Resource Opportunity
CompactGTL exploits a vast market opportunity created by the difficulties of dealing with associated and stranded gas in remote and deepwater locations.
Large volumes of resources of gas are either flared or remain undeveloped in remote locations because of the commercial and technical challenges of getting gas to viable markets.
The gas is either associated gas, produced as a by-product of oil production, or, stranded gas, where the accumulation is predominantly or totally composed of gas.
Associated Gas
When an oilfield is developed, the hydrocarbon stream being produced contains a variety of products from oil through to liquid petroleum gases (such as propane or butane), and natural gases (methane and ethane). Crude oil is separated from the gas, before typically being treated to meet the quality requirements of the transportation system and being shipped via pipeline or tanker, depending on field geography and export logistics.
Dealing with associated gas at remote locations often poses a fundamental challenge to oil companies, where there is no commercially viable or technically feasible route to market for the gas or other disposal methods.
There are two conventional disposal options for associated gas:
- Flaring: The unwanted gas is burnt off into the atmosphere. Flaring represents a massive resource waste and is also a considerable environmental problem, representing some 400 million tons of annual CO2 emissions.
- Reinjection: The gas is re-injected into the reservoir. Gas is often re-injected with the intention of preserving adequate reservoir pressure to ensure sustained, or sometimes increased, oil production. Where there is excess gas, however, “forced” reinjection can occur where there is no other option for disposing of the gas. In many situations, re-injection for gas disposal may not be technically feasible and can also complicate reservoir management, in the worst case carrying risks of damaging reservoir performance.
Market analysis reveals over 800 oilfields globally, onshore and offshore, where associated gas is problematic and conditions suit a modular GTL solution. There is an estimated total of over 73Bn bbls of crude reserves across these assets.
Source: Source: Wood Mackenzie & Fugro Roberson analysis commissioned by CompactGTL
The World Bank estimates that around 5 trillion cubic feet (c.140 billion cubic metres) of natural gas is flared annually, which is equivalent to:
- 20% of the United States’ gas consumption
- 30% of the European Union’s gas consumption
- 2x the annual gas consumption of Africa
- 75% of all Russian gas export
- Entire world gas demand for 20 days
Heatmap – infrared satellite directions of natural gas flaring across the Earth – http://skytruth.org/viirs/
Flared gas represents foregone revenues of US$2.5 billion per year in Nigeria alone.1
Stranded Gas
There are estimated to be 963 TCF of global stranded natural gas resources. These resources are stranded because there is no economical way to monetise the gas due to the costs of getting it to market.
Development options for stranded gas resources are limited by technology availability and commercial limitations. Where no accessible infrastructure (such as a pipeline or power plant) exists, the current main technology options are conventional GTL and LNG, both of which cost billions of dollars and are only economically viable when built at very large capacities in order to achieve the required economies of scale and to justify the significant product export logistics required.
The company has identified over 2,000 potential global problematic gas opportunities with resources totaling over 500 TCF gas, equivalent of 7.8 million barrels per day of GTL oil.
1 Columbia Center on Sustainable Investment ‘Associated Petroleum Gas’ 2014; “Nigeria Gas” Nigerian National Petroleum Corporation (NNPC)