8 | TOROMONT <strong>2009</strong> ANNUAL REPORT A southwestern success story just beyond little Rock, Arkansas is an unassuming stretch of rural land that is quickly becoming an important part of the energy production landscape in the United States thanks to the pioneering efforts of one integrated company. A typical compression station in Southwestern Energy’s Fayetteville Shale play.
The land in question encompasses the Fayetteville Shale play and the company is Southwestern Energy, the first to successfully produce unconventional natural gas from this large reservoir located on the Arkansas side of the Arkoma Basin. Today, Southwestern is the largest gas producer in the Fayetteville Shale. Over the past two years, <strong>Toromont</strong> Energy Systems Inc. (TESI) has played an active role in this success story by providing dozens of highly specified natural gas compression packages used by Southwestern’s natural gas gathering subsidiary. The history of this relationship began with a cold call. Impressed with Southwestern’s progress in Arkansas, Mark Phillips, Account Manager at TESI’s Houston operations saw opportunity and in March of 2008, an introductory call was made to the customer. The timing was good. Southwestern was in the market for compression systems and not long after the initial call and exploratory meetings, TESI was given a request for proposal. Not content to go on the information found in the request alone, TESI made a field trip to Fayetteville to better understand the customer’s requirements. Southwestern also visited TESI’s operations to assess everything from the “quality of our facility and equipment to the quality of our people,” said Marc Rossiter, Sales Manager TESI. “This was an extensive assessment, conducted in a very disciplined manner by a company that knows what it’s doing.” Although TESI faced strong competition, it was awarded a contract to build a significant portion of Southwestern’s business based on a host of considerations that included TESI’s ability to meet three unique requirements: low noise, low emissions and stability. Since many of Southwestern’s natural gas gathering stations on the Fayetteville Shale operate close to other land owners, they insisted on procuring low noise compression packages. Reducing emissions was also important due to environmental policies. In addition, to enable Southwestern to nimbly respond to the changing output of its wells over time, they wanted the compression packages to be able to sit on a temporary foundation of compacted gravel and to operate in this state without loss of performance or structural integrity. Typically, compression packages of this size are bolted to an engineered concrete foundation for stability. To meet the first requirement, TESI designed its packages with low noise fans. The second spec was met with the addition of special oxidization catalysts (which work like an automobile’s catalytic converter). These were designed as part of a base-mounted silencer system. This system is housed outside the gathering station to make it easy for Southwestern’s operators to change the catalysts. The third need was met through a redesign of the compression skid to make it even heavier and more stable. The end product was both sizeable and powerful, featuring 1,775 horsepower CAT ® 3606 gas engines running Ariel JGD/4 compressors. Each unit is capable of compressing about seven million standard cubic feet of gas per day. With the design complete, each package was then made to identical specifications at TESI’s Houston fabrication operation. Identical design not only improved TESI’s manufacturing efficiency, it improved the efficiency and speed of maintenance performed by Southwestern’s operators on site. Once built, the skids were delivered to the Fayetteville Shale where TESI’s service division assembled and commissioned each package. “This project was a TESI team effort all the way,” said Jerry Fraelic, President, U.S. Operations TESI. “It shows what can be accomplished with ingenuity, attention to detail, hard work and a very knowledgeable customer.” While compression rental is prevalent in the U.S. market, Southwestern chose to own these packages due to its integrated business model of engaging in oil and “ Our relationship with Southwestern Energy began with a phone call and was solidified when we demonstrated we could meet three unique requirements.” Marc Rossiter, Sales Manager <strong>Toromont</strong> Energy Systems Inc., Houston TOROMONT <strong>2009</strong> ANNUAL REPORT | 9 gas exploration and production, natural gas gathering and marketing – as well as a financial assessment of rental versus ownership. TESI’s contribution to Southwestern’s infrastructure has been focused on gas gathering and the compression technology that underpins it – a critical part of the process. Compression comes into play after the fluids from the well (water, hydrocarbons, etc.) have been separated. “The equipment <strong>Toromont</strong> is providing to Southwestern Energy is critical in their overall business of marketing clean-burning natural gas to consumers throughout North America,” says Mr. Rossiter. “Using our compression systems, we pressurize the natural gas to 1,000 psi – which is the standard for most pipelines. Anything less means the gas doesn’t move from the gathering station into the pipeline and that means no sale.” Southwestern expects to produce and move natural gas from the Fayetteville Shale formation to waiting markets for years to come. TESI’s specified packages are built for this exciting journey. TIH
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