NuVista Energy Ltd is proposing to expand its operations in the Wembley area. These expanded operations are being called the Pipestone Development Program. The proposed program includes plans to drill approximately 100 sour gas wells north of the Wapiti River. We will use pad drilling to minimize the surface impact. There will be less than 15 pad sites and drilling will be spread over a span of up to 15 years.
The Wapiti operating area, located both North and South of the Wapiti River, has significant potential due to the high-value condensate that can be produced along with the natural gas. Our team has become very proficient in identifying opportunities and improving economics for production in this region. By focusing our efforts in this area and using multi-well sites, we can recover this resource efficiently while minimizing our environmental footprint. The Pipestone Development Program is designed to ensure the resource is produced in a safe and environmentally responsible manner and with respect for the local residents and landowners.
The Wapiti area has seen a lot of drilling activity in recent years due to the liquids-rich natural gas in the Montney formation. NuVista has been operating in the area since 2008. Our current operations include:
The proposed Pipestone Development Program calls for a variety of construction and drilling activities to be carried out over the next 10 to 15 years. These activities will commence with a comprehensive stakeholder consultation program. NuVista sees stakeholder engagement as critical to the success of the Pipestone Development Program. Input from residents in the Wembley area is especially important to the project. Stakeholder contact and notification will be on-going throughout the life of the development program.
Once regulatory licenses have been obtained, well pad construction will commence. Plans call for multi-well pads to be constructed which will minimize our environmental footprint. While the wells will be drilled in phases, the initial design for the well pads will accommodate all the wells planned for each location. This approach will allow us to work with landowners to obtain the surface leases necessary for all phases.
NuVista uses state-of-the-art horizontal drilling technology. This technology allows for multiple wells to be drilled from one site, rather than individual sites. NuVista’s drilling operations will be conducted in a manner that places safety and environmental protection as our top priorities.
NuVista has received regulatory approval to drill its first Pipestone well in 2017. This well is being drilled and tested in order to maintain mineral rights. However, the well will not be put into production until other phases of the Pipestone program have been completed. Pending necessary approvals, additional wells in the program are scheduled to be drilled in 2018/2019, with 10 to 20 wells being proposed for this phase. After this initial phase, the pace of drilling will be slowed down to match the capacity available at various processing facilities.
The Pipestone wells are considered to be development wells. This means they are being drilled near a proven part of a natural gas pool. As each well is drilled, more information is gathered on the pool. This new information will be used to re-evaluate and refine drilling plans.
Typical industry operations after drilling include completion and flow testing of the wells. Completion refers to all the technical operations needed to finish the well and allow it to produce hydrocarbons. Flow testing helps the company understands the quality and capability of the gas reservoir.
Ground water is a critical resource and numerous measures are in place to protect ground water during completion activities. In the Pipestone wells, gas will be produced from the Montney formation. This formation is about 2000 metres below the formations that contain the ground water aquifers used for domestic water supply.
Every gas well has two barriers to protect the ground water. The first is surface casing. This is a large diameter steel pipe, cemented in place to protect any sources of drinking water from completion or production fluids. The second barrier is the production casing. This is a string of smaller diameter steel pipe that runs through the surface casing to the bottom of the well. It is also cemented in place and further prevents the flow of fluids that might harm the drinking water.
NuVista will use multi-stage hydraulic fracturing to stimulate the wells. Multi-stage fracturing allows for multiple points along the horizontal wellbore to be stimulated. This is an efficient and effective means to recover more of the hydrocarbons from the formation with fewer wells.
The hydraulic fracturing will be a very controlled operation that pumps fluids, predominantly water and a propping agent such as sand down the wellbore under high pressure into specific targeted zones within the formation. This process will create passages for the gas to flow more easily into the wellbore. NuVista will closely monitor each fracturing operation. Any flow of fluids into non-targeted areas would result in a sudden loss of pressure and operations would be halted. This loss of fluid outside of the zone of interest almost never occurs.
In order to complete and flow test the wells, some flaring will be required. This involves the burning of the natural gas and is governed by regulations. NuVista will not only adhere to these requirements but commits to minimizing the amount of flaring. We will provide notifications in advance to those residents who are in proximity to our locations where flaring is required. Once area pipelines are in place, it is possible to flow test many of the wells through the pipelines instead of flaring. NuVista’s goal is to flow test “in line” whenever possible.
A number of pipelines are needed both for the completion operations and for the production of natural gas. Plans call for pipelines to supply water and transport produced water back to a central site. By supplying water through this pipeline system, NuVista can minimize the number of trucks on the road, though some trucks will still be necessary. This design would also see numerous pipelines in a single right-of-way, in order to reduce surface disturbance. Where possible, the right-of-ways will follow natural boundary lines such as fences and roadways.
The Pipestone program will include a production facility located on the north side of Wapiti River. This facility, to be built by NuVista or a partner, will process the hydrocarbons and fluids from the Pipestone wells. The facility will separate the produced water, condensate and sour natural gas. The produced water will be stored in sealed tanks on site and then transported by pipeline or trucks to approved disposal sites. This design will reduce the total number of trucks that are on the road. Produced condensate will be processed and stored in sealed tanks on location and ready for pipeline transport. Sour natural gas will be separated and dehydrated on site. It will then be compressed for transportation in pipelines to a sour gas processing facility far south of the river. The Pipestone production facility will require regulatory approval and will be built in stages.
Gas from the Pipestone production facility will be processed at a sour gas plant currently under construction south of the Wapiti River. This plant is owned by Calgary-based SemCAMS U.L.C., a gathering and processing or “midstream” business. The Pipestone gas will be transported to the plant through a pipeline that SemCAMS proposes to build across the Wapiti River.
In addition to the plant south of the river, midstream companies are also in preliminary discussions with area petroleum exploration and production companies about building additional sour gas processing facilities north of the Wapiti River.
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NuVista Energy is committed to minimizing the impacts of the Pipestone Development Program. Specific initiatives include:
NuVista is committed to conducting its activities in a manner that protects the health and safety of its workers and the public while minimizing the Company’s impact on the environment. We believe that our outstanding performance in the areas of health, safety and environment (HSE) is essential to meeting the needs of our stakeholders while fulfilling our business goals.
Personnel at every level of the organization, including contractors, are required to comply with all company HSE policies and government regulations. Accountability for managing the safety of our operations is shared by all personnel.
NuVista has developed and maintains a Corporate Emergency Response Plan (ERP) for sour gas operations that meets or exceeds the requirements of AER Directive 71: Emergency Preparedness and Response Requirements for the Upstream Oil and Gas Industry. NuVista conducts emergency response training exercises based on its operations. Full scale exercises, spanning from worker deployment to mock emergency scenarios, are held annually.
The Pipestone Development Program will allow NuVista an excellent opportunity to use our extensive expertise and technology to develop a world class project. It will also allow us to continue to build and foster positive, long-term relationships in the communities in which we operate and reinforce our desire to be viewed as a good corporate neighbour.
NuVista is committed to on-going stakeholder communication for the lifespan of our operations. NuVista is a member of the Wapiti Area Synergy Partnership and will continue to be an active member. We welcome any comments, suggestions or questions you may have.
For further information or to discuss the Pipestone Development Program, please contact:
Manager Surface Land & Stakeholder Relations