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Anadarko Unveils its Central Oil Stabilization Facility in Northern Colorado

From the Greeley Tribune.


That’s the only way to describe the massive facility Anadarko Petroleum plans to open in December.

Billed as its latest and greatest weapon in the war against fugitive emissions, an effort to reduce its environmental footprint, the Central Oil Stabilization Facility is lauded as Anadarko’s latest technological advance, plopped on top of 67 acres in south-central Weld County.

The massive site straddles Weld County roads 49 and 30, 12 miles east of Platteville, among a landscape dotted with random industry equipment and well sites along a country road.

Anadarko officials unveiled the new facility in a private tour in October, showing off the facility they say will take thousands of trucks off the road, reduce well-site emissions, take equipment off the landscape and reduce the company’s growing footprint.

“We’ve been forced to innovate. Times have changed, and we want to be better operators and we want to maintain our (social) license to operate.— Ed Shicktanz, Anadarko health, safety and environment representative

The facility, with a complex contortion of pipes, massive heating towers, more tanks, more pipes and one massive 227,250-barrel storage tank lined by an impenetrable synthetic liner, is a sight to behold.

The noise of systems running and humming is palpable. Workers can be spotted welding throughout the plant working to ready it to open. Trucks with the word “Safety” plastered on each side seem to cruise along a makeshift road surrounding the facility. As many as 200 contractors helped put this conglomeration together, but it will take less than a dozen to run it every day.

The plant takes the place of the separation equipment that dots the landscape at individual well pads, as well as individual pads’ vapor recovery units that chew up fugitive emissions on site.

In three years, the company has moved from the traditional one well per well pad to several wells per pad with several storage tanks, to tankless facilities.

The Centralized Oil Stabilization Facility is the next generation in that evolution.

As the company moves forward, it will operate its well pads with no storage tanks on site, instead piping crude directly from the wellhead to the stabilization facility, never once offering a chance to allow fugitive methane emissions that naturally emanate from the bubbling crude to hit the atmosphere.

“I’ve never seen on the production side of our operations a facility like this,” said Ed Schicktanz, a health, safety and environment representative for Anadarko. “I’ve been doing this 34 years. You see the tanks like (those at the facility) in refineries. I’ve never seen a facility like this in the upstream oil and gas business.”

Company officials dreamed up this industrial complex two years ago when they made a 100,000-acre trade with Noble Energy, which consolidated each companies’ Weld operations into a north-south divide, rather than the patchwork quilt it had been. Anadarko took the southwestern portion of Weld, while Noble took the northeast.

Anadarko slowly has been building the plant since February 2014, and it is scheduled to be commissioned the first week of December. To date, in addition to the sprawling network of steel, tanks and towers at the facility, the company also has built 200 miles of gathering pipe to move oil from wellheads to the facility.

Company officials intend to keep their existing infrastructure in the field. That means existing well pads will stay as they are, and some of its older, vertical wells will continue to have storage tanks on site. The economics of these low-producing wells wouldn’t justify the cost of building infrastructure to connect to the oil stabilization facility, officials said.

“Everything built in the last two years will come here,” said Joe Straley, a production supervisor for Anadarko during the facility tour. “About 90 percent of our total production will come through here.”

The company produces roughly 100,000 barrels of oil per day now, and officials expect that number to stay flat in 2016. The Central Oil Stabilization Facility can handle 125,000 barrels of oil per day, to ship it directly to the West’s oil trading hub in Cushing, Okla.

“We’re not making quite 125,000 right now,” Straley said. “Part of it is the economy. With oil prices dropping, we’re in a downturn, so we elected to invest our money in other areas in Colorado. We’re not drilling wells with the level of activity we were a year ago.”

During the two-year construction phase of the facility and building up its pipeline network, Anadarko began switching its program from oil storage tanks at each site to tankless facilities on newer facilities built. There, the oil was separated at the wellhead and could be moved off-site into the oil gathering pipelines.

The Central Oil Stabilization Facility goes a step beyond, by taking the separation function off the well sites. The oil is separated from the natural gas and natural gas liquids, both of which are piped off-site to different existing processing facilities, designed specifically for those hydrocarbons.

This new mega-project came just in time in an environment in which regulations have been getting tougher on the industry amid a clamor of public concerns about the industry’s effects on its surroundings.

Just a few months after construction started, the Colorado Oil and Gas Conservation Commission implemented new, stricter emissions rules. The paperwork involved in documenting compliance had many company leaders envisioning foot-tall stacks of paper atop their desks in a regulation nightmare.

Reducing emissions from sites will take much of that regulatory burden off Anadarko.

“With oil (storage) tanks on location, the oil itself wants to give off natural gas, so you have vapor recovery units sucking on that all the time to recover that gas and put it into the pipeline,” Craig Walters, vice president of operations for Anadarko, explained from his Denver office. “With this facility, we’re able to eliminate that infrastructure.”

That is one of the biggest pluses to the centralization facility, Walters said.

“The emission is a big story around the Centralized Oil Stabilization Facility,” Walters said. “To eliminate tankage off individual well sites and additional equipment, we’ve reduced the amount of potential fugitive emissions off those locations. This is a huge win in my eyes, from an environmental and emissions standpoint.

“We like to put every molecule of oil and gas through the sales meter, and this facility allows us the capacity to do that.”

Piping the product directly from the well to the centralized facility will not only eliminate the vapor recovery units and the potential for failure that always comes with industrial equipment, but it will take hundreds of trucks off the road.

The heavy trucks associated with the oil and gas fields contribute to the volatile organic compounds in the air, which help cause smog.

“When you talk about our gross oil production, and how many trucks it takes to pick up that oil, that’s about 600 18-wheelers a day,” Walters said.

As part of the environmental side of the company, Shicktanz applauds this next generation of footprint reductions.

“We’ve been forced to innovate. Times have changed, and we want to be better operators and we want to maintain our (social) license to operate,” Shicktanz said, “and this is the next step in being able to do that.”