A Texas company will soon clear another step in its mission to flood the Rocky Mountain oil market with carbon dioxide, a gas used to push hard-to-get oil to the surface.
Denbury Resources, a Plano-based company, expects to open its $400 million Riley Ridge gas plant sometime this summer. The plant — built to separate and provide gases for sale from the nearby La Barge natural gas field — will provide about 15 jobs at first.
Company officials are excited about the plant starting production.
“We’re going to be in Wyoming for a long period of time,” company spokesman Jack Collins said.
While Riley Ridge is among the company’s first Wyoming properties, it’s Denbury’s long-term plans that could make waves in the Wyoming oil and gas industry.
At first, Riley Ridge — which was previously owned by Cimarex — will contribute little to Wyoming, Montana and North Dakota oil fields. Early plans for the plant call for the company to separate and sell only natural gas and helium at the plant. Carbon dioxide, a gas used to flood oil fields and free trapped resources, will be stored underground.
Despite the gas’ popularity as an oil extraction medium, there’s simply no way for Denbury to get it where it’s needed. Little pipeline infrastructure exists to transport it across Wyoming, but Denbury is among the companies looking to solve that problem.
The company in March filled the $300 million Greencore pipeline, which carries CO2 from the ConocoPhillips Lost Cabin gas plant near Lysite in central Wyoming to the Bell Creek oil field in southeast Montana. Company officials at a December commissioning ceremony said the section of pipe was the first in a series of phases meant to bring more carbon dioxide to Wyoming.
Now the company’s looking to expand the line. Collins said the company plans to connect Greencore to Riley Ridge, roughly 200 miles as the crow flies. To the northeast, Denbury will also connect the line to the Cedar Creek Anticline, a series of oil fields on the North Dakota-Montana border.
The company will simultaneously build a second plant at Riley Ridge. The facility, geared toward separating carbon dioxide from other gases, will allow Denbury to transport the gas across the state.
Collins said his company has estimated there is 100 trillion cubic feet of carbon dioxide in the La Barge field, enough to revitalize aging oil fields in the West for years.
“We think carbon dioxide recovery provides a unique opportunity to recover oil that we know is there,” he said. “We’re recovering this oil that otherwise wouldn’t be recovered.”
The company has already identified several oil fields, such as the Grieve field west of Casper and the Hartzog Draw field south of Gillette, as candidates for carbon dioxide use. Collins said Denbury has also identified several other Wyoming locations and is working to find other companies thirsty for the gas.
The line could also eventually connect to DKRW Advanced Fuels’ planned coal gasification plant near Medicine Bow. The process needed to convert coal to liquids is likely to generate carbon gas, and the connection would help keep it out of the atmosphere.
Denbury’s plans and recovery methods have drawn positive reviews from industry officials.
“When we get companies interested in using carbon dioxide to help remove that oil, it really extends the life of those oil fields,” said John Robitaille, vice president of the Petroleum Association of Wyoming. “It’s really a great thing that these guys are doing. Hopefully it’s a great success.”
Others in the state agree. Gov. Matt Mead’s office and the Wyoming Pipeline Authority have been working to create corridors — pathways deemed ideal for pipelaying — specifically for carbon dioxide infrastructure.
The authority has yet to apply to designate the corridor areas, but Executive Director Brian Jeffries said he will continue to pursue the initiative.
“We have a great deal of existing oil that could be recovered if we get sufficient carbon dioxide to the fields,” he said. “Finding more carbon dioxide is the critical path, that’s what Denbury is trying to address.”
Robitaille added that Denbury is unlikely to have trouble finding outlets for its product.
“We probably could use a tremendous amount more,” he said. “If we had enough of it, we’d use every drop of it.”
And Denbury’s making a hefty bet that the demand will be there. The second Riley Ridge facility and pipeline extensions will cost between $600 million and $700 million.
The second Riley Ridge plant should be completed by late 2016. The next year, Denbury expects to begin producing oil in the Cedar Creek Anticline using gas transported through the Greencore network.
The infrastructure will eventually rival the company’s Gulf Coast holdings, an extensive system of 800 miles of pipe and 16 carbon-flooded oil fields.
Collins said that the company is confident that its plans will help Wyoming oil.
“We’ve been doing what we’re doing for a long time,” he said. “It’s our primary focus as a company. We’re not a one-off shot in the dark.”