Like much of the industry, the compression business has been significantly affected by the North American shale boom.

To put it plainly, the more production there is, the more need there is for compression, David Coker, senior vice president of Energy Transfer Technologies (ETT), tells Midstream Business.

“There is so much new production, it is having a huge impact on the market simply because so much compression is needed,” Coker says. “The compression business is growing like gangbusters.

“The more production there is, the more compression is needed to transport gas on pipelines,” Coker says. “In my opinion, one of the best ways to keep up with demand is ensuring that we are all working hard to get the job done.”

In demand

ETT is one company that offers the midstream industry leading-edge compression technology. The company describes its dual-drive technology as “the next generation in compression technology.” Its Dual Drive CA Series allows its gas-compression system to transition between electric and natural-gas driven compression depending on the economics and emission requirements of any given situation. And, according to Coker, allowing midstream companies a choice in their compression power can have a significant impact on the economics of a project.

“ETT’s Dual Drive Series allows our customers to switch their operations from the electric motor to the natural gas engine so they may come off the electrical grid during high peak times, which will help them significantly reduce demand charges,” he tells Midstream Business.

“We are able to reduce utility and energy bills by offering our customers the ability to use the cheapest cost fuel available, whether it is natural gas or electricity.”

Gas evolution

Since 2010, ETT has partnered with SEC Energy on packaging the dual-drive technology. A provider of gas-compression equipment, parts and services, SEC Energy worked with Caterpillar and Ariel to streamline the compression design, and the collaboration has led to the ability to “package a dual-drive solution for almost any requirement,” Frank Northup, director, sales and marketing, SEC Energy Products & Services, tells Midstream Business.

SEC Energy began operation in 2003 and by 2011 the company had packaged and installed more than 2 million horsepower for all segments of the oil and gas industry. This experience and weathering the industry’s storms, has given the company a unique perspective on the compression industry as it follows new trends throughout the business.

“The compression industry has been tracking the shale plays as they grow, develop and evolve,” Northup says. “All the new compression that we have packaged over the last few years has been following the shale-play activity. Things are picking up in the Permian, the Bakken and Eastern Colorado; we are seeing a fair amount of new compression going in around those areas.”

Equipped for the shift

Northup says that the real change in the business is the difference in gas quality due to the shift from dry-gas fields to richer gas plays. This transition has encouraged an adjustment in the engineering of compression products, Northup says.

The shift to wet gas is being felt by throughout the compression industry. The team at Valerus, which has offered compression solutions and aftermarket and contract services for many applications since 2002, has been keeping a close eye on the transition over the past few years helping midstreamers make equipment adjustments during the wet-gas evolution.

“We have a mixed fleet that includes different engine types, which allows us to provide customers with a solution in these wet locations,” Tanmay Desai, senior vice president of contract services, tells Midstream Business.

Emission control

Selecting a compression driver that is appropriate to the area is essential to a midstreamer’s business, Josh Malouf, director of business development at Valerus, tells Midstream Business. Malouf adds that many lean-gas burning engines have been adjusted to meet recent emissions standards, but engines that have the ability to burn rich gas often require secondary equipment to satisfy emission requirements. It becomes an issue of preference, he says.

“We try to help guide our customers through the broader scope of the decision-making process,” Malouf says. “We, too, have seen a dramatic shift with regard to what the product specification is; particularly with regard to electric-drive compression versus gas-driven compression, which comes with no emissions at all.”

Depending on the area of operation, midstream companies are often subject to stringent emission standards known as the National Emissions Standards for Hazardous Air Pollutants (NESHAP), which were put into place by the Environmental Protection Agency (EPA). Since many compressor stations are powered using gasfueled prime movers, they are subject to the same regulations as the gas pipeline companies and are required to control the emissions of what the EPA deems as “hazardous air pollutants.” These tougher emissions policies are driving midstream companies to seek out emissionlowering solutions.

Stricter NESHAP Subpart ZZZZ—or “quad Z”—regulations take effect in October and will tighten air emissions from reciprocating engines used to power compressors.

“It has become a clear dynamic. Customers are first looking at what they need and then focusing on how the permitting regulations will impact the business,” Valerus’ Desai says. “At Valerus, through our in-house environmental experts, we conduct an internal environmental review and provide our customers with a select number of solutions with regards to permitting.”

Shift in power

As the midstream attempts to lower emissions through a switch to electrical or dual-driven compression, Coker notes a few hurdles.

“The long lead time for electric motors is a big issue at the moment,” he tells Midstream Business. “It takes a tremendous amount of electricity and, the electrical infrastructure is not in place to provide the electricity they need in these locations.”

Long lead times are due in large part to the great deal of time and investment needed for the placement of power lines but, according to Valerus’ Malouf, preparation for these issues can aid many in the midstream industry.

“Many of our customers are not used to planning around a timeline associated with a public utility,” he says. “It is a thought-process shift with regard to planning and development of the projects. But there are always means to accomplishing the end goal.”

Crystal ball

Despite its share of challenges, the compression industry is in a constant state of growth. As shale play activity ramps up in the rich-gas areas of the nation, the need for compression will soon follow but when asked to peer into the compression crystal ball, Malouf tells Midstream Business that the future of the business remains a bit “cloudy” for him.

“I see one of two major reactions to the current market parameters,” he says. “The primary driving force is liquids production. To me, that implies continued growth in a smaller horsepower class, more assets being utilized through services instead of through purchase, fewer central large facilities due to emissions regulations and ultimately, fewer smaller players and instead larger players in the business.”

Malouf ’s Valerus colleague Desai’s crystal ball appears clearer especially when it comes to future market developments. “There are a lot of big macro changes that will take time to come through over the next two to three years, centering on exports and additional uses for natural gas that give us a very favorable long-term view,” he says.

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