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 relentless pursuit of efficiency and continuous improvement, we have eliminated routine flaring in our year-end 2022 operations and have been fully aligned with the World Bank Zero Routine Flaring Initiative since September 1, 2021. 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.

To better understand where and when flaring occurs in our operations, we created an internal dashboard to examine flaring volumes in real time.

Ovintiv has developed new, low-emitting wellsite designs that are being routinely implemented across our operations and are a result of numerous technologies being deployed across our operating areas, including:

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

In Canada, the design involves a closed system that captures and combusts methane from gas-driven pneumatic controllers and pumps that would otherwise vent to atmosphere. Rigorously 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 which 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 over 40 sites in Alberta.   

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.

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. 

In British Columbia, Canada, the electrical grid is powered by hydroelectricity rather than natural gas or coal. The majority of Ovintiv’s processing plants 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. 

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.  

As part of our focus on driving efficiency across our business, we are integrating a natural gas-powered frac fleet in our Canadian operations in place of the traditional diesel-powered fleet. This innovative technology represents a significant opportunity to drive down emissions on-site with an expected 15% reduction in completions emissions. It also has a much smaller physical footprint; on a pad that would normally require 18 diesel pumps, we are using only eight high-powered natural gas pumps. This decrease in equipment and activity should also result in positive safety outcomes, a top priority in all of our operations. We are also exploring options to utilize similar technology in our U.S. operations and will expand upon those opportunities in 2023 and 2024.

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 as 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 10 wells using electric drilling rigs in 2022 and are evaluating opportunities to expand this program into 2024. 

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.

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 80% reduction in GHG emissions associated with low-pressure flaring per facility. When combined with other emissions reduction pilots, the overall result is a reliable design that reduces the GHG intensity of the facility.  

Ovintiv has begun upgrading our fleet of natural gas-driven compressor engines to a lower emissions alternative in our Canadian operations. These new engines minimize methane exhaust slip and are expected to result in methane emissions reductions in excess of 70% at subject sites. The upgrades are also expected to increase reliability, lower operating and maintenance costs, and have an option to increase horsepower for incremental production throughput. We have upgraded four engines to date and are working to expand this opportunity to additional units within the fleet in 2023. 

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.   

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