Denbury creating long-term future with regional pipeline

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Denbury celebrated the activation of its Cedar Creek Anticline pipeline recently in the Red River Conference Room inside the Baker facility on Shell Oil Road, even though it had started two months earlier.

The CCA pipeline is designed to be able to move barrels of oil, but now it may able help produce another 400 million barrels in the future.

The president and CEO of the Texas-based company, Chris Kendall, was one of the speakers at a meeting which was designed to celebrate the process of enhanced oil recovery. The other was Montana Senator Steve Daines.

Kendall told the people at the meeting that the pipeline will be able to transfer up to 2 million tons of carbon dioxide each year, which will do a lot to extend the financial impact of the company in eastern Montana for years to come.

Although the process started in February, the plan was to wait until the end of winter in the region before holding the actual celebration and a symbolic turning of a valve wheel.

The 105-mile pipeline is designed to send carbon dioxide from parts of Wyoming to fields in parts of Montana and southwest North Dakota. With the enhanced oil recovery plan, carbon dioxide is injected into the ground where it helps remove oil from geological formations. The carbon dioxide is later separated from the oil, then reinjected underground.

The CEO also explained that the carbon dioxide would then be stored permanently underground.

Kendall opened his comments by thanking the people who work with the company, the contractors Denbury uses and the landowners.

"This is a special day. I am glad it wasn't last week," he said with a chuckle as he referred to the blizzard which had closed many of the roads in the region. "We have the remnants of the snow."

"Many of you have been talking about bringing CO 2 to the anticline for a decade or more. To be sitting here together and have that pipeline in place and have it done successfully is just a wonderful place to be."

"The project, in a broad sense, over its lifespan, Denbury is going to spend over $500 million on this project. The pipeline itself was a big investment for us – about $150 million. But, everything else that is going to happen with it over time ..... we are going to spend a lot of money."

Kendall said the people in attendance who built the pipeline did an incredible job of getting the project done ahead of time and under budget.

"In a world that has been very tough with supply chains and just getting anything done. Infrastructure is a huge challenge no matter if it is oil and gas or carbon dioxide. Our team did just a superior job."

Safety

Safety was also a big factor with the success of the project so far, the CEO explained. "This is a project that we expended over 500,000 man-hours – it peaked when we had more than 600 people onsite along the route of the pipeline – this whole project went without a single recordable incident. Nobody got hurt doing this project."

"When you think about the exposure to the elements and you think about the lifting of pipe sections, grinding and welding... to do all that without a single incident is just extraordinary," Kendall said.

Carbon Dioxide

With the completion and activation of the pipeline, the company will have the largest CO 2 pipeline in the world, Kendall told the people. "Not in the United States. Not in the Rocky Mountain region. In the world."

"We have about 1,330 miles or so of CO 2 transmission pipelines. This little company has more of those than anyone. I am proud of that. I expect as we move forward, we are going to see us expand that even more," the company president said.

He also noted that the company is sending carbon dioxide to fields in Montana, but also to fields in North Dakota. "We can take this footprint of the Cedar Creek Anticline, a field which has been producing for decades and has produced upwards of 700 or 800 million barrels of oil – we can give it an entirely new life. We are just getting started with that. We have decades in front of us what is in this field using the exact same footprint that has already been made in this area."

"It will give a life well into the back half of this century, producing oil. It is not just oil we are producing, but a special kind of oil."

"Because we use so much carbon dioxide to get that oil out of the rock, that carbon dioxide stays permanently in the rock. We are not releasing carbon dioxide in this operation."

"More CO 2 is used to extract the oil, than will ever be emitted by the oil itself that we are producing. This truly is a net-negative carbon footprint," Kendall added. "In a sense, we are pre-depositing the carbon emissions for the oil that will be produced."