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Published:October 25, 2017 4:51 PM
Introduction Hydrate is a crystalline solid which contains natural gas (mostly methane) molecule surrounded by a cage of interlocking molecules. Methane Hydrates occur naturally in subsurface deposits where temperature and pressure conditions are favorable for its formation. Four Earth Environments have the favourable temperature and pressure conditions for the formation of hydrates. These are: 1)sediment and sedimentary rock units below Arctic permafrost 2)sedimentary deposits along continental margins 3)deep-water sediments of inland lakes and seas 4)under Antarctic ice Potential Reserve Potential reserve of gas in hydrate deposits is 15,000 TCM distributed on land and offshore, some estimates suggest it as high as 20,000 TCM as well. To put things in perspective the total conventional natural gas reserve is 186.6 TCM (BP Stats 2017). In November 2008, US estimated 85.4 Tcf of Natural Gas Hydrates in Alaska. The 1995 U.S Geological Survey estimated 11 Gas Hydrate plays in 48 States and Alaska, in which 3,200 TCM was estimated to be in place with 0.95 probability. With exception to Antarctic deposits, the hydrates accumulations are within few hundred meters of sediment surface. Hydrates have been identified under Arctic Region Permafrost like in North Slope Alaska. On Continental shelf like KG Basin India, and in inland lakes like Lake Baikal (Russia) and in Caspian Sea. Proposed Production Methods Proposed methods of gas recovery from hydrate usually deal with dissociating or “melting” in-situ gas hydrate by: (1)Heating the reservoir beyond hydrate formation temperatures, (2)Decreasing the reservoir pressure below hydrate equilibrium, or (3)Injecting an inhibitor, such as methanol or glycol, into the reservoir to change hydrate stability conditions. When Messoyakha Gas Field (Russia) in 1971 showed deviations from the expected pressures, it was later found out that 36 percent (about 5 BCM) of gas was liberated from hydrates which got depressurised. Mallik production testing in 2002 proved for the first time that hydrates can be produced through conventional technology. Existing Projects 1.Japan •2012/13: Collaboration on both Arctic and Marine projects. •2013: One-week marine production test. •2014/15: “Extended” marine production test. •New Japan Sea project. •2017: Agency of Natural Gas and Energy dissolved methane hydrate and confirmed production. 2. Korea •2007 & 2010: UBGH-1 & UBGH-2 expeditions. •2015: Marine production test. 3. China • 2007 & 2013: GMGS-1 & GMGS-2 expeditions. • 2007 through 2011: Onshore “tests”. • 2017: China Geological Survey started production from test field in Shenhu area in South China Sea. 4. Norway (Statoil) • Onshore long-duration production test. • Gas hydrate global screening. 5. Canada •Onshore Mallik Project 1998, 2002, 2007-2008. •Beaufort Shelf hazard and climate research – Pacific and Atlantic marine gas hydrate studies. 6. New Zealand •Gas hydrates on the Hikurangi Margin, GNS, Univ. of Auckland. •Energy focus, marine surveys, drilling. 7. Germany •SUGAR Energy Assessment Project, BGR plus others. •GEOMAR marine gas hydrate research, marine surveys. •MARUM MeBo (sea floor drill rig) drilling research. 8. Taiwan •Marine gas hydrate research, marine surveys. •Central Geologic Survey and the National Taiwan University. •Energy focus, marine surveys, drilling. Financial feasibility Japan is world’s largest LNG Importer. It wants to reduce its import thus Japan’s Methane Hydrate R&D program was started with the objective of developing methane hydrate technologies and transfer them to private oil entities. The Alpha 1 project was studied and developed in 3 phases. The characteristics of field and economic evaluation obtained by using simulator are mentioned below (MH21 Research Consortium) - In the LNG oversupply market,the spot LNG is costing $5-$6/Mmbtu. The price of gas in India is $4.2/MmBtu for Administered Price Mechanism and gas sealing is set at $5.56/MmBtu for Non-Administered Price Mechanism (Offshore) subjected to review every 6 months. In this scenario, the cost of production of $11.66/MmBtu is not feasible. If right sensitivity analysis is carried out taking into consideration the increasing infrastructure costs, the production costs vary from $0.42-$1.59/cu m which translates to $11.66-$45.02/MmBtu. At this price, natural gas can be easily substituted by fuel oil, Naptha and LPG as well. Such prices are impractical when shale gas has sub $3 break-even. In May 2017, China successfully extracted hydrates and is producing 16,000 cubic ft/day. But the various research notes suggest that the commercial production is unlikely due to environmental concerns and technological barriers. Indian Scenario India’s Natural Gas Hydrate Program (NGHP) was started in 1997.India started NGHP Expedition 02 in 2015, under which the United State Geological Survey Department (USGS) jointly with Japanese Government and ONGC discovered highly enriched accumulations of Natural Gas Hydrate deposits in Bay of Bengal in July 2016. The deposits are located in coarse grained sand rich depositional systems in the Krishna-Godavri Basin. Studies have shown that gas hydrates in sand deposits can be produced with existing technology; however there are still technical and economic barriers to overcome before commercial production. India’s Natural gas reserve potential in hydrate is 26,000 BCM while its consumption is 50.1 BCM annually. India produced 27.6 BCM of Natural gas in 2016, the production is declining by 6 percent per annum. India is currently 4th largest importer of LNG and its cross- border pipeline projects like TAPI have constantly been delaying due to regional geopolitics. India is ambitiously increasing its dependence on gas by promoting City Gas Distribution. Bringing the natural gas locked in hydrates will not only make India self-sufficient; will also make it an exporter of Natural gas. But as discussed before the financial viability of hydrates is questionable due to cheaper substitutes and low-price scenario. Challenges Methane hydrates are sensitives sediments, they rapidly dissociate into methane and water due to increase in temperature or decrease in pressure.This dissociation produces free methane and water. The conversion of a solid sediment into liquids and gases will create a loss of support and shear strength. These can cause submarine slumping, landslides, or subsidence that can damage production equipment and pipelines. Controlling this dissociation is a technical challenge. Out of all the methods of hydrate production; the most economical being depressurization are still yielding production costs twice as market costs. The economic viability of hydrates is questionable until any major technological break through happens. InfralineEnergy Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the InfralineEnergy (Technologies India Pvt. Ltd.). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.
Introduction
Hydrate is a crystalline solid which contains natural gas (mostly methane) molecule surrounded by a cage of interlocking molecules. Methane Hydrates occur naturally in subsurface deposits where temperature and pressure conditions are favorable for its formation.
Four Earth Environments have the favourable temperature and pressure conditions for the formation of hydrates. These are:
1)sediment and sedimentary rock units below Arctic permafrost
2)sedimentary deposits along continental margins
3)deep-water sediments of inland lakes and seas
4)under Antarctic ice
Potential Reserve
Potential reserve of gas in hydrate deposits is 15,000 TCM distributed on land and offshore, some estimates suggest it as high as 20,000 TCM as well. To put things in perspective the total conventional natural gas reserve is 186.6 TCM (BP Stats 2017). In November 2008, US estimated 85.4 Tcf of Natural Gas Hydrates in Alaska. The 1995 U.S Geological Survey estimated 11 Gas Hydrate plays in 48 States and Alaska, in which 3,200 TCM was estimated to be in place with 0.95 probability.
With exception to Antarctic deposits, the hydrates accumulations are within few hundred meters of sediment surface. Hydrates have been identified under Arctic Region Permafrost like in North Slope Alaska. On Continental shelf like KG Basin India, and in inland lakes like Lake Baikal (Russia) and in Caspian Sea.
Proposed Production Methods
Proposed methods of gas recovery from hydrate usually deal with dissociating or “melting” in-situ gas hydrate by:
(1)Heating the reservoir beyond hydrate formation temperatures,
(2)Decreasing the reservoir pressure below hydrate equilibrium, or
(3)Injecting an inhibitor, such as methanol or glycol, into the reservoir to change hydrate stability conditions.
When Messoyakha Gas Field (Russia) in 1971 showed deviations from the expected pressures, it was later found out that 36 percent (about 5 BCM) of gas was liberated from hydrates which got depressurised. Mallik production testing in 2002 proved for the first time that hydrates can be produced through conventional technology.
Existing Projects
1.Japan
•2012/13: Collaboration on both Arctic and Marine projects.
•2013: One-week marine production test.
•2014/15: “Extended” marine production test.
•New Japan Sea project.
•2017: Agency of Natural Gas and Energy dissolved methane hydrate and confirmed production.
2. Korea
•2007 & 2010: UBGH-1 & UBGH-2 expeditions.
•2015: Marine production test.
3. China
• 2007 & 2013: GMGS-1 & GMGS-2 expeditions.
• 2007 through 2011: Onshore “tests”.
• 2017: China Geological Survey started production from test field in Shenhu area in South China Sea.
4. Norway (Statoil)
• Onshore long-duration production test.
• Gas hydrate global screening.
5. Canada
•Onshore Mallik Project 1998, 2002, 2007-2008.
•Beaufort Shelf hazard and climate research – Pacific and Atlantic marine gas hydrate studies.
6. New Zealand
•Gas hydrates on the Hikurangi Margin, GNS, Univ. of Auckland.
•Energy focus, marine surveys, drilling.
7. Germany
•SUGAR Energy Assessment Project, BGR plus others.
•GEOMAR marine gas hydrate research, marine surveys.
•MARUM MeBo (sea floor drill rig) drilling research.
8. Taiwan
•Marine gas hydrate research, marine surveys.
•Central Geologic Survey and the National Taiwan University.
Financial feasibility
Japan is world’s largest LNG Importer. It wants to reduce its import thus Japan’s Methane Hydrate R&D program was started with the objective of developing methane hydrate technologies and transfer them to private oil entities. The Alpha 1 project was studied and developed in 3 phases. The characteristics of field and economic evaluation obtained by using simulator are mentioned below (MH21 Research Consortium) -
In the LNG oversupply market,the spot LNG is costing $5-$6/Mmbtu. The price of gas in India is $4.2/MmBtu for Administered Price Mechanism and gas sealing is set at $5.56/MmBtu for Non-Administered Price Mechanism (Offshore) subjected to review every 6 months. In this scenario, the cost of production of $11.66/MmBtu is not feasible. If right sensitivity analysis is carried out taking into consideration the increasing infrastructure costs, the production costs vary from $0.42-$1.59/cu m which translates to $11.66-$45.02/MmBtu. At this price, natural gas can be easily substituted by fuel oil, Naptha and LPG as well. Such prices are impractical when shale gas has sub $3 break-even.
In May 2017, China successfully extracted hydrates and is producing 16,000 cubic ft/day. But the various research notes suggest that the commercial production is unlikely due to environmental concerns and technological barriers.
Indian Scenario
India’s Natural Gas Hydrate Program (NGHP) was started in 1997.India started NGHP Expedition 02 in 2015, under which the United State Geological Survey Department (USGS) jointly with Japanese Government and ONGC discovered highly enriched accumulations of Natural Gas Hydrate deposits in Bay of Bengal in July 2016. The deposits are located in coarse grained sand rich depositional systems in the Krishna-Godavri Basin. Studies have shown that gas hydrates in sand deposits can be produced with existing technology; however there are still technical and economic barriers to overcome before commercial production.
India’s Natural gas reserve potential in hydrate is 26,000 BCM while its consumption is 50.1 BCM annually. India produced 27.6 BCM of Natural gas in 2016, the production is declining by 6 percent per annum. India is currently 4th largest importer of LNG and its cross- border pipeline projects like TAPI have constantly been delaying due to regional geopolitics. India is ambitiously increasing its dependence on gas by promoting City Gas Distribution. Bringing the natural gas locked in hydrates will not only make India self-sufficient; will also make it an exporter of Natural gas. But as discussed before the financial viability of hydrates is questionable due to cheaper substitutes and low-price scenario.
Challenges
Methane hydrates are sensitives sediments, they rapidly dissociate into methane and water due to increase in temperature or decrease in pressure.This dissociation produces free methane and water. The conversion of a solid sediment into liquids and gases will create a loss of support and shear strength. These can cause submarine slumping, landslides, or subsidence that can damage production equipment and pipelines. Controlling this dissociation is a technical challenge.
Out of all the methods of hydrate production; the most economical being depressurization are still yielding production costs twice as market costs. The economic viability of hydrates is questionable until any major technological break through happens.
InfralineEnergy Disclaimer:
The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the InfralineEnergy (Technologies India Pvt. Ltd.). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.
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