BISMARCK – An alternative method for reducing the volatility of Bakken crude will be tested next year as state regulators report a “significant increase” in noncompliance with oil conditioning this winter.
The North Dakota Industrial Commission gave approval this month for Hellervik Oilfield Technologies of Bismarck to test a prototype of a new technology for conditioning oil.
It’s the first alternative method proposed to the North Dakota Industrial Commission since an oil conditioning order took effect on April 1 requiring oil producers to remove more volatile gases from Bakken crude before it’s shipped.
The new requirement, which followed fiery train derailments involving Bakken crude, aims to make Bakken crude safer when being shipped by rail.
The order requires Bakken crude to have a vapor pressure no greater than 13.7 pounds per square inch. Currently, most companies comply with the order using equipment known as “heater treaters” that separates oil, gas and water, and setting their equipment to specific pressures and temperatures.
With the onset of colder weather, more operators are having a difficult time complying with the order using that method, said Lynn Helms, director of the Department of Mineral Resources.
“We are seeing, especially following the really windy days, an increased number of facilities that are out of compliance and having to be adjusted,” Helms said.
When operators are out of compliance, they have 48 hours to correct the situation, and the oil is not allowed to leave the location until it’s at the correct vapor pressure, Helms said.
“The noncompliant oil isn’t going anywhere,” he said.
The new method proposed by Hellervik is an alternative to heater treaters and could alleviate some of those problems for operators, Helms said.
“It shows real promise to be a big improvement in oil conditioning over the standard heater treater,” Helms told the Industrial Commission. “We think it’s important to give Mr. (Lowell) Hellervik the opportunity to test it.”
The new units are expected to be installed in the field in the first quarter of 2016. Because the technology is new, field inspectors will closely monitor the units for the first year of operation to make sure it’s working as advertised, Helms said.
Hellervik Oilfield Technologies, headed by CEO Lowell Hellervik, has provided field equipment to Bakken oil companies since 2013. The company also has modular natural gas processing units.
“Our mission is to eliminate natural gas flaring and help the mission to provide safer transport of crude oil, whether by pipeline or rail,” Gary Minard, an industrial engineer who works for Hellervik, said during a hearing.