mitigate the effects of climate change by reducing ESG risk for industries such as Oil and Gas and contribute to the Indonesian government’s target for 23% of the country’s power supply to be derived from renewable energy sources by 2025. PGE has a received a yen loan (official development assistance) from the Japan International Cooperation Agency (JICA) to conduct this project. Mitsubishi Power will be in charge of the basic design of the geothermal power generation facilities, and will supply the steam turbine, generator and other main accessory equipment for steel fabrication. Utilizing its technical expertise and knowledge gained from its decades of experience as an EPC contractor, Mitsubishi Power will also dispatch engineers to provide guidance for installation and trial operation.

Commenting on the contract, Kazuki Ishikura, President Director of MHI Group local subsidiary PT. Mitsubishi Power Indonesia, said: “Indonesia has the world’s second-largest geothermal potential, and we are honored to have a hand in supporting power plants across Indonesia that leverage this massive potential – from the Darajat geothermal power plants in West Java, Kamojang geothermal power plant in Bandung and now, the Lumut Balai II geothermal power plant. It is our honor to be selected as a trusted partner for Pertamina Geothermal Energy to deliver secure and sustainable power to millions across the nation, and realize Indonesia’s renewable energy targets.”

Electric power demand in the country began to rise with the resumption of economic activity since the COVID-19 pandemic, and PGE is concentrating its efforts on building new geothermal power plants and increasing output. Mitsubishi Power has supplied a total of six systems for geothermal power plants in Indonesia, with a combined output of around 400 MW. This contract reflects the high regard held for Mitsubishi Power’s operational experience, technical capabilities, and commitment towards sustainability in manufacturing and fabrication. Mitsubishi Power provides comprehensive solutions for thermal and geothermal power systems – engaging in design, manufacturing and construction of plants in an integrated manner to ensure they produce the maximum output. It is an industry leader in geothermal power generation, offering systems ranging in output from 100 kW to 160 MW.

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Advancements in Drilling Technologies – Part II

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Continuing from the first part of the blog on drilling technological advancements, this blog will discuss a couple of newer drilling technologies. Industry adoption of these technologies is an indicator of success and, while these methodologies are doubtless expensive, they have shown to offer savings in resources and materials utilized to extract energy from oil wells and hence, they are being gradually adopted by the major oil and gas players. So, what are the other two drilling technologies to be discussed and what’s their point of difference compared to horizontal and multilateral drilling? Let’s find out in this blog.

Extended Reach Drilling

Extended Reach Drilling

An extended-reach well is one in which the ratio of the measured depth (MD) vs. the true vertical depth (TVD) is at least 2:1. Extended-reach wells are expensive and technically challenging as they require the involvement of heavy steel fabrication companies, however, they can add value to drilling operations by making it possible to reduce costly subsea equipment and pipelines, by using satellite field development, by developing near-shore fields from onshore, and by reducing the environmental impact by developing fields from pads.

Extended Reach Drilling allows producers to reach deposits that are great distances away from the drilling rig and this help producers tap oil and natural gas deposits under surface areas where a vertical well cannot be drilled, such as under developed or environmentally sensitive areas. Offshore, the use of extended reach drilling allows producers to reach accumulations far from offshore platforms, minimizing the number of platforms needed to produce all the oil and gas. Similar to horizontal drilling, Extended Reach Drilling uses the technology of the “RSS: Rotary Steerable System” that permit to steer a hole continuing the rotation of the drilling string with an improvement of the safety and the drilling efficiency.

Automated Drilling

Automated Drilling machine

Automated drilling is one of the oil industry’s most important innovation targets. The sources now being tapped, such as shale gas and coal-bed methane, require a very large number of wells and usage of pipe fabrication, and automating the drilling process would be an obvious way to keep the costs under control, and also gets around a problem which many sectors of engineering are experiencing. Automated drilling would be faster, more efficient, and safer, as it reduces the number of workers on site. In this R&D sector, Shell has developed an automated drilling system called SCADAdrill (SCADA being the acronym for supervisory control and data acquisition, a type of software used for automated factory and process control), and is a component of a new well manufacturing system that it is currently trialing in Europe and North America. The SCADAdrill system is used on the horizontal dewatering bores. Through sensors mounted on the drill bit, the system monitors the trajectory of the drill and its performance as it travels through the site geology and controls its path to ensure that it meets the top hole precisely. Automating drilling takes in three stages of autonomy: firstly, to mechanize the drilling equipment; secondly to monitor torque and weight on the drill bit and thirdly, to automate the entire process.

Conclusion

It can be seen that Extended Reach drilling and Automated drilling both bring in their unique flavors to the world of oil drilling technologies. A degree of technical expertise is required to ensure proper implementation of these methodologies and people and software have to be trained accordingly so as to maximize the benefits. It’s an exciting time to be in the midst of the oil and gas sector and these advancements are poised to take the industry forward!

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Advancements in Drilling Technologies – Part I

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Recent advances in technologies used for oil well drilling have enabled the energy industry to access new sources of oil and natural gas to meet rising demand around the world. These new technologies have also helped reduce the environmental impact of energy production by allowing more oil and gas to be produced with fewer wells. Advances in technologies play an important role in meeting global energy demand because they enable the discovery of new resources, access to harsh or remote locations and the development of oil and gas reservoirs which were previously not economically viable. This is the first part of a two-part blog which discusses these technological advancements in oil drilling.

Horizontal Drilling

Horizontal drilling is a directional drilling process aimed to target oil or gas reservoir intersecting it at the “entry point” with a near-horizontal inclination, and remaining within the reservoir until the desired bottom hole location is reached. While the construction of a directional well often costs much more than a conventional well, initial production is greater of a conventional well. Horizontal drilling provides more contact to a reservoir formation than a vertical well and allows more hydrocarbons to be produced from a given wellbore. For example, six to eight horizontal wells drilled from one location, or well pad, can access the same reservoir volume as 16 vertical wells.

Using multi-well pads via steel fabrication can significantly reduce the overall number of well pads, access roads, pipeline routes and production facilities, minimizing habitat disturbance, impact to the public and overall environmental footprint. Horizontal wells are usually drilled to enhance oil production and in some situations the improvement may be dramatic – enabling development of a reservoir which would otherwise have been considered uneconomic. There are many kinds of reservoir where the potential benefits of horizontal drilling are evident:

  • In conventional reservoirs
  • Thin reservoirs; Reservoirs with natural vertical fractures; Reservoirs where water (and gas) coning will develop; thin layered reservoirs; heterogeneous reservoirs;
  • In unconventional reservoirs
  • Shale gas/oil, tight gas/oil, CBM, heavy oil, oil sands, etc.
Multilateral Drilling

At times oil and natural gas reserves are located in separate layers underground and multilateral drilling allows producers to branch out from the main well to tap reserves at different depths. This increases production from a single well and reduces the number of wells drilled on the surface. A multilateral well is a single well with one or more wellbore branches radiating from the main borehole. It may be an exploration well, an infill development well or a reentry into an existing well.

These wells generally represent two basic types: vertically staggered laterals and horizontally spread laterals in fan, spine-and-rib or dual-opposing T shapes. A successful multilateral well that replaces several vertical wellbores can reduce overall drilling and completion costs, increase production and provide more efficient drainage of a reservoir. Furthermore, multilaterals can make reservoir management more efficient and help increase recoverable reserves. In shallow or depleted reservoirs, branched horizontal wellbores are often most efficient, whereas in layered reservoirs, vertically stacked drain holes are usually best.

Closing Comments

As observed, horizontal and multilateral drilling techniques offer more advantages in certain cases than conventional well development. Increased efficiency and greater productivity are some of the benefits while also minimizing the environmental impact in case of horizontal drilling. However, there are other new drilling techniques which are likely to add value to drilling operations in the near future. Those will be discussed in the second part of this blog!

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Calgary Stampede Returns with Oil Boom Vibe

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The biggest party in Canada’s oil patch is staging a comeback this year, fueled by soaring energy prices and a population eager to mark the end of two years of pandemic lockdowns. The 110-year-old Calgary Stampede is pulling out every nostalgic stop, from chuck wagons, to rodeos, to tapping movie cowboy Kevin Costner as parade marshal. Long a barometer of the Canadian oil sector’s health, this year’s festivities take place as oil trades above $100 a barrel, helping the province of Alberta post its first budget surplus in seven years.

Whether it also marks a last hurrah for the industry is an open question. Longer-term, Canada’s oil sector is facing an existential challenge as the world shifts away from fossil fuels and investors shun the spending excesses of the past. “I am expecting this stampede will be good because people are tired of being cooped up,” said Vern Kimball, who served as chief executive officer of the stampede during the most recent oil run-up from 2006 to 2015. But oil companies understand that high prices “come and they go,” sometimes in a matter of months, he said. “People in the oil patch are talking about paying down debt and returning money to shareholders.”

That’s a far cry from past decades, when global energy companies invested billions in the oil sands and investment banks vied to host the biggest and best stampede events. Invitation-only parties like FirstRowdy, hosted by FirstEnergy Capital Corp. — now Stifel FirstEnergy — became legendary for attracting thousands of boisterous attendees, rivalled only by Firewater Friday, thrown by Peters & Co. Ltd. Entry donations went to charities, helping the community as well as generating business at a time of massive deal flow, Brett Wilson, a FirstEnergy founder, said by phone. “We were raising hundreds of thousands of dollars off what was usually just a drunk-fest.”

Today things look a bit different. Stung by years of depressed oil prices, Calgary-based companies (including heavy steel fabrication companies) are being disciplined even as commodity prices roar higher. FirstRowdy hasn’t returned since it was cancelled in 2016 although Peters & Co.’s event will be back this year. Following a much-slimmed-down version of the stampede last year, and a complete cancellation of the event in 2020, organizers are expecting more than a million visitors in 2022, in line with pre-pandemic stampedes.

Companies including oil sands producer Suncor Energy Inc. and pipeline giant TC Energy Corp. are sponsoring fairground days as well as parties and pancake breakfasts for employees. Cenovus Energy Inc. signed a new four-year sponsorship agreement that includes sponsoring the “Saddle Bronc,” in which a rider tries to stay on a bucking horse at the daily rodeo, and is holding its first in-person event for staff in two years. “There is a huge buzz going on in the city,” organizer Robert Laidlaw, of Acumen Capital Partners said. “Things are better for the energy sector and people have been pent up for three years now and can finally go out and have some fun.”

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