Stranded Gas

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Presentation I made to Nigerian Society of Chemical Engineers - 2008 Annual AGM & Conference

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Stranded Gas

  1. 1. Stranded Gas Resource Development: Challenges, Opportunities AkaChidike Kanu
  2. 2. Gas Province <ul><li>~185 Tcf proven reserves </li></ul><ul><li>Enviable sweet gas resource base </li></ul><ul><li>Unenviable resource flaring records </li></ul><ul><li>Fast growing export market </li></ul><ul><li>Comatose domestic gas market </li></ul><ul><li>Domestic supply security issues </li></ul><ul><li>Strategy in place – the Gas Master Plan </li></ul>
  3. 3. Econometrics <ul><li>~40% of total reserves not available in the near-term (i.e considered stranded) </li></ul><ul><li>Gas available in the near-term mainly NAG </li></ul><ul><li>Short-term availability < Short term demand </li></ul>
  4. 4. Define Stranded Gas <ul><li>Uneconomic for monetization </li></ul><ul><li>Small volume reserves </li></ul><ul><li>Gas caps </li></ul><ul><li>Remote reserves </li></ul><ul><li>AG reserves </li></ul><ul><li>Impacts on macroeconomics </li></ul>
  5. 5. Stranded gas <ul><li>This Paper: </li></ul><ul><ul><li>Reviews techs & economic issues </li></ul></ul><ul><ul><li>Highlights opportunities & </li></ul></ul><ul><ul><li>Strategic focus items </li></ul></ul>
  6. 6. Challenges <ul><li>Relatively low VIR i.e. uncompetitive </li></ul><ul><li>Hi risk, lo return opportunity! </li></ul>Development economics & investment decision novel tech, downstream Risks bundled, disincentive Fiscal terms Market factors / demand Gas price Access, gathering, ops surveillance & intervention CAPEX, OPEX RSG Factor
  7. 7. Tech Concepts <ul><li>Distance - a main factor of concept selection </li></ul><ul><li>Pipeline: principal near-market solution </li></ul><ul><li>LNG: principal distant-market solution </li></ul><ul><li>Recycling: alternative to flaring </li></ul>
  8. 8. Concepts / Opportunities <ul><li>P/L: large volumes over shorter distances </li></ul><ul><li>LNG: large volumes for longer distances </li></ul><ul><li>Challenges with major tech solutions </li></ul>
  9. 9. Concepts/ Opportunities <ul><li>Tailored Concepts: </li></ul><ul><li>CNG </li></ul><ul><ul><li>smaller gas volumes, shorter distances </li></ul></ul><ul><ul><li>lo energy density, special carriers, unproven. </li></ul></ul><ul><li>Methanol </li></ul><ul><ul><li>wide prod value-chain, fits existing infrastructures </li></ul></ul><ul><ul><li>metOH market/utility is still limited </li></ul></ul>
  10. 10. Concepts/ Opportunities <ul><li>FLNG </li></ul><ul><ul><li>smaller units, cheaper concepts, </li></ul></ul><ul><ul><li>unproven, operational concerns. </li></ul></ul><ul><li>GTL (Diesel, synfuels, naphtha) </li></ul><ul><ul><li>cleaner fuels, wide product range, </li></ul></ul><ul><ul><li>hi capex, O 2 extraction, catalysis </li></ul></ul><ul><li>GTW </li></ul><ul><ul><li>direct to electricity & transmission </li></ul></ul><ul><ul><li>unproven </li></ul></ul>
  11. 11. Strategic Focus Items <ul><li>Gas flaring </li></ul><ul><ul><li>Strict regulations are imperative </li></ul></ul><ul><ul><li>Consider gas recycling/injection options </li></ul></ul><ul><li>R&D </li></ul><ul><ul><li>need in-country collaborative R&D </li></ul></ul><ul><ul><li>modeling and optimisation of value mix, etc. </li></ul></ul><ul><ul><li>resolve government versus investor goals </li></ul></ul><ul><ul><li>Good examples from Norway and Trinidad & Tobago </li></ul></ul>
  12. 12. Strategic Focus <ul><li>Policy </li></ul><ul><ul><li>guidelines for new techs: FLNG, GTW, etc. </li></ul></ul><ul><ul><li>remove uncertainty/ambiguity road blocks </li></ul></ul><ul><ul><li>encourage domestic market development </li></ul></ul><ul><ul><li>encourage competitive fiscal regimes </li></ul></ul><ul><ul><li>focus on local capacity building for gas tech </li></ul></ul>
  13. 13. Thank You! Questions? [email_address]

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