There are several ways the Upstream Oil & Gas industry uses fresh water. One of the most obvious is the requirement for potable water on offshore facilities. This is currently provided by Reverse Osmosis (RO) units removing the salt from seawater. However, this industry also requires fresh water for the following: to drill mud used in well construction (drill water), to mix chemicals for well treatments (such as gels and acids), to improve the efficiency of some processes (such as crude desalting), and to remove some salts from seawater to inject into the oil reservoirs for pressure maintenance (Low Salinity Water Injection). This represents a huge worldwide market.
Another Upstream Oil & Gas market that represents a more suitable entry point for MI Systems is the management of onshore water production– especially in the United States. The recent significant increase in US oil production is a result of horizontal fracturing technology. However, these fracturing jobs require copious amounts of water – often millions of gallons. When this water flows back in, it contains a cocktail of chemicals that requires proper disposal. However this frac flowback water is only a small portion of the water management challenges facing Oil & Gas operators. The salt water that is native to most oil reservoirs is produced with the oil. Over time this water cut can be as much as 99% of the total fluids produced by an oil well. Although the salts in this produced water vary widely in chemical composition and salinity levels, this produced water is usually considered to be a hazardous waste and must be handled and disposed of accordingly. In Texas, for example, this water is usually piped or hauled to a water disposal well for injection back into the ground. Because of seismic events caused by saltwater injection, the citizens of Oklahoma are pushing for a ban on new water disposal wells. The states of Ohio and Arkansas do not allow any produced water injection and, as a result, water must be hauled out of state for disposal. This described water injection and transport represents significant operating costs for producers. When the price of oil dropped drastically in 2015, many producers had to shut down their wells or produce at a loss.
This is a huge market. It is estimated that the current onshore water handling requirement in the US is approximately 850 billion gallons per year. Texas alone injected some 250 billion gallons of water last year.
The fact that MI Systems’ technology can be easily designed for a variety of water types, as well as being relatively small and portable, makes it well suited for the Oil & Gas market.