CanElson Drilling Inc. (TSX:CDI) has a patent pending for the fueling of mobile equipment with stranded or flared natural gas. Stranded gas is defined as natural gas that is not being moved from the well to market due to a lack of infrastructure. CanElson has tested and evaluated the technology to utilize trucked Compressed Natural Gas on its mechanical drilling rigs. Initial tests have been very positive and indicate strong economics to support the next phase of development which includes implementing the technology on four of the Company's drilling rigs located in the Saskatchewan Bakken resource play during the second quarter of 2012. This next phase of development will implement the delivery of gas directly to the drilling rigs using mobile Gas Transport Modules. In the third and fourth quarters CanElson expects to expand the utilization of the technology into North Dakota and the Permian Basin of west Texas.
Bi-Fuel is a proven technology, consisting of CNG injected into the inlet air of a diesel engine. The natural gas can replace up to 60 - 70% of the diesel fuel when the engine is under load. Further savings are possible in winter because a rig boiler can be fired on 100% CNG, and there are other mobile diesel engine applications (e.g. fracture stimulation equipment). Using heating value, the current diesel equivalent value of CNG is approximately $30 per thousand cubic feet (mcf). By displacing a portion of diesel fuel use from its drilling rigs with CNG, there is a significant economic and environmental opportunity for the Company as well as its customers and the communities where the rigs work.
President and CEO Randy Hawkings says: "This is an exciting and unique opportunity for the company to provide cost effective solutions for our customers while increasing the corporation's profitability and reducing the environmental footprint of our operations."
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