Solugen leading the way in low cost, bio-based tech

July 19 2019

The massive volume of produced water in the Permian Basin is a cause for concern for some operators in the region, inspiring innovators to concoct fresh technologies to break down the barriers of what is feasible in the field.

One company attempting to bring new and more cost-effective options to the table is Houston-based startup Solugen, which initially focused on producing peroxides from plant feedstocks. Founded in 2016 by Gaurab Chakrabarti and Sean Hunt with $5 million in seed money, the company has already acquired two more rounds of funding since late 2018 worth a total of $45.5 million and has won contracts with major oil and gas producers in the Permian Basin.

Solugen manufactures bio-based products for use in upstream operations, such as ScavSol, an iron-chelating agent, and BioSol, a hydrogen peroxide produced by unconventional means. Though the company did not set out with the intention of servicing the oil & gas industry, its founders saw some of the greatest opportunities in produced water applications.

The production of the company’s ScavSol solution entails using CRISPR, a gene-editing technique, to modify enzymes in order to oxidize dextrose sourced from US corn mills. The enzymatic process turns the sugars into powerful divalent chelants that prevent iron from precipitating, making water more suitable for disposal, hydraulic fracturing and EOR.

Using the chelant prevents iron carbonate, iron oxide and iron hydroxide scale. It also removes iron sulfide and polysulfide scale in critical infrastructure, thus preventing flow restrictions. ScavSol does not contain sulfates like some other commonly used iron chelants do. Standard biocide and chelating agent THPS, for example, can contribute to barium and strontium sulfate scale under certain conditions. The company reports that, so far, ScavSol’s iron precipitation and oil/water quality has been on spec in production system applications and customers have seen reduced injection pressures in saltwater disposal applications.

Since all materials are sourced from the US, in contrast to other commonly used iron-chelating agents such as THPS and THPC that are largely imported from China, Solugen has been able to reduce the cost variability of its product.

“Pricing is a delicate number because there are a lot of different technologies right now to control iron,” Solugen’s vice-president of sales, Tom Swanson, told Water in Oil.

For average Permian-produced water with an iron content of about 25 ppm, Solugen estimates ScavSol’s cost to operators to be $0.01/bbl. That price could rise or fall depending on iron content, which can be within the range of 10-100 ppm, due to various factors including where in the basin the water is produced and pre-treatment corrosion.

Solugen aims to move its business beyond its Houston labs with a unique production and supply model known as its “mini-mills,” which it estimates will contribute to an additional 25-50% reduction in freight cost savings with production facilities situated closer to the source of raw materials.

Chakrabarti told Water in Oil that US corn mills and shale plays are often located near the same areas. “That is perfect for us because we want to get into an in-basin water treatment program where we can take the feedstock from a local corn mill and convert it in the basin for the end customer, decreasing the shipping costs associated.”

Solugen is looking to roll out its mini-mills within the next 3 years, starting in West Texas so that it can service the Permian Basin. In the meantime, the company is adding new customers in that area and preparing for the startup of local production.

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