Dick Brown believes the secret to successful technology innovation is simplicity. “To be adopted, it can’t be an esoteric solution—it needs to be not only innovative but really simple,” he says.
Brown knows what he is talking about. As president and CEO of Kathairos Solutions, he heads up a Calgary-based cleantech startup that’s attracting increasing industry attention. In March this year, the company was identified for funding of nearly $1.6 million from the Clean Resource Innovation Network (CRIN) to fund its Simple Methane Elimination project. CRIN funding is made possible by the federal government’s Strategic Innovation Fund (SIF). The project’s technology uses liquid nitrogen, a non-toxic, non-polluting gas, to power remote oil and natural gas well sites.
“It’s an incredibly simple solution that offers upstream producers an efficient, economic and low-maintenance way for eliminating methane emissions from well locations,” Brown says.
The CRIN recognition is the latest success for Brown and Kathairos, which was established two years ago.
A petroleum engineer by training, Brown is an entrepreneur with a proven track record. Back in 2001, he founded Ferus, an energy services company specializing in the supply of liquid nitrogen products for well stimulation. Before that, he held senior roles at Amoco Petroleum and subsequently developed and sold two successful exploration and production companies.
Search begins for technology solution
Two years ago, looking for a new challenge, Brown began to think about starting a new venture where he could apply his experience in energy and nitrogen handling. Teaming up with Jason Clarke, a local energy innovator he’d worked with at Ferus, he-cofounded Kathairos in 2020. The new company, whose name means “clean air,” would focus on helping companies to meet aggressive methane reduction targets.
“Methane is a very challenging greenhouse gas, being 25 times worse than carbon dioxide. There are many technologies that measure methane in the industry, but very few that actually set out to eliminate methane in an economical and scalable way,” Brown says.
To get started, Brown and Clarke brainstormed until gradually they landed on a technology idea: By filling a vertical storage tank with liquid nitrogen, they realized, it was possible to create enough pressure to power valves and pumps at the well site. In doing so, the need for methane as an operating fuel would be completely eliminated, as would the need to vent the gas after use.
“When stored in tank, liquid nitrogen rapidly builds pressure as it becomes gas. We could utilize this naturally occurring phenomenon by controlling the vaporization rate and, thereby, the resulting pressure, temperature and flow,” Brown explains.
An additional benefit—the technology would require no moving parts or on-site power, further reducing emissions, energy costs and maintenance. Plus, the new fuel source was abundant. The Kathairos team would source liquid nitrogen from industrial gas suppliers who take nitrogen from the air and turn it into a liquid using large industrial liquifiers.
The concept had lots of promise. But Brown and Clarke still had to prove it in the field.
Early success leads to endorsements
So, the two bought and customized used industrial nitrogen storage tanks and added custom circuitry to power pneumatic devices. Then, they began to look for an industry partner willing to give their new system a try. In the fall of 2020, Velvet Energy, a junior oil and gas company, agreed to test two demonstration units—one on a newly completed well and another on two brownfield wells—in the Edson area west of Edmonton.
The trial proved to be an immediate success, earning endorsements from Petroleum Technology Alliance Canada (PTAC) and the Canadian Emissions Reduction Innovation Consortium (CanERIC), an industry testing group.
Encouraged by these results, the Kathairos team refined the system further, adding instrumentation, satellite telemetry and a cloud-based data portal for producers to easily access emission reduction and carbon offset data.
As their technology matured, they formed a partnership with Chart Industries, a global leader in cryogenics (liquid nitrogen) equipment, to manufacture the tanks. At the same time, their company profile was growing. In the fall of 2021, their clean technology solution earned top honors in Denver at the Oil & Gas Cleantech Challenge.
CRIN project advances technology commercialization
Then, earlier this spring Kathairos scored another win when it was identified for CRIN funding for its Simple Methane Elimination project. In partnership with Cenovus Energy and Ovintiv (formerly Encana), the two-year project involves using the technology to eliminate methane venting on an estimated 60 remote oil and gas well sites in northwestern Alberta. This includes 40 single well sites with Cenovus and an additional 20 multi-well pads with Ovintiv. As the technology is implemented through the project, it’s estimated that greenhouse gas emissions will be reduced annually by an estimated 18,000 tonnes of carbon dioxide equivalent (CO2e).
“We’re taken a concept and moved it to extensive commercial operation,” Brown says.
According to Brown, this demonstration project has the potential to show the scalability of the technology to address methane venting at thousands of well sites in Western Canada.
Brown also sees significant market opportunities for his technology in the United States, where there are 350,000 well sites facing similar methane issues. Early this year the Kathairos system was piloted in the Marcellus Formation in the northeastern U.S. in partnership with a major international producer. Within just two weeks of the pilot launch, the company expanded the project to an additional 220 wells, allowing Kathairos to address its entire Marcellus portfolio.
Since that time, an additional 30 U.S. and Canadian producers have initiated trial and commercial operations with Kathairos across the Marcellus, Utica, Haynesville, Bakken and Montney basins.
“Until now, addressing the methane issue at well sites has been difficult and cost prohibitive, particularly on small, low production wells. We are excited to be changing that situation.”