27 March 2020
Antelope balances water sustainability with new growth opportunities
Antelope Water Management’s new technology acquisition positions the company as a key player in water reuse and opens the door for portfolio diversification.
Beneficial reuse of produced water is a concept that is gathering momentum, particularly in states such as New Mexico where freshwater scarcity and saltwater disposal constraints are intensifying. With this emerging opportunity in mind, earlier this month Delaware Basin-focused Antelope Water Management purchased a Canadian vacuum membrane distillation firm and re-established it in the US as KMX Technologies.
“There are several solutions for water management out there and moving from disposal to recycling and then to beneficial reuse is the necessary path forward for the industry,” Antelope CFO Zachary Sadow told Water in Oil, explaining the motivation behind the acquisition.
Technology capable of treating produced water to a quality suitable for use outside the oilfield has existed for many years, but the economics have always been unfavorable. According to Antelope CEO Dustin Brownlow, however, KMX’s proprietary design has several advantages that make advanced treatment cost-competitive with traditional disposal options.
At the core of the technology are hollow-fiber membranes that are resistant to fouling, therefore reducing maintenance-related downtime and costs. The technology has also been designed for energy efficiency. Systems operate at lower than 15 psig and can withstand temperatures up to 75° Celsius (167° Fahrenheit) – well within the typical temperature range for conventional and unconventional produced water – likewise contributing to low operating costs.
KMX’s technology has undergone several pilots with operators and government entities since 2017, including at steam-assisted gravity drainage and bitumen mine developments in Canada’s oil sands and unconventional projects in Canada, Texas and New Mexico. The trials have consistently demonstrated that the technology can outperform traditional and high-efficiency reverse osmosis systems, recovering more than 90% of water and concentrating waste streams to more than 300,000 ppm of total dissolved solids.
Select performance indicators from US Bureau of Reclamation pilot project (July 2019)
|Constituent||Feedwater (mg/l)||Permeate (mg/l)||Concentrate (mg/l)|
Total dissolved solids
Total suspended solids
Source: Pacific States Water
Though New Mexico has not yet implemented beneficial reuse regulations, Antelope’s executive team is already engaging various stakeholders on the topic. Brownlow told Water in Oil that Antelope is considering several options for KMX’s technology, including integration into large-scale recycling plants the company is constructing in the Delaware Basin, as well as semi-permanent modules that can provide advanced treatment near sites where the water would be reused.
“The state of New Mexico and producers want to see beneficial reuse happen,” Brownlow said. “A wise move would be to jump into and be a leader in this industry. It’s a viable opportunity.”
The KMX acquisition also allows Antelope to contemplate extracting rare earth elements and lithium from produced water and mine tailings. This pursuit would enable the company to further its commitment to sustainable energy solutions while cultivating an alternative revenue stream, which is especially significant in a sub-$30/bbl oil price environment.
“We want to align our investment with the energy transition. There’s going to be more demand for the critical minerals that are needed for that, whether for electric vehicles, infrastructure, satellites or other sensitive industries that rely on rare earth elements and lithium,” Sadow said.