HIIT sub STP in the News
Houston Chronicle August 11, 2013
When the grid can’t get there, these companies will fill the gap
They provide temporary power where it’s needed in Eagle Ford
By Jennifer Hiller
Oil and gas companies in remote locations require power — and a lot of it — long before the electric grid can reach them.
Now companies that provide temporary power are in growth mode across South Texas as the region’s infrastructure catches up to the industrial demands of the Eagle Ford Shale drilling boom.
Among the companies adding locations is Scotland-based Aggreko, a global company with operations in Texas, including Houston.
It recently opened a service center and maintenance yard in Three Rivers to serve the Eagle Ford with generators and equipment such as chillers, cooling towers and refinery-grade heat exchangers. Agrekko also just opened a center in Midland, where the Permian Basin has become the busiest area for oil and gas drilling in the country.
Brian Fahnestock, a vice president and general manager of the mid-south region for Houston-based Aggreko North America, said the company can provide power to a number of well sites in a matter of weeks and often provides power to hundreds of acres at a time.
The wait for traditional utilities is driven by transmission infrastructure, which can take months or years to plan and build, Fahnestock said. But drilling rigs are moving across the region on an almost weekly basis, making it difficult to impossible for an electric provider to know where to add infrastructure until a well is already in place and producing.
“It’s a highly stressed infrastructure today,” said Fahnestock, who works out of the company’s Pearland service center. “It’s a constantly moving activity. We’re mobile and up and producing in a very short period of time.”
Jeff McPherson of Cactus Power and Light, which operates out of Pleasanton to provide equipment that includes 125- to 400-kilowatt generators, said that even if utility lines are near a location, they can’t service well sites.
“The smallest generators we use can run 20 houses,” McPherson said. “What we’re talking about is not a normal, little bit of power. It’s not like you can run a few lines here and there, and pow, those things are running.”
Cactus Power and Light recently had a client that was operating next to a power plant — something that may seem counterintuitive to outsiders.
Even after a well is producing, it is sometimes still run by generators, although often transformers and power lines are added.
“There’s a whole lot of work that goes into it, and a whole lot of money,” McPherson said.
Matthew Flemming, president of Houston-based HII Technologies, the parent company of South Texas Power in Goliad, said the company is continuing to add generators in South Texas.
He said he expects that more companies will want to start using generators that run on natural gas instead of diesel, although there are some hurdles in South Texas.
Many producing wells in West Texas and Oklahoma run on natural gas that is produced on-site, which helps eliminate flaring. But in South Texas, wells often produce so-called “sour gas” that has to be treated on-site with a scrubber, an extra step and expense that has made many companies choose diesel generators instead.
But Flemming said that a natural gas generator has significantly lower fuel costs, which may cause some companies to make the switch.
“Three or four years ago, it was a land grab in South Texas,” Flemming said. “When the market gets more stable, they get their pencils out and start to crunch numbers. They stop and say, ‘How can we do this more efficiently?’ ” Across the region, it’s not just well sites that have needed temporary power.
Thomas Tunstall, a research director at the University of Texas at San Antonio who has studied the economic impact of the Eagle Ford, noted that lodges and worker camps are running on generators.
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