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Top 10 Global Gas Reserves, 2009
1600 1400 1200 Trillion cubic metres 1000
400 200 0 Russia Iran Qatar Turkmenistan Saudi Arabia US UAE Nigeria Venuzuela Algeria
Top 10 Producesrs in 2009
% 0f world total (tcm)
0 US Russia Canada Iran Norway Qatar China Algeria Saudi Arabia Indonesia
. World Natural gas Consumption 2003: 90 Tcf 2020: 153 Tcf ( EIA.23 Tcf/year in 2002 to 9.World Natural Gas Consumption • Natural gas is rapidly becoming the premier source of energy.39 Tcf/year in 2020 in just the United States. 2003) • Demand in electricity generation for natural gas as fuel is set to increase by 80% from 5. International energy outlook.
Solar and wind are insignificant contributors and will continue to be so.Drivers Power generation Using Coal as fuel: $84/MWHr Using natural gas: $41/MWHr Other energy sources( nuclear and hydroelectric) about 14% of the market but with considerable restrictions. Natural gas in Transportation and a Source for Hydrogen (When and how?) .
The New Energy Economy Carbon content: • • • • • Wood (1800s) Coal Oil Natural Gas Hydrogen (envisioned) High Medium Low (Zero) Increasingly: • Clean • Energy intensive • Technologically sophisticated • Distributed The emerging “hydrogen economy” better characterized as a “fuel cell economy” that will run on natural gas--i.e. a “natural gas economy” .
University of Houston Law Center. 7 . NGLs. LPG. propane.What is CNG. and GTL? Typical Natural Gas Composition LNG Composition Ethane Methane 82% Other 19% Nitrogen Propane Carbon Dioxide Butane Pentane Methane 95% Others 5% NGL Composition LPG Composition Ethane. LNG. All rights reserved. butane 95% Others 5% Propane and Butane 95% Others 5% © 2005 by Institute for Energy. Law & Enterprise.
Reservoir Fluid Gases Natural Gas
Wet Gas •Gas in Reservoir But Liquid and Gas on Surface •Separating Conditions are in Fluid Two-Phase Region Dry Gas •Gas in Reservoir and Gas on Surface •Both Reservoir and Separating Conditions are in Fluid Single (Gas) Phase Region.
• Principally Methane • Mainly Used as Fuel • Occasionally Has Liquefiable Components (Condensate or Natural Gas Liquid; NGL) NGL on Fractionation Produces •Ethane • Propane •Liquified Petroleum Gas(LPG, C3/C4Mix) • n-Butane • I-Butane • Natural Gasoline(C5+) Liquefied Natural Gas •Natural Gas Liquefied for Purpose of Transportation
Forecast of World Energy Consumption
Hydro, Geothermal, Solar
% % Share Share 8.1 3.5 15
400 300 200 100 0
% Share 5.9 28.9 0.4 % % Share Share 6.5 5.9 26.1 % Share 7.0 7.0 6.8 6.3 24.4 23.7 22.7 22.1
47.3 38.9 38.7
Natural Gas Consumption and Production in the US
00 36" LP Offshore Gas Line (10) 42" HP Offshore Gas Line (30) 56" LP Onshore Gas Line (32) $/BBLOE Two Train LNG (11) $20.000 4.00 36" LP Onshore Gas Line (10) $2.00 $10.000 MILES Jensen Associates 6.Figure 1 ILLUSTRATIVE COSTS (2002 PERSPECTIVE) OF GAS AND OIL TRANSPORTATION SHOWING GAS'S HIGHER COSTS AND THE EFFECT OF SCALE (Gas Delivery Capability in BCM) $/MMBTU $4.00 Onshore Crude Line Crude Oil Tanker $0.00 0 2.00 $1.000 .00 $3.000 8.
1 Bn $1.6.1 Bn $10. GULF) REQUIRES ABOUT 12 TCF OF RESERVES TO SUPPORT A 20 YEAR CONTRACT CAPEX Field Development (Varies) $3.70 $5.23 Regasification (Varies) Total $1.15 Tankers (10 @$210 Mn) $2.0 MMT TRAINS .S.08 12 .3 Bn $2.5 Bn $0.00 Liquefaction $4.100 NAUTICAL MILES (ROUGHLY THE DISTANCE FROM NIGERIA TO THE U.ELEMENTS OF AN LNG DELIVERY SYSTEM BASIS: TWO 4.0 Bn COST OF SERVICE $1.
. University of Houston Law Center. Law & Enterprise.Compressed Natural Gas (CNG) © 2005 by Institute for Energy.
Scope of the CNG Technology • Projects using the CNG technology can be successful technically and commercially • CNG is capable of meeting small market demands and monetizing small supply areas • Majority of the investment involved with shipping needs. thus. making the assets movable and used in other areas of interests • CNG can supply gas for distances of 2500 miles cheaper than LNG .
Transport Costs •Supply Matched with Demand Centers •Smaller Demand Centers can be converted to gas Transport costs range from $1.25-1.75/MMBTU (100-300 MMSCF) .
J.Compressed Natural Gas (CNG) Advantages • • • • • • Simplicity Inexpensive onshore facilities Can start with very modest transporting needs Energy efficient Can exploit isolated supply sources Suitable for small demand markets Source: Deshpande. M. A & Economides. – University of Houston .
CNG appears more attractive than LNG • Major advantage in terms of market entry • Much less capital deployed in country • Up to 2 Bcf on a ship • Ideal for limited supply.CNG Application • For distances up to 2500 miles. 17 . Law & Enterprise. limited consuming markets © 2005 by Institute for Energy. All rights reserved. University of Houston Law Center.
All rights reserved. University of Houston Law Center. 18 .Transportation of the gas 90% of the investment involved is in shipping of the gas. Law & Enterprise. Loading and unloading is possible and easy with small facilities. © 2005 by Institute for Energy.
. Law & Enterprise.CNG Cargo Containment System © 2005 by Institute for Energy. University of Houston Law Center.
odorless.What is Liquefied Natural Gas? LNG is natural gas that has been super cooled to minus 260 degrees F becoming liquid for easier storage and shipping LNG is a clear. colorless. noncorrosive and non-toxic liquid LNG takes up 1/600th of the space – simplifying storage and transportation .
a Q-Flex.5 Bcf • LNG floats on water if spilled • There are 113 LNG facilities in the U. carries 4.S.LNG Fast Facts • An average LNG tanker carries 2.9 Bcf • The largest. .
Composition • 95% methane. 5% other heavier hydrocarbons .
3ppg) LNG floats on water. Over-Rich Will not burn Upper Flammability Limit (UFL) 15% Lower Flammability Limit (LFL) 5% Flammable Too Lean .9ppg (Water 8.LNG Properties 100% Density 3.Will not burn Flammable Range for LNG (Methane) . Flammability range 5 – 15%.
forming visible “clouds”. environmental clean up required. forming vapor clouds which could be flammable or explosive under certain conditions. James P. April 2003 as modified by industry sources. AiChE Meeting. New Orleans. -50 90 1. same As LNG Yes.3-6 Atmospheric Flash point F Boiling point F Flammability Range in air % Stored Pressure o o -306 -256 5-15 Atmospheric -156 -44 2. nausea. Evaporates. Lewis. William W.5 Pressurized (atmospheric if refrigerated) Evaporates. . Portions of cloud could be flammable or explosive under certain conditions. narcosis. forms flammable pool.Comparison of Properties of Liquid Fuels Toxic Carcinogenic Flammable Vapor Form Vapor Clouds Asphyxiant Extreme Cold Temperature Other health hazards No No Yes Yes LNG Liquefied Petroleum Gas (LPG) No No Yes Yes Yes. Behavior if spilled Evaporates..1-9. if refrigerated None Yes Yes Yes Yes No No Gasoline Fuel Oil Yes Yes Yes No No No Same as gasoline 140 400 N/A Atmospheric Yes. PTL: LNG Facilities . Outtrim. but in a vapor cloud Yes None Eye irritant. others..The Real Risk. Same as gasoline Source: Lewis. Patricia A.
LNG Production • Exploration • Liquefaction • Transportation • Regasification and Storage .
USA join Japan as importers GROWTH • 1996 – Qatar starts production • 1999 . Malaysia. Indonesia. Taiwan.Brief History of LNG EMERGENCE • 1941 – First commercial LNG production • 1964 – Algeria first commercial LNG export facility • Spawned all US receiving terminals and several European counterparts • 1969 – Kenai USA starts supply to Japan • 1970 – Libya starts supply to Italy DEVELOPMENT • 1972-1990 – Development of Far Eastern LNG trade • Brunei. .Trinidad starts production • 2000 – Nigeria starts production British Gas Canvey Island LNG Terminal A World First Import Terminal © 2005 by Institute for Energy. Law & Enterprise. University of Houston Law Center. Abu Dhabi. Australia start production • Korea.
General LNG Production Process LNG Gas Treatment Pipeline Feed Gas Refrigerant Compression -259 F Ships Heat Exchangers • Pentanes and heavier • Condensates • Impurities -Carbon Dioxide -Mercury -Hydrogen Sulfide -Water -Nitrogen LNG Storage Heat expelled to water or air Source: Cheniere .
Liquefaction • Contaminants are removed to avoid damaging equipments • Purify Natural Gas • Cooling to -260F .
Typical LNG Tanker Holding tanks .
LNG Supply Chain .
Cross-Section of a Modern LNG Tank .
Transportation of Natural Gas Pipelines vs Liquefied Natural Gas (LNG) • Pipelines are convenient and economical for onshore transport of natural gas • Offshore. 2003) . (BP Statistical Review. • 25% of the trade movement of natural gas in 2002 was as LNG. as the water depth and distance increase pipeline transport of gas becomes difficult. • LNG is liquid at –260 oF and atmospheric presure. • LNG for offshore transport of gas. transported in specially designed ships.
Typical cost components for LNG project Unloading 11% Liquef action 50% Shipping 39% .
Supply and Demand • Globally. receiving capacity exceeds liquefaction capacity by almost 3 to 1 • Japan’s receiving capacity alone exceeds total world liquefaction capacity • Since much global LNG is spot traded. it moves where the prices are highest .
40 fatalities • Cove point loss. one fatality • Algerian loss. Over 80. 2004. 1979. 1944. .000 voyages. 128 fatalities • Staten Island loss.Safety • Cleveland loss. No LNG related fatalities. 27 fatalities • In the 50 year history of LNG marine shipping. there has never been a significant loss. 1973.
Safety • Eight minor spills of LNG during ship loading or unloading. and no large scale spill testing has been done. so what do we do? . • Significant variation in modeling output. spills must be modeled. no fires • Minor cryogenic cold fracture damage • Since a large spill has never occurred.
.000 7% per year growth (1992-2002) bcf Pipeline 74% 3.000 2.000 4. BP Statistical Review of World Energy June 2003 LNG is about 6% of worldwide natural gas consumption and about 94% of natural gas consumption in Japan.000 1.000 LNG 26% Growth in LNG Demand 5.Why LNG Now? Growing Global LNG Demand Natural Gas Trade Movement 2002 6.000 1970 Japan Italy 1980 1990 South Korea Belgium 1992 Taiwan Turkey 1994 1996 France Greece 1998 Spain Portugal 2000 USA UK 2002 Source: BP Statistical Review of World Energy June 2003 Source: Cedigaz.
Most of the increase in LNG trade would be in the Atlantic basin. Global LNG IMPORTERS Year 2002 Pacific Basin South Korea 16% Taiwan 5% Atlantic Basin France 8% Other 31% Spain 8% USA 5% Italy 4% Belgium 2% Greece 0% Turkey 4% • Japan 48% Portugal 0% Source: World Energy Investment Outlook. 2003. 24 of the terminals are in Japan. Nov. IEA.Global LNG Imports by Basin • • • In 2002 there are 43 terminals with a capacity of over 280 million tonnes. which will overtake the pacific basin in volume. Importing countries will need to add almost 660 million tonnes of new regasification capacity. Inter-regional LNG trade is expected to increase six fold over the next 30 years. .
Global LNG Imports Japan 24 23 Importing Country Existing Planned .
LNG Liquefaction Facilities The LNG industry could be poised for dramatic growth Global LNG Supply Existing Under Construction Proposed • LNG supply growing • Multiple LNG supply proposals announced • Long term LNG supply outlook robust Source: Cedigaz. NPC 40 .
9 4.1 8.7 4. in some cases in joint ventures with major oil and gas producers 0 Sonatract Pertamina Petronas Shell Qatar Petroleum Mitsibushi Exxonmobil Japan Indonesia LNG Company (JILCO) Total Abu Dhabi National Oil Company (ADNOC) Brunei Government Omani State Nigeria National Petroleum Company BP Nippon Oil Corporation (NOC) Vico Mitsui Unocal BHP Liquefaction Capacity 5 10 15 20 17.2 2.6 4.LNG Liquefaction Facilities More than 60% of the equity is owned by state companies.0 2.4 3.0 1.0 2.8 3.6 2.0 10.4 3.0 9.7 4.0 3.4 Oil Companies 23% mpta 25 23.4 3.3 Others 16% State Owned 61% Source EIA .
000 Middle East New Markets Venezuela Angola Europe Bcf/yr 4.000 1.000 7.000 Egypt Trinidad 2.000 6.Atlantic Basin LNG Supply and Demand 8.000 Nigeria 0 Supply (2001) Demand (2001) Supply (2010) United States Demand (2010) Algeria Source: Pace Global Energy Services .000 3.000 5.
1 1 0.8 2000's Sources: El Paso .5 0.50/MMBtu depending largely on shipping cost. LNG COSTS ARE DECLINING Does not include feedstock prices $/MMBTU 2.How Much Does LNG Cost? LNG costs are declining.1 0. as LNG in a price range of about $2.5 2 1.5 0.5 2. Natural gas can be economically produced and delivered to the U.5 0 1980's Liquefaction Shipping Regasification and Storage 1.S.50 $3.
LNG Project Costs Will Continue Dropping 800 700 $/tonne of capacity 600 500 400 300 200 100 0 mid 1990 2002 Liquefaction Shipping Shipping 2010 2030 Source : IEA Regasification and Storage .
’s Future with a Developing Field . Exploring Energy. Liquefied Natural Gas. Inc. 2004 .Current LNG Cost Competitiveness Source: Marcy Darsey et al. UH Law Center.
Liquefaction Costs Transformed $ per tonne of capacity 700 600 500 400 300 200 100 0 1990 1995 Source: BP 1999 Trinidad 00 Future LNG .
Major Natural Gas Trade Movements BP Statistical Review of World Energy 2004 .
New Trade Routes Are Emerging Existing Trade Prospective Trade .
K. 2003.. Washington D.. LNG Trade & Source: Iwata. Makoto.S. BP Ltd. Lines.LNG Spot Cargo . LNG Ministerial Summit. Mitsui O. Transport.Volume 8 7 MTPA 6 5 4 3 2 1 0 '95 '96 '97 '98 '99 '00 '01 '02 '03 Volume of LNG Spot Cargo Spot Trading is increasing rapidly 5 fold increase from 1998 Sources : Clarkson Research Studies. LNG Transportation. 2003 .C.
25 4.55 2.10 3.98 3500 4.Comparison of gas prices Distance LNG CNG (Case I) CNG (Case II) miles $/MMBTU $/MMBTU $/MMBTU 500 3.90 1500 3.72 1000 3.0 106 ft3 Price of gas: $0.82-2.75 3. .06-3.95 3.84 2.50-3.37 3.62 2500 3.98-4.70-5.74-2.11-3.26 2000 3.43 3.84-5.43 Case I: Transported Volume = 3.5 106 ft3 Case II: Transported Volume = 5.72 2.30-3.65 2.08-4.4/MMBTU Usage of water-cooled compressor raises the unit price of the gas by 0. Liquefaction: $1. Regasification: $0.90 3.49 4.0MMBTU.01/MMBTU.65 4.75/MMBTU.85 3.34 5000 4.44-3.15-3.
Gas-To-Liquid 51 .
jet fuel. kerosene.GTL • GTL (Gas-to-liquids) technology converts natural gas into hydrocarbon liquids.naphtha and diesel . • Impetus for the GTL technology: Clean fuel obtained as product and easy transportation • Main products: Middle distillates like gasoline.
. Alaska pipeline) Source: Economides.J.Reasons for GTL attraction • • • • Monetizing stranded natural gas Salvaging associated gas Meeting environmental specifications Maintaining pipeline productivity (e. – University of Houston . M.g.
GTL Technology .
nitrogen and complex cyclic hydrocarbons resulting in almost no emissions of sulfur dioxide.Gas to Liquids • The Fischer-Tropsch synthesis (F-T synthesis) is one of the most important technologies for GTL. • For 100 barrels of liquids 1 MMscf of gas is needed . • A main advantage of the F-T products is the absence of sulphur. nitrous oxides and unburned hydrocarbons.
CH4 + H2O → CO + 3 H2 This is the most used method to convert methane into syngas (widely used to produce ammonia-based fertilizers).STAGE 1 Two processes may be used to convert methane into syngas: Natural gas autothermal reforming (ATR). Methane may be converted into syngas via a reaction with water (steam) and oxygen O2 : 2CH4 + O2 + H2O → 5H2 + 2CO OR with water (steam) and carbon dioxide CO2: 2CH4 + O2 + CO2 → 3H2 + 3CO + H2O Both of these reactions are exothermic (they produce heat). It requires a high temperature (700-1000 OC) and occurs in presence of a Nickel based catalyst. Methane may also be converted into syngas using only water. . Steam methane reforming (SMR). and the temperature of the syngas produced is around 1000 OC.
STAGE 2 The syngas ('synthetic gas') obtained in the previous step contains contaminants. scrubbers. Carbon dioxide CO2 and Sulfur compounds are removed with a process called 'Gas sweetening' or Acid Gas removal. fabric filters. . which must be removed: Solid particles are removed with cyclones.
Various solvents may be used.The process : The idea is to flow the gas stream through a liquid solvent.is 'regenerated' by heating or cooling it down: the solvent releases the contaminants. Hence the name 'Amine gas treating' that can also be used for this process. . in which the contaminants will be absorbed. The most commonly used in this process are: •MDEA (Methyldiethanolamine) •DEA (Diethanolamine) •MEA (Monoethanolamine) These solvents are commonly named amines. Then these contaminants can be processed appropriately. Then this solvent .loaded with contaminants .
The clean syngas is liquefied in a Fischer Tropsch reactor. . The clean syngas is then introduced in a reactor in which it undergoes a reaction in presence of a catalyst (Cobalt based). The Hydrogen and the Carbon monoxide from the syngas react to form hydrocarbon chains. This reaction is explained further in some details. The type of hydrocarbons produced depends mostly on the catalyst used and the temperature of the reaction.
facilitated by a catalyst (usually Iron or Cobalt).The Fischer Tropsch (FT) process is a chemical reaction between Carbon Monoxide CO and Hydrogen H2. solid residues from refineries etc.5 millions barrels of synthetic fuels.. Oil shales. which allowed Germany to wage a war without holding significant 'natural' oil reserves on its territory.). natural gas. Biomass. and throughout the 2nd World War permitted to produce 6. . The mix of CO and H2 used in this reaction is called syngas and can be produced in various way.. The FT process was developed in Germany in the 1920s by Franz Fischer and Hans Tropsch at the Kaiser Wilhelm Institute in Berlin (Today Max Planck Institute). It was first used on a commercial scale in 1936. using various organic materials (coal. and which produces hydrocarbons (their type depends on the catalyst used and the conditions at which the reaction occurs).
GTL projects: the birth of an industry World GTL Trinidad 4kbpd Tinrhert Algeria 35kbpd Heritage Plants Shell Bintulu PetroSA Mossgas BP “Colombia Condor” ~35kbpd SasolChevron Nigeria 35kbpd Sasol “Oryx” 35kbpd (70kd/d train 2) Shell “Pearl” 140kbpd (Nov. 2003) ExxonMobil “AGC 21” 160kbpd (July. 2004) ConocoPhillips SasolChevron Marathon/Syntroleum POSTPONED .
GTL Cost Trends „000$/tonne Installed Capacity 100 80 60 40 20 0 Actual Estimated Mossgas 1991 Bintulu 1993 Oryx 2006 Escravos 2009 Pearl 2010 • Relatively few commercial-scale projects to date • Significant scope. scale and location-specific differences • Estimates based on published data .
LNG and GTL comparison: boundary conditions GTL Plant Shell .
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