EMISSIONS REDUCTION INITIATIVES

Continuing our comprehensive leak detection and repair (LDAR) program, including detection, repair, documentation, and data analysis and directed maintenance.

We are committed to providing safe, affordable, secure and reliable energy while driving down global emissions both today and in the future. Through our focus on efficiency and continuous improvement, we were able to eliminate routine flaring* in our year-end 2022 operations, in alignment with the World Bank’s Zero Routine Flaring by 2030 Initiative. Since then, we have acquired new assets in the Permian Basin and are working to align those assets as well.

To better understand where and when flaring occurs in our operations, we created an internal dashboard to examine flaring volumes. We utilize the data to generate plans to reduce flaring volumes through a variety of innovative approaches, including novel midstream solutions. For example, we have deployed on-site data computing solutions that utilize gas that would have been flared to generate electricity to power the mobile data centers. We also successfully piloted mobile compressed natural gas generation facilities to complete a virtual pipeline network, connecting producing locations to the midstream pipeline network via trucking solutions with specialized trailer systems.

*In general, routine flaring occurs during normal oil production operations in the absence of facilities or geology needed to re-inject the produced gas or the ability to use it on-site or send it to market. Non-routine flaring of natural gas may occur for safety reasons and is temporary by nature. The World Bank initiative does not include non-routine flaring events, such as: exploration and appraisal; initial well flow-back; well servicing; process upset; safety or emergency situations; equipment or gas-handling infrastructure malfunction; or de-pressuring equipment for maintenance. Also excluded is purge and pilot flaring necessary for safe flare operation and combustion of hazardous or polluting emissions, such as volatile organic compounds and hydrogen sulfide.

Natural gas-fired burners are used in the surface facility process to meet sales specifications before oil flows into the sales pipe. We have made a focused effort to gather operational data on the burners in our Anadarko and Permian operations. In addition to increasing the accuracy of our GHG reporting, this data has enabled operational synergies such as optimizing burner fuel usage and increasing production reliability.

Ovintiv has developed low-emitting wellsite designs that are being routinely implemented across our operations. The designs incorporate numerous technologies and practices that support reducing emissions, including:

• Eliminating high-emitting equipment such as line heaters
• Reducing our pneumatic chemical injection pumps by about 75%
• Replacing our high-bleed pneumatic devices
• Finding alternatives for natural gas pneumatics (e.g. electric actuation, instrument air or liquid nitrogen systems)

In the U.S., our new well-pad facilities use instrument air skids in place of natural gas-powered pneumatics. We employ a fit-for-purpose design that allows for alignment and synergies between asset areas. In Texas, we have also developed a low-emitting vent design on our Permian wellsites, which includes zero-bleed pneumatic devices and electrically operated control valves and chemical pumps.

In Canada, the current design involves a closed system that captures and combusts methane from gas-driven pneumatic controllers and pumps that would otherwise vent to atmosphere. Field tested in 2020, the non-venting wellsite design has subsequently been deployed at new wellsites in British Columbia and Alberta. We are also installing nitrogen systems that replace natural gas as the drive gas, avoiding potential methane emissions. Nitrogen is a non-polluting gas that makes up most of the air we breathe. These units have been installed on approximately 50 sites in Alberta and 10 sites in British Columbia and are now standard design for new wells in Canada. This technology was also featured at COP28 by the Government of Canada as one of Canada’s innovative, home-grown technology solutions to methane emissions.

Ovintiv developed these robust designs in advance of regulatory compliance requirements taking effect, and we continue to evaluate alternative designs and technologies that could further improve emissions performance across our operations.

To reach sales specifications at our well pad facilities, oil must be stabilized at low pressures (close to atmospheric levels) and is stored in tanks. In the past, it has been difficult to capture the vapors from the last stage of pressure drop, therefore, the typical protocol is to burn the vapors in a low-pressure flare. To further minimize our venting and flaring, we are now capturing those emissions using vapor recovery units (VRUs). The VRUs capture the emissions and compress them into the sales line, which also generates revenue. This technology will result in an approximately 80% reduction in GHG emissions associated with low-pressure flaring per facility. While this has become a standard element of low emission advanced facilities (LEAF), we are also evaluating the potential to upgrade tanks on our legacy assets to achieve similar results.

In British Columbia, Canada, the electrical grid is powered by hydroelectricity rather than natural gas or coal. The majority of processing plants that Ovintiv operates in the Montney field, including the Saturn, Sunrise and Tower gas plants, are tied into the clean electrical grid in British Columbia. These plants avoid up to 860,000 tons of carbon dioxide equivalent emissions annually, comparable to the emissions from 184,000 vehicles per year. Electrification has the added benefit of reducing operational noise compared to non-electric facilities. We continue to leverage electric power on new equipment and are evaluating converting existing infrastructure where appropriate.

​​​​For example, Ovintiv entered into an agreement in 2023 with a midstream company to electrify a processing plant in British Columbia, reducing our GHG emissions while adding processing capacity. The electrification of the facilities also allows Ovintiv to tap into the new transmission line at no cost, which will provide additional power capacity to other plants utilized by Ovintiv, both increasing capacity at one plant and converting a major compressor station from gas drive to hydro-based power.

As part of our focus on driving efficiency across our business, we have integrated a natural gas-powered frac fleet in our Canadian operations in place of the traditional diesel-powered fleet. This innovative technology has driven down emissions on-site, with a greater than 20% reduction in completions emissions, driving down diesel consumption by more than four million gallons in 2023. It also has a much smaller physical footprint; a pad that normally required 18 diesel pumps, now uses eight high-powered natural gas pumps. This decrease in equipment and activity has also resulted in positive safety outcomes, a top priority in all our operations.

After exploring ways to expand similar technology in our U.S. operations, in mid-2023 we began utilizing natural gas-powered frac fleet technology in our Permian operations. The gas-powered fleet is being integrated with our innovative trimul-frac technique to gain efficiency while driving down diesel usage and lowering our emissions.

In late 2023, we also utilized a natural gas-powered frac fleet in our Anadarko operations, further driving down our diesel consumption. We will continue to look for opportunities to utilize this technology in our U.S. operations.

Ovintiv began upgrading our fleet of natural gas-driven compressor engines to a lower emissions alternative in our Canadian operations in 2022 and have since upgraded 12 engines, replacing a total of 18,000 horsepower at five compressor sites in British Columbia. These new engines have minimized methane exhaust slip, resulting in methane emissions reductions of more than 70% at subject sites. They have also increased reliability, lowered operating and maintenance costs, and have an option to increase horsepower for incremental production throughput.  

In our Permian and Anadarko operating areas, we are testing instrumentation to measure engine load and calculate fuel consumption by incorporating engine data and manufacturer-published analytical tools. This will increase the accuracy of our reported GHG emissions from gas lift compressor engines and provide optimization data that will increase utilization and lead to a more efficient use of horsepower per well.

We are testing electrified drilling rigs in place of traditional diesel-powered generators, which will result in an estimated 50% reduction in drilling emissions per well and significantly reduced job-site noise levels. There are existing synergies in place, for example, our pad sites already use electrical power once the wells start producing. This effort required cross-team collaboration between electrical engineering, construction, production operations and our drilling team. We also worked closely with our supplier to create diesel redundancies to ensure seamless operations during utility-power upsets. We successfully drilled over 15 wells using electric drilling rigs to-date and are evaluating opportunities to expand this program going forward.

In operating areas with available electricity, we are evaluating the opportunity to expand our electric-drive portfolio to include:

• Artificial lift technology (gas lift, pump jacks and jet pumps)
• Water and disposal well facilities
• Process controllers (e.g., liquid-level controllers)  
• Chemical and fluid transfer pumps  
• Lease automatic custody transfer units  
• Vapor recovery units 

We are introducing this equipment across our operating areas and will continue to evaluate opportunities for growth as electricity becomes available.

We are committed to understanding potential business opportunities that complement our vision of being at the forefront of driving innovation to produce oil and natural gas – both profitably and sustainably. 

Ovintiv is currently exploring options, both in Canada and the U.S., to expand market access for our natural gas production via LNG exports. In 2023 we announced our partnership with Rockies LNG Partners (“Rockies”). Rockies is a group of Western Canadian natural gas producers working together to support LNG export opportunities for Canadian natural gas and is joined in a unique alliance to develop the Ksi Lisims LNG project off the west coast of British Columbia. Ovintiv’s participation in the Rockies partnership provides us the option to enter a long-term agreement to supply natural gas to the LNG facility, subject to a final investment decision on the project. The project has the potential to reduce up to 50 million tonnes per year of global GHG emissions by displacing Asian coal-fired power generation. It also offers the shortest shipping distance to Asian LNG markets from North America and has the lowest well-to-port GHG footprint in contrast to other LNG-producing regions.

We are continuously pursuing opportunities to collaborate on new emissions reduction technology with a variety of partners, from universities, service providers and peer companies to start-ups and remain focused on uncovering and supporting innovative, scalable solutions to complex challenges.