Case Study: LOE Cost Reduction Optimization

Gathering and Compressor Modeling

 
Project at a Glance

Location

Cotton Valley Louisiana

Project Type:

LOE Cost Reduction

Challenges Identified

  • High Compression Lease Cost
  • Short Time Frame
  • Rental Contract Negotiation
Results
  • Reduced LOE by 50%
  • Reduced Pipeline Pressures

Project Overview

A major Midstream company solicited GCC to review their Louisiana Cotton Valley gathering and compression systems. The company was concerned that they were paying too much for compression costs based on current and projected volumes. The client had rental contracts up for renewal and were seeking to negotiate lower rental prices. GCC was tasked with identifying the actual field compression bhp required and to evaluate ways to improve the efficiency of the entire system. The system included 7 Caterpillar 3516TALE / Ariel Compressors (9,380 bhp) with a combined monthly rental cost of over $140,000/month. The field data indicated that these units were a mix of two and three stage CAT 3516TALE compressors with an annual fuel cost of $2.2 million.

Action

First, GCC gathered field data and modeled the complex gathering system. The system, after vetting, showed a pipeline efficiency of 50%, down to a very low 5%. The system was modeled at the compressor station with two different scenarios: one with an inlet pressure of Ps 90and the second at Ps 130. We used a discharge pressure held at 1375 psig for both scenarios. We expanded the model to show production decline curves of 70% ‐80% per year. In some cases, the model showed the gas was moving in the opposite direction than the client thought, due to vari‐ ous piping segment constraints. When two of the CAT 3516TALE’s were removed from the system, we determined the elimination made only a 2 psig difference in the field gathering pressure. Further, we found that if we replaced a total of 200 ft miscellaneous gathering pipe, we would be able to improve efficiency and remove additional bhp from the field.

Result

The overall result of this project was the reduction of the field compression from 9,380 bhp down to 3,024 bhp. This reduction generated $1.2 million in savings to our client in fuel costs, and $72,500 /month in rental costs for an overall savings of $2.7 million per year. The payout for all gathering and compression modifications was 13 months. Not only did GCC reduce the clients LOE costs but also reduced gathering pressures in the field.

GCC INC.
10200 E. Girard Avenue
SUITE B-410
DENVER, COLORADO 80231
303.400.4300 MAIN OFFICE
WWW.GCCINC.US

For more information contact:

Wayne Sartori
303.378.7911 Mobile
303.325.2100 Office
wsartori@gccinc.us