Saskenergy, Cangas sign deal to fuel rigs

When Randy Hawkings flew into Regina, one of the things he got from a colleague was a quick lesson on innovation — like how a group of farmers, fed up with the high cost of gas, pooled their money 77 years ago and started the world’s first co-operative oil refinery.

The firm Hawkings heads, CanElson Drilling, could be making commercial history with business partner SaskEnergy.

The two firms signed a three-year deal on Wednesday that will see SaskEnergy supply natural gas to CanElson’s subsidiary, CanGas Solutions, for use in the diesel engines on CanElson’s drilling rigs.

Diesel fuel and diesel engines won’t become extinct on the 14 rigs that CanElson operates in the province’s southeast. Instead, the engines will be converted to use a mix of natural gas and diesel in their daily operations.

It makes sense from several angles. With the cost of natural gas relatively low, that will mean hefty financial savings — and fewer emissions from the engines, too, because natural gas burns more cleanly than diesel.

Precisely how much cleaner is impossible to say because the rigs’ engines will use constantly changing mixes of the two fuels, depending on their power needs.

But Hawkings said tests indicate about half of the diesel fuel now used on the rigs could be displaced by far cheaper gas.

He’s confident enough that CanGas Solutions will be acquiring trucks and hiring personnel to drive them and fuel the rigs, as well as adjusting their existing diesel power plants to use the new mix of fuels. “A pretty bold

A pretty bold move when you look at the big picture.

RANDY HAWKINGS, CANELSON DRILLING

move when you look at the big picture of things,” Hawkings said.

And if things go well, other drilling companies could adopt the “new” fuel, too. That will mean income for CanGas and one more use for the natural gas that SaskEnergy ships through its provincewide pipeline system.

For its part of this project, SaskEnergy will build a $2-million fuelling station — “essentially a gas station,” said SaskEnergy President Doug Kelln — at Weyburn, near the heart of southeast Saskatchewan’s oil exploration and production play.

When fully utilized, the amount of natural gas moving through this station in a year will be equal to natural gas usage by all residential customers in Weyburn, he said. It will be able to fill one of CanGas’s semi-trailer tankers in about one hour.

It’s one of several innovations being pursued by the Crown corporation, which captures flare gas from oil wells and taps methane from landfills.