Velvet Named Energy Excellence Awards Champion For Eliminating Freshwater Usage In Gold Creek Fracking Operations

The second annual Energy Excellence Awards (EEAs) program, presented by the Daily Oil Bulletin, uniquely recognizes energy excellence and focuses on the advancement of collaboration within Canada’s energy industry.

For 2020, the DOB received close to 90 nominations in four broad awards categories — Project Execution Excellence; Environmental Excellence; Innovation & Technology Excellence; and Exporting Excellence — recognizing work completed last year. The nominees were further broken down into 12 subcategories across the four groupings, before being judged by a committee of industry leaders.

In the following days we will present the champions in each subcategory. Today, we feature the champion in Project Execution Excellence in the subcategory of Oil & Gas.

The Champions stories are compiled here, and access all the Finalists stories here.


Champion Announcement Podcast: Listen to our podcast announcing the champion of this category and a panel discussion on what makes these organizations stand out in relation to project and environmental performance, collaboration, unique technologies and corporate social responsibility.

Joining DOB editor Richard Macedo in discussion is Mark Brown, Vice President and General Manager of Fluor Canada, which is the Gold Sponsor of the Energy Excellence Awards, as well as Caralyn Bennett, Executive Vice President and Chief Strategy Officer, GLJ Consultants.

Click here to listen.


About seven million cubic metres of non-saline water, 93 per cent of which was sourced from surface water and fresh groundwater, was used to hydraulically fracture wells in Alberta in 2016, according to the Canadian Association of Petroleum Producers. Another 3.3 million cubic metres were consumed in B.C. in 2018, it reported, with hydraulic fracturing the largest use of water for oil and gas activities.

Velvet Energy Ltd. saw in 2017 that there had to be a better way to source massive volumes of water for its own operations. That was the year the Calgary-based producer initiated its Gold Creek Produced Water Recycling Program with the goal to develop processes and infrastructure to eliminate freshwater usage in hydraulic fracturing operations in its Gold Creek asset near Grande Prairie, Alta.

Velvet achieved its full replacement objective last November with the completion of four hydraulic fractured Montney wells with 100 per cent recycled produced water, an achievement recognized for top marks in the Energy Excellence Awards for project execution in oil and gas.

“Velvet Energy is committed to the sustainable and responsible development of our assets. Our approach focuses on organic-growth that minimizes our environmental impact on land, air and water,” said Scott James, vice-president of capital execution, who has been one of the main drivers behind the project.

“Since 2017, our water initiatives in Gold Creek have allowed us to reduce our reliance on freshwater from Alberta’s rivers and lakes. In doing so, Velvet has reduced our air emissions and land transportation impacts while realizing significant operational cost savings. As Albertans, we are proud of the positive environmental outcomes of our water recycling project and have demonstrated its scalability and viability for future operations,” James told the DOB.

In addition to full replacement of freshwater use in fracking operations by 2019, Velvet targeted a 90 per cent reduction in water hauling and a reduction in aggregated water management costs to less than $12 per cubic metre.

The project achieved all operational performance objectives on schedule, progressively reducing operational water management costs for both hydraulic fracturing operations and disposal, while gradually reducing Velvet’s reliance on freshwater.

The achieved reduction of water hauling, by eliminating some 73,800 truckloads of water in 2019, has reduced the surface impact of its operations on Alberta roads, reduced greenhouse gas emissions, and allowed for the development of a safer and more environmentally sustainable water operation.

Produced water recycling levels for 2019 in Gold Creek reached 63 per cent freshwater replacement, for 216,077 cubic metres of freshwater saved — equivalent to 86 Olympic-size swimming pools. At 100 per cent freshwater replacement in November and December, 58,982 cubic metres of freshwater were saved.

“Velvet Energy completed the largest by volume and rate on-demand produced water treatment for well completion purposes in Alberta to date,” the company said.

Velvet completed a benchmarking exercise of company-to-company (across all assets) comparison in reuse volumes using data released by the Alberta Energy Regulator. The comparison across industry puts the medium sized producer in second place in Alberta for freshwater replacement (produced water use) across companies with annual water usages above 100,000 cubic metres.

“It shows the impact of the project in Gold Creek across the entire company’s operation, effectively driving up our corporate reuse percentage to 53 per cent [from below 15 per cent the prior year]. When looking at Gold Creek, which is covered under the project, Velvet Energy has the largest water reuse operation in the Alberta Montney,” said the company.

Meeting its targets would involve a number of actions, including:

Design and construction of 73.6 kilometres of bi-directional pipelines for the distribution of produced water across the asset, at an estimated cost of $33 million;

Design and implementation of water separation processes, primary treatment and pumping infrastructure at three oilfield batteries to allow for on-demand water access across the asset, with a capital investment of approximately $12 million;

Drilling and completion of nine disposal wells, at an approximate investment of $22 million, to effectively dispose of excess produced water while reducing operational costs and GHG emissions associated with waste transportation;

Design and deployment of temporary freshwater storage infrastructure, with a capital investment of approximately $3 million, and a groundwater well to reduce operational costs and the environmental impact of transitional freshwater operations;

Implementation of first-to-market water remote data systems and customized water management database with regulatory compliance; and,

Implementation of produced water chemistry monitoring and chemical modelling programs to prevent and mitigate incompatibilities derived from the mixing of multiple water sources in both hydraulic fracturing and disposal operations.

Velvet partnered with Random Acronym in the first implementation of WaterTracker and FieldTracker for upstream oil and gas. WaterTracker is a cloud-based, Alberta-specific water database, intended for the aggregation, analysis and reporting of industrial water inventories.

The database allows for the mapping of water inventories and infrastructure, identification of operational water opportunities, automatic tracking of water movements, diversion and usage, streamlined water usage reporting system compliance and generation of on-demand water management statistics.

FieldTracker is a portable remote hardware implementation that allows for the monitoring of water telemetry (volumes, flowrates, levels, pressure and temperature) intended to provide reliable and up-to-date water data during hydraulic fracturing operations. It is self-powered, satellite and cellphone compatible, remotely configurable and intrinsically integrated with the WaterTracker database.

The project also contributed to the growth of produced water treatment and handling service offerings in Alberta. The remote water data technology pilots, chemical injection supply chain optimization and general development of infrastructure added over 40,000 person-hours and intellectual property to innovative Alberta companies, said Velvet Energy.


The Champion Series is brought to you by Fluor Canada, our Gold Sponsor, and Spartan Controls, our Silver Sponsor.

Fluor Canada: Since 1949, Fluor Canada has been involved in the engineering, procurement and construction of a wide range of energy related projects that are spread across the Canadian landscape. Fluor provides local, regional and international clients with full-service capabilities, which include economic evaluations, conceptual engineering, feasibility studies, program management, detailed engineering, procurement, transportation and logistics, modularization, fabrication, direct-hire construction, construction management, commissioning, start-up, operations and maintenance.

Spartan Controls: Spartan Controls was founded in 1963 and is an employee-owned company with people and infrastructure in 14 towns and cities across Western Canada. Spartan Controls provides a very broad range of industrial automation products & solutions to all the process industries.