November 5, 2019 / 7:27 PM / 11 days ago

Shale CEO calls out industry for Permian Basin gas flaring

Nov 5 (Reuters) - Pioneer Natural Resources Chief Executive Scott Sheffield on Tuesday called on producers in the top U.S. shale field to limit natural gas flaring and monitor for methane leaks.

Companies are targeting oil in the fast-growing field, but pipeline construction has lagged, leaving natural gas as a byproduct to be burned or vented.

Producers should get flaring and venting rates to 2% or less and not drill wells before pipelines are complete, Sheffield said during a call with analysts.

“We do not connect any new horizontal wells to production unless the gas line is already in place,” Sheffield said. “I think that’s something that should be adopted by all producers in the Permian Basin.”

Pioneer’s flaring rate is around 1%, the second-lowest in the basin behind Chevron Corp, according to an investor presentation with Rystad Energy data. The average for its peer group was a 5% flaring rate.

Gas flaring and venting in the Permian Basin in Texas and New Mexico reached a new high of 750 million cubic feet per day in the third quarter, according to estimates released on Tuesday by Rystad Energy.

During the previous nine months, flaring and venting averaged 600 million to 650 million cubic feet per day, Rystad said.

The upswing is being driven by more drilling and fracking, pipeline bottlenecks and new production in areas that lack gathering lines and processing plants.

The Texas portion of the Permian’s Delaware Basin accounted for 40% of the field’s flaring and venting, Rystad said.

Reporting by Jennifer Hiller in Houston Editing by Marguerita Choy

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