As shale production expands, pipe producers are coming up with new products

BY ERIC LIDJI FOR GREENING OF OIL

Steel-based technologies helped start the shale gas revolution in the United States, and shale gas producers are returning the favor by demanding new and better steel products.

The past three years have seen a huge increase in unconventional gas drilling in the United States, particularly in the large shale plays from Texas to New York. Unlike traditional gas plays where drillers could use relatively simple vertical wells, shale plays require complex horizontal wells that snake through tight rock formations underground.

These horizontal and directional wells accounted for no more than half of the drilling rigs in operation just three years ago, but by various estimates now account for 70 percent or more, as new products have brought down the cost of drilling these more complicated wells.

The tables are now turning, though, as seen by presentations at the Steel Business Briefing Shale Play Tubulars Conference in Pittsburgh in June, where natural gas producers met with pipe and tube companies to talk about the future of shale plays. 

“It’s not one product fits all”

Unlike vertical wells, which simply go straight down into the earth, horizontal and direction wells create new technical challenges, like increased torque and compression as well as changes in direction as drillers snake wells through flat shale deposits.

“We’re actually pushing this pipe down, rotating it, turning it and we’re really pushing this material to its limits,” said John Shoaff, president of Tulsa-based Sooner Pipe.

When most people think of pipes in regards drilling, they think of the pipelines that carry oil or gas from well sites to power plants and city distribution grids. Pipes play another role in drilling, though. Long tubes fed into wells provide a way for the oil or gas to come to the surface.

These are known in the industry as Oil Country Tubular Goods, or OCTG.

Pipelines differ somewhat depending on the landscape they’ll be traveling through. For instance, the trans-Alaska oil pipeline is mostly above ground to keep the warm oil moving through the line from thawing the permafrost that covers northern Alaska.

OCTG, though, must be specifically calibrated for regional geology, according to Vicki Avril, president and CEO of the pipe and tube company TMK-IPSCO. “Drillers need different products for different wells. It’s not one product fits all,” she said.

The five big shale plays in the United States each have unique characteristics. The Haynesville Shale on the Texas-Louisiana border is the deepest of the five and as a result has the highest pressure. The Fayetteville Shale in Arkansas is shallower, but the thickness of the shale varies significantly across the play. The Marcellus Shale in the northeast also varies in thickness, but covers a much larger area than the Fayetteville.

These factors place different demands on OCTG. Deeper wells, higher pressures and thinner shales require thicker tubes and stronger connections. Avril showed a variety of threading options to keep joined lengths of pipe from bursting apart under extreme conditions. The diagrams resembled very complex zigzags to keep pipes locked together.

The demands placed on OCTG also drive the technology, according to Doug Matthews, president of U.S. Steel Tubular Products. Matthews pointed to several factors that guide product development, including longer lateral sections of pipe, extreme torque, high pressures during the fracturing process and multiple fractures on the same well. Pipe and tube companies are responding to an industry that remains fairly new in the United States.

“It is still developing,” Matthews said.

Shale news in brief

The New York Times profiles one of the largest natural gas users in the country, Dow Chemical. Efficiencies over the past decade helped the company lower its natural gas consumption by 1.7 quadrillion British Thermal Units, as much energy as all residential buildings in California use in one year, but the company is still worried about supplies.

“Untrained personnel and the failure to use proper well control procedures” caused a June 3 blowout at a Marcellus Shale gas well in Clearfield County, Pa., according to a report released by the Pennsylvania Department of Environmental Protection.

A series of public hearings on hydraulic fracturing hosted by the U.S. Environmental Protection Agency kicked off in Fort Worth, bringing out supporters and opponents.

The Pittsburgh City Council held its first informational hearing on the Marcellus Shale to prepare for the possibility of natural gas drilling within the city limits. (Check back with the Shale Report next week for an in depth look at urban shale gas drilling.)

Dallas-based Exco Resources Inc. is looking into adding more casings to wells it drills in the Haynesville Shale as a way to better protect underground water sources.

Contact Eric Lidji at ericlidji@mac.com

Eric Lidji has written freelance articles for Steel Business Briefing, the company that hosted the Shale Play Tubulars Conference.