Thursday, August 18- The show is on the roJim & James caught up with Brian Kendrick at the TGA Operations & Management Conference. Brian discusses LNG/ CNG for virtual pipelines, how RNG is being used, and LNG &CNG for NGV operations.
Jim Schauer: [0:23] Welcome everybody to this episode of “Coffee with Jim & James,” a very special episode this week because we are recording live at the TGA. I mean, it’s exciting.
James Cross: [0:33] Someone just walked by and it cracked me up. They, obviously, had no clue what we were doing here.
Jim: [0:38] Oh, no.
James: [0:39] They just gave us a look like…
Jim: [0:40] What are you guys doing?”
James: [0:41] Right? “Y’all in the right place?”
Jim: [0:43] Why are you guys talking to yourselves?” Certainly, we have people taking pictures right here. It’s a bevy.
James: [0:49] We’ll get used to it. Brian, welcome to the show.
Brian Kendrick: [0:52] Thank you, sir.
James: [0:53] It’s a long time coming. He has dodged my emails and texts for years now. I get to say years. We’ve been doing this show for years.
Brian: [1:01] I was waiting for my rider to be approved, but here I am without a contract.
James: [1:06] I don’t want a coffee cup.
Jim: [1:08] You have water. That’s OK.
James: [1:10] Well, everyone’s here.
Jim: [1:11] Accept the water.
James: [1:13] Brian, bring the audience along. Let them know who you’re with. Give them a little quick intro. You know your thing.
Jim: [1:22] Come on, elevator speech.
James: [1:23] You’ve been in a trade show before.
Brian: [1:24] I have a time or two, just a few.
James: [1:26] Do your thing.
Brian: [1:27] I’m with Sapphire Gas Solutions. We had several names previous to that, Thigpen Energy, Thigpen Solutions. The same basic…
James: [1:36] I used that joke with somebody else.
Jim: [1:37] That’s all right. Nobody will get it. It’s all good.
Brian: [1:40] [laughs] No worries. Anyways, here promoting the CGA this week. Our story for the last six years that I’ve been involved, probably three or four years prior to that before I came on board. This idea of virtual pipelines is in support of pipeline operators, any end user that needs natural gas that they’re banned to.
Jim: [2:06] Let’s break this down a little bit.
James: [2:08] This isn’t fair. I’m sitting here with two nerds in this space if I can be honest.
Jim: [2:14] We are.
James: [2:14] I’m over here like just the guy trying to figure it all up.
Jim: [2:18] Like what is a virtual pipeline, right?
James: [2:20] Yeah. I will say this, you and I have been in the industry, Brian, the same amount of time, which is crazy to think about, that we’re here now this long. We’re getting there.
[2:34] But I’ve learned a lot. I’ve asked a lot of questions, and that’s one space that I started honestly, because of you guys, when we all worked together. I was fascinated by it.
[2:47] Can you all break down a little bit, for the people who don’t know, virtual pipeline and some of that? I know it helped me, and I’m sure there’s some people out there that would be a little scared to ask.
Brian: [2:57] Sure.
Jim: [2:58] Please.
James: [2:59] Both geek out on that. I’m trying to go on tangent.
Jim: [3:04] Where do we begin, Brian? Where do you want to begin?
Brian: [3:06] Well, I think it’s worth mentioning that…
James: [3:08] You were born…
Brian: [3:09] I think it’s worth mentioning that you were the one that gave me a chance.
Jim: [3:13] I did?
Brian: [3:14] Yeah, in natural gas.
James: [3:15] Let’s lean in there. What does that mean?
Brian: [3:17] He asked me to interview on a Saturday for brunch, which I was like, “A Saturday?”
James: [3:20] It’s very on brand.
Brian: [3:24] So, yeah, it’s Jim. Jim hired me six years ago. He was CEO of Thigpen Energy at the time. We were an oilfield services company at the time, so bringing in LNG mainly into the oilfield. The Permian, Midland‑Odessa.
Jim: [3:40] Liquefied natural gas.
James: [3:42] Just to keep, what, rigs running?
Brian: [3:45] It was to keep dual‑fuel rigs running. At the time, FRAC rigs, drill rigs, were running off of diesel, mostly, right? Well, diesel prices were sky high. The idea of…
James: [3:58] Just like today.
Brian: [3:59] Yeah, just like today. The idea of emissions and greenhouse gases and ESG kind of was just getting started.
James: [4:07] Just rumbling.
Brian: [4:07] That’s right, just rumbling, so these operators made an initiative to lower costs and reduce emissions at the same time. Technology existed that allowed those rigs to burn a combination, mixture, of diesel part‑time, natural gas part‑time.
Jim: [4:24] That’s the dual, yeah.
Brian: [4:26] But how do you get that from the pipeline into a mobile FRAC fleet? Jim led the efforts to take LNG and tanker trucks, deliver them to site, vaporize that liquid that’s stored at ‑260 °F, vaporize that using a process.
[4:42] It can be heated with glycol or water bath, or other ways to heat that backup and turn it back into a gas, then deliver that to that engine to then continue pumping more oil below the ground.
[4:55] There was cost savings there, a lot cheaper than diesel, even with having to truck in that gas, and helped them also meet some emission goals at the same time.
Jim: [5:02] I think it’s important, let me just take a step back. When we talk about LNG and CNG, a Lot of people associate them with the same thing. LNG, you take about 620 cubic feet of natural gas, cool it to ‑260, ‑265 degrees, and it turns into one cubic foot of LNG. You keep it cold.
James: [5:22] One six‑hundredth.
Brian: [5:25] Exactly right.
Jim: [5:26] Then you keep it cold.
James: [5:27] I learned that. Are you proud of me?
Jim: [5:29] You’re doing good.
James: [5:30] Come on, I think I’m going to make it here.
Jim: [5:34] You know what? You might have a…You want to go see the folks over at Sapphire just to talk about that? But then when you so you get a lot of energy in a very small space and then you re‑vaporize like Brian was saying and it’s really one of those LNG tankers that looks like a semi‑truck, looks almost like a water tanker for lack of a better term.
[5:53] But that could heat actually; it could take care of all the fuel natural gas needs of a house in Minnesota for, I think it’s like eight or nine years. So one tanker could feed a home up there for nine or ten years, something like that.
Brian: [6:07] About 10,000 gallons of LNG.
James: [6:08] Wow.
Jim: [6:11] How’s that for a little…
James: [6:13] That’s great. So explain virtual, so I like the word virtual pipeline. Is that just the coined term around that solution?
Brian: [6:21] I mean, I think Jim was the one I kind of learned the term virtual pipeline from, to be honest with you.
James: [6:25] Look how proud, like a proud papa.
Brian: [6:28] Now, hey, I don’t know if he holds trademark rights or what the deal is there, but…
James: [6:30] Hopefully.
Jim: [6:31] We’ve been using that for a while. We’ve been using it for a long time, but virtual pipeline is just that. It’s like, instead of running a steel pipe in the ground, if somebody just needs a temporary solution…
James: [6:44] On demand.
Jim: [6:45] we bring a tanker in, hook it up, let it run virtually. I mean, not virtually but let it run for five, seven, two weeks. Whatever the case is, pull it out and off to the next one.
Brian: [6:55] You can kind of interchange that with mobile pipeline.
James: [6:57] Yeah, that’s what I was going to say. I’ve heard it that way too.
Jim: [7:00] Yeah, mobile pipeline is probably a little bit more…especially now in the post‑COVID world and talk about virtual everybody thinks about electronics, this is actually physically LNG being tankered in, utilized, and then tankered out.
Brian: [7:12] Anywhere where the infrastructure doesn’t already exist, or maybe it exists, but it’s down. It’s down for service…
James: [7:18] Planned outage.
Brian: [7:19] Or emergency.
James: [7:19] Or emergency. Right.
Jim: [7:20] Digging, testing in the pipes, hydro test.
Brian: [7:24] Hydro test, out of placement.
Jim: [7:26] Yep. Unplanned, somebody doesn’t call 811 and dings a pipe, and all of a sudden, there might be an emergency. Could be a hurricane, all those types of things, especially in the south where there’s not a lot of redundant pipes where they can’t back‑feed another one, a lot of single strands as we call them.
[7:45] Well, we could geek out all day, but I want to geek out about something because the world has changed in the last four years. Again, we were doing it very heavy in the oil fields, but then really focus on municipalities and LDCs, and focused on delivering to that.
[7:59] What type of markets have opened up now in the virtual pipeline world? Are we still doing the same with communities and utilities or is there more right now?
Brian: [8:07] Yeah, still doing the same old, same old, right? With feeding homes, businesses…
Jim: [8:12] Blessed to do it, blessed to do it.
Brian: [8:13] Absolutely.
Jim: [8:15] Thank you for your service.
Brian: [8:18] You’re right, there have been several applications that have popped up just within the last four years. The last thing you mentioned, living on the coast, were prone to hurricanes, right? And outages, specifically with the electric grids.
[8:30] So, one of the new technologies that have popped up in the last few years, that is being really bought into, is deployment of mobile turbine units. These big turbine generators that fit on 18‑wheeler semi‑trailers, capable of basically powering the town of The Woodlands. That’s kind of what they size them for, 30 megawatts or so.
[8:53] Will be deployed in an instant and hooked up to the electric grid that might be down because of an outage at a power station. And those generators are often natural gas. Most commonly natural gas. You can feed those with LNG, liquefied natural gas, or compressed natural gas and they’ll put power back on the grid in those emergency scenarios.
James: [9:14] That’s cool.
Jim: [9:15] It’s kind of like being a part of the green conversation, too, if there’s… I mean, I’m going to go back to the goals conversation. It makes me think it’s part of integrity management of companies are thinking now, part of that downtime is going to be standing it up and part of…it’s built into plans now because it’s so mature at this point. I mean, people are building this into their projects, right?
Brian: [9:44] Absolutely.
Jim: [9:45] If eyes are at peace, a 100 percent.
Brian: [9:48] The way I would look at them is these become insurance policy.
James: [9:51] Yes.
Brian: [9:52] The contingencies are insurance policies, but what we saw with the freeze, here in Texas and all over the US two years ago, made everyone realize the infrastructure we have is vulnerable.
James: [10:02] Sure.
Brian: [10:03] And so, the cost that it takes to maybe reserve that type of service, whether is reservation for a mobile pipeline or reservation for mobile turbine paired with mobile pipeline, those costs are minimal when compared to what can happen when you lose electric service, gas service to big towns and cities. The PR there is horrible.
Jim: [10:25] That’s a very good point, too. When you think about it, when you say lose, that term means that let’s just say for natural gas, natural gas stops flowing for some reason, and homes go without natural gas. They turn on the hot water and it’s cold. You try to cook eggs, there’s no flame.
[10:41] And the average relight. Meaning for a technician to go into that home is around $72. It’s what they figured out. When you really think about it, the cost to have a reservation as a backup plan is a lot less, not just monetarily but also PR‑wise like you said. Good point on that.
James: [10:58] I bet that price is a little bit higher these days too, $72 per.
Jim: [11:03] Yeah.
James: [11:03] Think about inflation. The amount of protocol we have around keeping people safe now. Especially with COVID, the price has to be a lot higher than that.
Jim: [11:13] Yeah, my price goes back a few years, so you’re absolutely right. Could be $90 dollars, be $94, $97, $100. We balance…
James: [11:20] This is like protecting your brand too. I think about you saying customers are not going to be happy about it, whatever it is, man. I like it.
Jim: [11:33] That goes into like winter‑peak shaving, we talked about that. We’ve done a lot of those things in the past and that’s just it, reserving LNG. Have it on hand in case it gets too cold and there’s not enough operating pressure, or whatever the case may be, that could strain a grid.
Brian: [11:51] One thing that I always talk about. As pipeline operators, as utilities, service companies, safe delivery of energy. I’m seeing a change the way that everybody thinks the safe resilient delivery, resiliency system of energy. Not only are people thinking about how to operate their system safely also, “How do I build in the maximum amount of resiliency to account for these types of outages that might occur?”
James: [12:17] I like it because it’s energy. You’re not even saying natural gas, right?
Jim: [12:21] Yeah.
James: [12:21] Because in a lot of instances, like you said, you’re powering electrical grids, you’re powering a lot more than just gas infrastructure, making sure the burner tip has long. It’s a lot more than that. It’s providing energy across the board.
Jim: [12:38] Absolutely. You’re absolutely right, James. See, he’s learning.
Brian: [12:41] He’s picking up.
Jim: [12:42] bring them along. He’s going to be an LNG‑CNG little guru in no time.
James: [12:47] Tell you what, don’t really remember.
Jim: [12:50] Oh, wait. Yeah, that’s what I used to get on the LNG. Remember that?
Brian: [12:54] Everything is operated by Valve. Yeah. That’s OK.
James: [12:57] I’m probably keyboard.
Jim: [12:59] Probably is. Back for my days, Brian.
Brian: [13:01] Yes.
Jim: [13:02] What has been one of your most memorable favorite virtual pipeline projects you’ve done? What stuck out in your mind as something? Maybe unique something, the audience will be like, “Had no idea we could do that”
Brian: [13:16] One recently, this popped up is actually getting into Bitcoin mining.
James: [13:21] Like crypto.
Brian: [13:23] Yes, Cryptocurrencies.
James: [13:25] Crypto‑mining.
Brian: [13:28] Those Bitcoin mining operations that you…
James: [13:30] I’m in.
Jim: [13:30] Are you in?
James: [13:31] I’m listening. You have got my attention.
Brian: [13:33] They require a lot of power. That’s the main driver. You probably know a lot more about Bitcoin than I do.
James: [13:38] I’m not…
Brian: [13:39] I do know they require a ton of power.
James: [13:42] You know how many spam messages I’m getting in my LinkedIn inbox now?
Jim: [13:45] Because of Bitcoin mining?
James: [13:47] Yeah, let’s talk about that later.
Brian: [13:49] They need investment.
James: [13:49] You’re right, they take a lot of power.
Jim: [13:53] How much power are we talking? I view this as a laptop being set up and just hit the button.
James: [13:57] Are you talking the casual, or we’re talking the banks of servers, big warehouse, data center type environment?
Brian: [14:05] They’re scalable.
James: [14:06] A little bit of both. Yeah.
Brian: [14:07] They’re scalable. The ones, I’ve seen there’s banks of anywhere from 12 to 120 mobile generators that might be 300 pounds.
Brian: [14:19] Generators just to power the Google data center.
Jim: [14:23] Give us that number one more time. How many generators?
Brian: [14:26] Between 20 and…
Jim: [14:29] We’re talking like the generators that are the eight‑foot by three‑foot…
Brian: [14:33] That’s right, or larger.
Jim: [14:34] or larger?
James: [14:35] So long. Is this supplemental, or you’re saying essentially they’re running those data centers with…?
James: [14:43] So, a little bit of both?
Brian: [14:44] A little bit of both. What I’ve seen is these data centers. They have to be in inconspicuous areas, for safety and security reasons. For some of the ways that they’re designed. Where is that at? Well, it’s at the middle of nowhere, where infrastructure is…
James: [15:00] On the pipeline.
Brian: [15:01] Exactly, the pipeline, no line power for electricity.
James: [15:04] We could get a phone tap or something. Couldn’t we just tap in for now? I’m just curious.
Brian: [15:07] We studied this, Jim, back in the day. Talking to some of the people here recently, depending on the size of the pipeline obviously, but to construct new taps and new lines, somewhere in the ballpark of $1 million to $2.5 million a mile.
Jim: [15:23] That would be…
Brian: [15:24] Double cost?
Jim: [15:24] Yeah, that was one of my old costs that might be…
James: [15:27] might be out in the middle of nowhere. There is no pipeline close to this.
Brian: [15:33] No.
Jim: [15:33] The issue is, I mean, it’s almost like asphalt plants. A lot of people don’t want to put pipelines into asphalt plants because a lot of those are portable. They move. An operator says, “Well if it’s only going to move, what’s return on investment?” A lot of times services can be a 30‑year payback. It’s interesting. You think about Cryptocurrencies, Bitcoin mining?
James: [15:58] Homegrown operation.
Brian: [16:04] Let’s peek at home. That’s another extreme solution.
Brian: [16:06] Another application there, that is fairly common is marijuana grow operation. When you are growing marijuana, in states where it’s legal, you don’t want to do that in downtown areas or places that can be hit by crime, or people…you want to be very conspicuous as to where you put these facilities.
James: [16:28] Same problem, same energy.
Brian: [16:30] Same problem. Energy, whether it’s electric or gas, or whatever. You might need to keep climate control going, virtual pipeline fits that need.
James: [16:41] Look at my brain right now. Again, because you think about these segments of the…I mean, not our industry, the industries of the world that are behind the scenes being powered by natural gas with total different agendas, I’m just saying. But behind it all, the backbone is natural gas.
Brian: [17:02] Yeah.
James: [17:03] I know they’re not all ran like that, but it is very efficient. It’s safe. All the things we always say.
Jim: [17:10] It’s 91 percent efficient, really running natural gas generation at the site as opposed to running through power lines over 10, 20 miles of…
James: [17:21] That is not what I thought you would say. I thought you were like, “At one time I was up there and it was snow. And there was for 14‑foot of snow on the ground.” He’s like, “Nah. I was supplying natural gas to this blow shop and this firm.”
Jim: [17:35] And in Bitcoin place?
James: [17:37] Wow. No, it’s just crazy. To think that’s behind it.
Brian: [17:40] It is.
Jim: [17:41] Back in the heyday, we did a large project out in the, let’s just call it the West Virginia area, with 1,800 MCF, so that’s 1.8 million standard cubic feet an hour, for 6‑8/8‑10 hours to get a cold plant running up there.
[17:57] Electric generation cold plant because at that time, they were being curtailed in the winter months because if they fire it up, there are homes and businesses in the area that could actually go offline because this plant sucks so much gas. So we did that. Brian was on site there many times.
Brian: [18:13] Yeah, and you know what’s interesting there is because it’s such a critical operation for the power plant to always be putting an hour on the grid. If they ever were down, they would be fined by the JPM. $1‑2 million an hour, if they were not producing when called upon.
Brian: [18:31] So the cost again for that insurance policy, to have a backup to ensure that you had a resiliency plan.
James: [18:36] That ain’t gone be me. Definitely. That’s awesome.
Brian: [18:39] Yeah, exactly, I’ll blow your mind real quick.
Jim: [18:40] Do it.
Brian: [18:40] Because I don’t think I’ve told you about this yet.
Jim: [18:41] Ah well, we’re going to learn something.
Brian: [18:42] That was probably one of the bigger, if not biggest, virtual pipeline projects that we had done up to that point of 2016.
Jim: [18:49] Yeah. Yeah. Yup.
Brian: [18:50] One that we did about three years ago was about five times that size.
Jim: [18:54] Five times! Portably? Virtually? I mean. What were you feeding? A power plant?
Brian: [19:00] Oh, I take that back. I just lied about that.
James: [19:01] Oh he lied! Right here on camera.
Brian: [19:03] I was speaking in terms of days and not hours.
Jim: [19:05] Oh.
James: [19:06] But still!
Brian: [19:06] We did do one that was 10 million standard cubic‑foot a day for about a week.
Jim: [19:10] That’s a huge number!
James: [19:12] Wow! I don’t even know…
Jim: [19:12] High pressure or low pressure?
Brian: [19:14] High pressure.
James: [19:14] That’s a lot.
Brian: [19:16] No! You know! Ah‑ah!
James: [19:16] He lied again.
Brian: [19:17] I lied again.
James: [19:17] On camera twice in a row.
Brian: [19:19] We did 10 million standard cubic‑foot per hour.
Jim: [19:22] Per hour?
Brian: [19:22] Per hour.
Jim: [19:23] Which is huge.
James: [19:24] Unbelievable.
Jim: [19:25] Which is a five‑times…
Brian: [19:27] It was about a load and a quarter of LNG. A load being a transport trailer, 10,000 gallons, every hour for about five days.
James: [19:35] I have to get my calculator.
Jim: [19:36] What type of pressure?
Brian: [19:38] That one was at about 300 psi.
Jim: [19:41] That’s high. That’s difficult because if you can transport LNG at like, 10, 20 psi, that’s great.
Brian: [19:50] Down the road, yeah.
Jim: [19:52] Where compressed natural gas is just that compressed and it’s at 1,800, 2,000, 2,300, whatever it is. LNG you want it low because the pressure builds when the LNG starts to heat. And when it heats that’s when the pressure builds up, so you want it as low as possible. So getting it up to 300… That would have been interesting. I got to take a look at that. See what you guys did with that.
Brian: [20:10] Yeah. For sure.
Jim: [20:10] The compression units.
Brian: [20:12] We were sending gas across the Mexico border to a bottling facility for a favorite beer of yours probably.
James: [20:18] Again!
Jim: [20:19] Really?
James: [20:18] Again.
Brian: [20:19] Yeah. Interesting, just interesting a scenarios like that.
James: [20:23] Natural gas supporting that again.
Brian: [20:22] Yeah.
James: [20:22] Wait, you ran it there, maybe?
Brian: [20:25] We were on the US side.
Jim: [20:27] You were on the US side feeding off…
Brian: [20:24] You could throw a rock and hit the river.
James: [20:27] Maybe.
Brian: [20:31] Wow.
Jim: [20:32] And again, in there for two weeks, whatever it was 10 days, and then out?
Brian: [20:36] Yeah.
Jim: [20:37] That’s fascinating.
Brian: [20:37] Then we roll out.
Brian: [20:39] And as Kelly mentioned earlier, how to learn and develop all that we do. That’s our goal at the end of the day, is for nobody to know that we were ever there. Right?
James: [20:47] If you do…
Brian: [20:47] We come in, we support and then we roll out.
Jim: [20:51] Yeah. That’s when you know it’s a success when nobody knows. They get up in the morning…
James: [20:54] Wow. We had an hour.
Jim: [20:55] the water is hot, the eggs are being cooked, there’s heat in the house if you need it where you go. Electricity being generated by natural gas.
James: [21:04] Fantastic service.
Brian: [21:05] Yeah. It’s fun stuff.
James: [21:06] I’m learning a lot today. You two were…I knew it would be like this stuff.
Brian: [21:11] It took me about six months to pick up of what you picking up on James.
James: [21:13] I have no clue what you’re talking about.
Brian: [21:15] [laughs]
James: [21:15] I’m excited about it. I know there’s some other people out there, they’re geeking out. It’s a lot of people like me, we are learning. I understand our segment.
Brian: [21:25] Oh, you do?
James: [21:27] When I sit down with you I learn and that’s why it’s so important being there live. Like we talked about earlier, just being here live allows us to tap into that, metaphorically any of it.
Brian: [21:39] I love it. I love it.
James: [21:41] Are you ready to wrap up? You know what we should ask you?
Brian: [21:43] Yeah, ask up. Do it.
James: [21:45] Wait, were you? I can’t remember. Were you on at EWNCON that we grabbed you?
Brian: [21:49] No, yeah, I was at EWNCON.
James: [21:52] We can track him down.
Jim: [21:53] No, we couldn’t. He was always selling LNG.
James: [21:56] Are you ready? This is on the floor on the spot.
Brian: [21:59] OK.
James: [21:59] Truthfully hope, right? What does “be brave” mean to you? That was our campaigns because I don’t know that we launched at EWNCON. What does “be brave” mean, Brian?
Brian: [22:12] It’s funny. The first thing that popped in my head was a book that we had to recently read for some strategic planning updates. That book was, “What Got You Here Won’t Get You There.”
[22:21] When I think be brave, it feels free to step out of your comfort zone. Be brave about it, because you always should be progressing, whether that’s in business, that’s in your personal relationships, that’s in your walk with the Lord, that’s in anything. Always progress. Be brave. Don’t be scared.
Jim: [22:40] Beautiful answer. Absolutely beautiful. [laughs]
James: [22:43] Brian, it’s good to be back with you now.
Brian: [22:45] Yes sir. Thank you.
Jim: [22:46] Always brother. Always good.
Brian: [22:48] Yes sir.
James: [22:48] All right.
Jim: [22:49] We had to geek out on some reality stuff.
Jim: [22:52] Let’s go. Let’s go mine some big ones. Let’s go mine some big ones.
Brian: [22:55] I want to get some tankers. I’ve been in LNG since 2008. I can’t give up right now.
Jim: [22:59] All right, you guys go do that. Listen, thanks for joining us on this episode of Coffee Jim and James. Please, if you want to, look up Brian. He’s a wealth of information.
[23:07] [background music]
Jim: [23:08] Until next week, at Coffee Jim and James, stay safe. We’ll see you next time.
James: [23:11] Bye‑bye.
Brian: [23:12] Bye.
Jim: [23:12] Bye. Thank you.
Transcription by WatchingWords