Pricing and Versatility
Are the tanks rented, leased, or purchased?
Adopting the Kathairos solution requires no capital outlay thanks to its innovative monthly tank rental and refill model. It is a highly economical solution that requires zero upfront cost, ongoing operator involvement, replacement of existing systems, repair and maintenance, or onsite power.
What are the various costs associated with the Kathairos system?
- System commissioning: This one-time fee covers the delivery of your liquid nitrogen units to your staging yard, and the initial cooldown and commissioning of the tanks. Commissioning time is one to two hours per site and completed in a single visit. Kathairos has the capacity to deliver the systems within six to eight weeks from time of order thanks to our manufacturing partnership with Chart Industries, continuous production line, and robust tank inventory at our many North American field offices and staging yards.
- Mixed monthly system rental fee: The monthly rental cost of the Kathairos' liquid nitrogen storage tank and telemetry system is priced according to the size of system required. Our range of tanks service every size and configuration of well site, with a singular tank often powering enormous multi-well pads.
- Variable monthly nitrogen fee: This all-in fee covers the service side of the Kathairos solution, including a dedicated field crew, nitrogen procurement, dispatch and delivery, plus 24/7 system monitoring, management and optimization.
- Nitrogen rates: Deep, non-exclusive partnerships with leading industrial gas suppliers and our expansive North American service network enable us to deliver small-scale liquid nitrogen refills directly to our customer’s well sites that are unbeatable in price, certainty and reliability across every US and Canadian oil and gas producing basin.
- Usage-based billing: Producers only pay for the emissions actually eliminated, given that nitrogen use increases and decreases proportionate to pneumatic actuation. Thanks to the gas equivalence ratio (GER) between nitrogen and methane and the closed nature of the Kathairos system, we know that every unit of nitrogen consumed equates to 1.2764 units of methane abated. And within hours of operating with us, our producer partners know it too.
Does the Kathairos system make sense for both big and small-sized well pads?
Kathairos can cater to both large sites with numerous wells and smaller sites with fewer pneumatics, adapting the tank size and service accordingly.
Why is the Kathairos system so well-suited for smaller, single well or low-vent sites?
Because of its low monthly operating cost, the Kathairos solution has proven highly effective at addressing the longstanding issue of venting at small legacy well sites, providing producers with a simple, effective and affordable way to meet incoming methane regulations and compliance timelines.
Is it also suitable for large, multi-well pads and greenfield sites?
On both electrified and off-grid sites, Kathairos’ larger tanks prove to be an extremely economical, reliable solution for new unconventional facilities, where a single tank can power up to 50 wells and 500 devices, on the same 30-day refill cycle as a smaller unit.
How do the economics of the Kathairos system compare to alternative solutions?
Kathairos' unique tank rental and nitrogen refill model allows for the lowest cost solution in the fight against remote well site methane emissions. The system is very competitively priced compared to alternative solutions over both the short and long-term, particularly when cost savings from conserved fuel gas, methane tax avoidance and carbon credit generation are considered, and the fact that there is no downtime, site disruption, delivery delays, maintenance, parts replacement, operator involvement or capital asset depreciation. When you further consider its reliability, scalability, simplicity, affordability and empirical data generation, the system comes out ahead.
Capitalizing Lease Costs Under IFRS 16
This FAQ is provided solely to support customers in their internal evaluation processes. Kathairos Solutions assumes no responsibility or liability for accounting determinations made by customers or third parties.
Can Kathairos Solutions be capitalized under IFRS 16, even if classified as an operating lease?
Subject to the materiality provisions and criteria set out in the IFRS 16 Leases standard, costs associated with the Kathairos Solution may qualify as a lease which can be capitalized. The determination depends on specific facts and circumstances, including the nature of the leased asset, the lease term, and the accounting and financial reporting policies of the lessee.
Are other companies capitalizing the costs of Kathairos Solutions under IFRS 16?
Yes. Kathairos Solutions customers, including upstream oil and gas producers, are actively capitalizing the associated lease costs under IFRS 16. These customers typically do so in close coordination with their internal accounting departments and relevant subject matter experts, ensuring compliance with applicable financial reporting standards.
What does capitalization under IFRS 16 entail?
IFRS 16 generally requires lessees to recognize most leases on the balance sheet, even if commercially structured as operating leases. This includes:
- Right-of-use asset: Represents the lessee’s right to use the leased asset for the duration of the lease term.
- Lease liability: Reflects the present value of the lease payments the lessee is obligated to make over the lease term.
What is the potential benefit of capitalizing Kathairos Solutions under IFRS 16 for upstream oil and gas producers?
Capitalizing the lease cost of Kathairos Solutions as a right-of-use asset under IFRS 16 may offer several potential benefits, depending on the operator’s accounting and financial practices:
- Alignment with capital project accounting: Costs may be integrated into field development or infrastructure projects supporting long-term production.
- Joint venture cost recovery: Capitalized assets may be eligible for recovery under joint operating agreements, subject to operator policies and partner approval.
- Timing of cost recognition: Front-loading recognition of some lease cost components vs treatment as a monthly expense.
- Changing expense classification: Some components of lease expense may be classified as financing activities rather than operating activities.
Each of these outcomes is subject to internal policy, lease structure, and professional accounting judgment.
What should my company do to evaluate the appropriate treatment?
We recommend engaging your internal finance or accounting function—particularly those responsible for lease accounting, asset capitalization, and joint venture reporting—to assess the lease classification and capitalization opportunity under IFRS 16. External auditors or advisors with oil and gas sector experience can also provide valuable guidance.
Does Kathairos Solutions provide accounting or financial advice?
No. Kathairos Solutions does not offer accounting, legal, or tax advice. The information provided here is for general informational purposes only and should not be relied upon as a substitute for professional advice or internal evaluation.