CanGas Solutions Inc. along with SaskEnergy, unveiled the first commercial high-capacity compressed natural gas (CNG) truck-transport supply station in Saskatchewan on June 17. The CNG station was developed by SaskEnergy as part of a three-year natural gas delivery agreement signed by Bayhurst Energy Services Corporation, a subsidiary of SaskEnergy, and CanGas Solutions Inc., a wholly owned subsidiary of CanElson Drilling Inc., an oil and gas drilling company based in Calgary, Alberta.
The card-lock loading station, located at SaskEnergy's Weyburn Town Border Station, is the first commercial CNG loading station in Saskatchewan designed to quickly and efficiently load trailer-sized CNG containers for truck-haul delivery.
"Innovative facilities like this CNG loading station provide resource development companies with a cost-effective fuel choice that also benefits the environment - supporting continued economic growth done in a responsible manner," said the Honourable Dustin Duncan, MLA for Weyburn-Big Muddy, on behalf of the Honourable Tim McMillan, Minister Responsible for SaskEnergy. "I applaud the leadership of CanElson and SaskEnergy, as their investment in this project reflects the growing interest across North America in new uses for natural gas as a fuel for drilling rigs."
CanGas has established an extensive fleet of Saskatchewan-based truck-hauled CNG delivery trailers and CanElson is in the process of converting the primary diesel engines on additional drill rigs in Saskatchewan to bi-fuel capability so that the engines can operate on a mixture of natural gas and diesel fuel. CanElson is the first drilling company in the region to make the switch to natural gas fueling and CanGas has become the first commercial supplier in Saskatchewan of trucked CNG for diesel engines on oil and gas drilling rigs.
"Building off of our experience working with CanElson, we intend to expand to other rigs and opportunities throughout the energy production chain," said Rob Logan, President and CEO of CanGas. "Weyburn's state of the art CNG station now provides CanGas with the platform to grow our natural gas transport business."
CanGas is the initial and anchor customer for the Weyburn station, and is delivering the natural gas to oil and drilling companies in the Bakken Oil development region. Of the approximately 100 drilling rigs operating in Saskatchewan at a given time, over 40 per cent are located in this area. Those companies now have the option to use natural gas, a cleaner burning, more cost efficient fuel sources than the diesel currently used as the primary fuel for oil and gas drilling rigs.
The three-year agreement with CanGas is projected to generate over $2 million in revenue for SaskEnergy. The permanent CNG loading facility will not impact SaskEnergy's ability to provide natural gas services to its residential, business or industrial customers in the Weyburn area. CanGas will use a portion of the Weyburn CNG facility's capacity, allowing SaskEnergy to pursue other customers in this region.
With significant cost savings presently between natural gas and diesel fuel, CanElson has plans to negotiate more CNG supply agreements in other Canadian locations, as well as Texas and North Dakota, where CanElson operates drilling rigs. With the transition from a temporary compressor station to the permanent SaskEnergy facility, CanGas will be offering CNG delivery and related support services to other contract drillers in the area, as well as other types of applications, such as: diesel engines used to generate electric power; drill rig boilers; and fracturing equipment at drilling sites.
