Calima Energy Ltd (ASX:CE1) has signed up for a sustainable, long-term means of transporting oilfield fluids at its Brooks play in Canada, partnering with Pivotal Energy Partners Inc, a strategic infrastructure and midstream company, to finance and construct a key pipeline.
The pipeline will connect the company’s 02-29 oil battery in the north of the field to the recently drilled wells, Gemini #5-#7 and Pisces #3, in the southern part of the field.
It will also provide egress for planned production growth along the pipeline corridor in the heart of the Brooks holding – for example, at multiple future drilling locations in the Sunburst and Glauconitic formations.
This new infrastructure will improve full-cycle economics for the development of these future locations.
The pipeline will be completed by late March, and will connect the recently drilled Gemini #5-#7 and Pisces #3 to the 2-29 oil battery.
Taking the long view
The company is taking the long view with the pipeline, ensuring there is long-term capacity for planned growth in oil and gas volumes from its core Brooks acreage, which will translate into enhanced operating economics.
“The pipeline is a key piece of infrastructure that the team has been working towards for the past number of months, including design, securing of all right of way approvals, and negotiating the related financing partnership,” CEO and president Jordan Kevol said.
“The pipeline provides significant benefits, including the ability to tie in recently drilled and upcoming wells, and reduces emulsion trucking for some existing wells, providing immediate operating costs reductions.
“We are pleased with the environmental and safety benefits related to getting more trucks off the road, and previously trucked fluid into a pipeline, which has been proven to be the safest, most environmentally friendly method of transporting our product."
Economic and ESG Benefits
Once the pipeline is in place, reduced trucking costs in the vicinity of C$55,000 along with other operating costs savings are expected to offset and exceed loan repayments on the pipeline. Accordingly, the company expects to free up cash flow in the near term in order to expand its operations.
The pipeline will provide ESG benefits, including eliminating the need to flare new wells during testing, in the range of 400-800 tCO2e for each new well tied into the pipeline. The pipeline will also reduce trucked volumes of emulsion from existing, newly drilled, and future wells connected by the pipeline to the 02-29 battery.
Reduced trucking improves the company’s safety and spill prevention profile and ESG score. Pipelines are safer, more environmentally friendly, and more economic, when compared to the trucking of oilfield fluids.
“This pipeline is capable of handling the capacity of our growth plans in the area for the next three to five years,” Kevol said.