Gerardo Huitrón
Director General
Baja Tank
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Insight

Storage Tank Solutions for Drilling Operations

Wed, 01/22/2014 - 11:29

Baja Tank Manufacturing is spreading out from its base in Baja California as a distributor and leaser of storage tanks to cater to the needs of the Mexican oil and gas industry. Since 1999, it has sold more than 6,000 storage tanks to predominantly US buyers, but as a Mexican enterprise, it sees growing potential south of the border. Counting on the support of its sister companies, Gimco and Montank in Mexico, and ER Manufacturing in the US, Baja Tank now provides storage tanks to many PEMEX contractors, including Halliburton, Schlumberger, M-I SWACO, and Calfrac. Commonly known as frac tanks, Baja Tank’s units are used to deposit all sorts of by-products, including brine, drilling fluids, and mud, among other materials. Baja Tank modifies its products to various needs. One type of tank has a pipe connector that allows fluids stored inside to recirculate and prevent sedimentation, while another is dedicated to fluid mixing to produce drilling fluids. Its products have a service life of 15 years with proper maintenance, a longevity Baja Tank claims outpaces its competition. 

A decrease in demand for such equipment on the US West Coast led Baja Tank to seek opportunities in Mexico, firstly around the Villahermosa area. Gerardo Huitrón, Director General of Baja Tank, says this move has paid off with the netting of A-list clients like Halliburton and Schlumberger. “We have more than 200 tanks which are all currently leased, and our manufacturing activities are increasing. We have also created customized tanks exclusively for Schlumberger by combining engineering efforts between their crew and our team in Ensenada,” he says. The company’s tanks are already being used at wells located in areas such as Altamira, Panuco, Magallanes, and Carrizo.

As the company decided to move deeper south into Mexico, it did not have to change any of its tanks’ specifications. “Having been a long-time supplier to the US market, Baja Tank’s adherence to solid quality standards has allowed us to avoid any difficulties when offering our products to the Mexican oil and gas industry. We have never had a complaint about any tank since the company began operations 14 years ago and we have passed every auditing held by our clients,” Huitrón affirms. Nonetheless, one important challenge is related to the high concentration of acids that are utilized in drilling operations, which must be stored in specialized tanks. Consequently, Huitrón views this as an area of opportunity that Baja Tank could take on by partnering with other companies that have specialized materials for such projects. “We need to prepare ourselves to tackle this attractive market,” Huitrón points out.

Baja Tank’s current portfolio reaches the majority of Mexico’s oil regions. The company has branches and tanks available in Monterrey, Reynosa, Poza Rica, and Villahermosa. Moreover, as a result of a hike in the demand for storage tanks, a new manufacturing plant was opened in Monterrey to cover the surrounding areas. “At the moment, by working with 160 employees at full capacity during three shifts, we are capable of building 14 tanks per week in Ensenada and four in Monterrey. We plan to increase our capabilities in Monterrey to eight, and expand our business line to 400 tanks,” Huitrón specifies. Although heavy investment is required for these new units, Baja Tank’s current strategy is to continue collecting returns on its leased tanks and create synergies in the industry to increase its supply capacity.

Baja Tank’s business expectations are high as new drilling operations in the north of Mexico begin. A new area of opportunity is also rearing its head. “Natural gas production in the Burgos Basin will require large volumes of water, and we know that this resource is scarce in the region. The possibility of becoming a water supplier through our storage tanks becomes very interesting,” Huitrón asserts. A very similar process has already been implemented in the US for a long time, where a certain number of storage tanks filled with water are taken to the field. After drilling operations are completed, the tanks are refilled with the contaminated fluids and serve as storage units until vacuum trucks arrive to take the waste away. But despite this opportunity, Huitrón is cautious. Although contemplating potential partnerships to enter the water supply market, Baja Tank is mindful that is first priority remains taking care of its current client base. “Above all, our main focus is quality. There is no such thing as good or bad quality, but just plain quality. This is why we aim for our clients to leave the operation of the tanks to us so that we can guarantee reliable safety standards,” Huitrón outlines. The company also enforces a bi-monthly accident prevention maintenance policy, where its staff goes to each worksite and inspects each storage tank’s conditions. “We always ask our clients to focus on their core business and allow our team to take care of their fluid storage needs. This has become an essential aspect of our work,” he concludes.