NATURAL GAS

INDUSTRY
EXPENSES AND MARKETS

LAYTH ABDULMALIK JAMEEL

GAS EXTRACTION
In general :
Extraction costs of gas and oil are roughly identical
Down-hole equipment is the same
Most wells produce both liquids and gas
DRY GAS WELLS
dry gas wells are more expensive as they tend to be deeper,
hotter, and higher pressure than oil wells
which means
higher-pressure surface equipment
Temperatures must be handled
more processing equipment to prepare the gas
AT THE SURFACE
after the fluids reach the surface things are different
Gas is transported to a gas-treating facility to remove
contaminants and stabilize it
Compressors are installed to help push/pull the gas
throughout the gathering system
TRANSPORTATION
Natural gas can be transported on land (pipelines) or on
water (ships).
Natural gas must be highly pressurized to move along the
pipeline
compressor stations are placed in intervals along the
pipeline
liquefied to transported by ship (takes less volume)
TRANSPORTATION
transportation is a critical part of the natural gas industry
As natural gas is predominantly methane, Leaks are a major
issue
Methane is highly flammable, and could cause accidents and
explosions
leaks could be a contributor to climate change
health problem if it is near communities, and close to water
aquifers
GAS MARKET
Oil is sold by volume, typically barrels.
natural gas is sold by unit of energy
A large majority of crude oil is bought and sold directly or
indirectly through highly liquid global markets
In contrast, because natural gas is difficult to transport,
natural gas prices tend to be set locally or regionally
GAS PRICES
Gas prices are a function of:
→ Market price of gas, determined by supply, demand, and
price of other fuels, such as coal or oil
→ Terms of the sales contracts
→ The relative distance of the customer to the producing
field
→ Terms of the transportation agreements
→ Host government fiscal term
GAS PRICES
GAS PRICES
Gas is less valuable than oil
Most oil-derived products are liquids at room temperature,
meaning they can be stored in unpressurized tanks
Pumping, storing, and metering liquids is easy
Natural gas is used for stationary applications like heating
and electricity production
ENVIRONMENTAL
IMPACTS

the global warming emissions from gas combustion are

much lower than those from oil
Cleaner burning than other fossil fuels
50 to 60 percent less carbon dioxide (CO2)
15 to 20 percent less heat-trapping gases than gasoline when
used in vehicles