American Oil and Gas Reporter - May 2016 - 63

SpecialReport: Compression & Production Optimization
Many producers are favoring larger
compressor packages, he observes. "Larger
engines can reduce emissions and provide
long-term operational savings in exchange
for a higher initial cost," he explains.
"To give an example, there is a tremendous
difference between Caterpillar's 3500
family of engines and its larger-horsepower
3600 family."
Concern about emissions has made
vapor recovery units far more common
today than they were even five years ago,
Lawlor comments. "With environmental
regulations tightening, particularly in the
eastern half of the United States, I have
seen many producers switch to zeroemission facility designs that never flare
or combust gas under normal operations.
"The fall in natural gas prices has decreased cash flow and encouraged operators to rely on contract compression
companies rather than purchasing and
operating compression themselves,"
Lawlor reports. "Compression companies'
capital structures give them a strong incentive to maximize utilization rates, so
they are renting equipment at thinner
margins."
Lawlor recommends working with
compression companies on a field-byfield basis, rather than buying compressors
on an individual basis. "If the operating
company knows how long the compression
is going to be in the field and how the
field's conditions may change over time,
both parties can look at the situation and
come up with a solution that makes longterm economic sense for both of them,"
he says.
"With everyone trying to minimize
maintenance costs, there are tremendous
opportunities for companies to develop
remote monitoring tools that can analyze
compressors to determine when to perform
maintenance," he adds. "Proper preventive
maintenance can reduce life-cycle maintenance costs for a compressor as much
as 15-20 percent."
Compression Trends
Brad Childers, president and chief executive officer of Archrock Inc., expresses
confidence that the contract compression
industry will continue to find ways to
operate more efficiently. "All the contract
compression providers are getting better,"
he says. "The improvements we are making industrywide are good for our businesses, good for our customers, and good
for oil and gas production as a whole."
Compression companies have had to

adjust to changing demands. "For example,
the continuing move away from pure dry
gas plays and into liquids plays with associated gas has put pressure on the industry to deploy newer equipment designed
for a wet gas environment," Childers observes. "At the same time, stricter emissions standards have created a marketplace
preference for ultralean-burn engines,
and have forced companies to keep more
detailed maintenance records."
In the short term, Childers says commodity prices have forced producers to
shift their focus from managing growth
to controlling cost. "Our customers are
working hard to make the economics
work for all their production," he says.
"That has transferred pressure to us and
to everyone involved to reduce costs
while maintaining service levels."
To accomplish that, he says Archrock
is working closely with oil and gas operators to better understand and meet their
business needs. "At the same time, we
are helping our customers optimize and
right-size equipment to minimize their
compression costs," Childers reports,
adding contract compression companies
are managing their costs aggressively.
"To pass savings on to the customer,
we are driving as much cost out of the
system as we can," he emphasizes. "For
Archrock, that has meant right-sizing our
business, asking vendors to reduce their
costs, and keeping our capital investments
at a level that reflects today's demand."
Uptime is vital to both reducing compression costs and optimizing the economic performance of producing assets,

so Childers says Archrock is looking for
ways to extend run times and eliminate
unscheduled downtime.
"For example, we have given our service technicians, supervisors and operations
managers a more automated maintenance
management tool designed to help perform
optimally timed preventive maintenance,"
he relates. "The real-time communication,
automation and dispatching capabilities
the tool provides have led to tremendous
efficiency improvements."
The company also has consolidated
its dispatch capabilities into two service
centers, Childers continues. "Because
each dispatch center has access to a large
pool of talent, it often can send a nearby
technician to the problem site, reducing
our response time and transit costs. In
addition, the centers' broad scope allows
us to ensure our customers' production is
being handled as efficiently as possible."
Preventive maintenance and welltrained technicians are vital to keeping
compressors on line, but Childers cautions
they are not enough. "Compressors can
go down if gas volumes vary too much
or if the gas becomes too wet," he says.
"With that in mind, we must work closely
with our customers to identify and address
production issues that might otherwise
cause downtime."
Remote Monitoring
According to Axip Energy Services
CEO Peter R. Lane, producers have higher
and higher expectations for contract compression. "They, appropriately, are demanding improved safety and service,"

Well-trained technicians and strong preventive maintenance programs help contract
compression companies such as Archrock Inc. deliver impressive uptimes.

MAY 2016 63
American Oil and Gas Reporter - May 2016

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