What's new in production

	Vol. 230 No. 9
DAVID MICHAEL COHEN, MANAGING EDITOR

Emerging technologies for un-stranding gas reserves

Marine CNG and other alternatives have advantages over LNG for niche markets that are isolated from energy infrastructure, but for various reasons have languished behind established LNG transport technologies for years. Liquefying natural gas, storing it as a cryogenic liquid over long distances and then regasifying are expensive and technologically complicated processes requiring high-Capex infrastructure that makes it uneconomic except for very large stranded gas reserves and long transport distances. In contrast, CNG does not need expensive terminals, is technically simple, and has flexibility in loading and unloading options.

The biggest technical challenge to CNG transport is storing the gas safely under high pressure, a demand that is easily met by pipeline geometries but not with tanks. Sea NG Corporation’s CNG transport vessels accomplish this feat using the company’s patented Coselle containment system. Each Coselle consists of about 10 miles of high-strength, 6-in. line pipe that has been coiled into a reel-like carousel support structure, with capacity to store about 3.3 MMcf of gas at a pressure of about 3,200 psig, near ambient temperature. Coselles are stacked within the ship’s hold in different configurations for a series of ship designs offering capacities between 50 and 500 MMcf per ship. The American Bureau of Shipping (ABS) approved the Sea NG ship design for construction in September 2006, and the company inaugurated its Gunsan, South Korea, fabrication site for the containment system in July 2008.

Alternatives to LNG for monetizing stranded gas reserves got a boost on June 26, when Medcarrier SAE announced its selection of Sea NG’s proprietary vessels to transport CNG to the island of Crete. The announcement came one week after Greece’s biggest electric company approved a memorandum of understanding with Medgas SA—Medcarrier’s marketing partner in the project—to further evaluate marine CNG for long-term supply of existing and new electrical generation in Crete.

It is important to note that this agreement represents only the first step toward a possible CNG contract, and other CNG projects have fallen through after reaching much more advanced stages of planning. Nevertheless, there is reason to be optimistic about the current project. Transport from Egypt to Crete is an ideal test case for marine CNG. They are separated by only a few hundred miles, but also by deep water that makes small-volume pipelines non-commercial. Crete has no existing gas infrastructure—it imports liquid fuels for the vast majority of its electricity production—and represents too little energy demand for LNG.

Another marine CNG transport design is the Votrans technology developed by EnerSea Transport LLC. Instead of coiling line pipe, this containment system uses straight large-diameter pipe segments manifolded together into scalable cargo containers. The system generated a lot of excitement when first introduced in 2001, and extensive prototype testing in 2004 and 2005 proved the concept. Since then, the Votrans technology has been considered for several CNG projects, a few of which advanced to the Front-End Engineering and Design (FEED) stage, but, like Sea NG, EnerSea has yet to receive a contract.

Paul Britton, the company’s managing director, attributes the difficulty of commercializing CNG transport largely to the late-2008 collapse of oil prices, which eliminated the price advantage of natural gas over liquid fuels for markets that were considering CNG. Now that oil prices have rebounded while natural gas prices remain at record lows, Britton sees new opportunities for CNG to step into those markets. Currently, he says, EnerSea has about a dozen projects in various stages of planning ranging up to pre-FEED.

Compressed gas liquids. CNG isn’t the only technology poised to grab the stranded gas reserves left behind by LNG; another contender is SeaOne Maritime Corp.’s LNG Lite concept. LNG Lite claims two economic advantages over conventional LNG. First, the system transports the full gas wellstream to market, whereas conventional LNG business models strip out, liquefy and ship only the methane, necessitating a second supply chain (either pipeline or liquefied petroleum gas carrier) to monetize the remaining heavier ends. Second, LNG Lite moderates the costliest and most energy-intensive parts of LNG infrastructure: the liquefaction and regasification terminals.

The concept uses a patented Compressed Gas Liquids (CGL) technology, in which a hydrocarbon solvent added to the natural gas stream causes the gas to liquefy when subjected to a temperature of –40°C and a pressure of 1,400 psi—requiring much less energy than conventional LNG liquefaction. This first phase is accomplished on a loading barge moored at an offshore wellhead.

The conditioned natural gas stream is then piped aboard the CGL carrier in liquid form and stored in a bundled pipeline containment system similar to those used for CNG transport. The carrier design has 102 miles of 42-in. pipe, allowing transport of up to 1.5 Bcf of gas. To deliver its cargo, the CGL carrier offloads to a transmission barge, which simply expands and separates the gases.

In addition to the small to medium-sized gas fields targeted by CNG, LNG Lite could be a development option for associated gas and natural gas liquids from large offshore oil fields. ABS awarded Approval-In-Principle to SeaOne’s concept marine vessel in 2007, but, as with the two CNG transport concepts, no projects using the concept have been announced yet.

It is yet to be seen whether the resurgence of oil prices finally paves the way for these technologies to monetize the world’s stranded gas reserves. While a high price differential of oil to gas is supportive of such projects, there is a danger that record low gas prices could make the targeted reserves uneconomic to produce. However, other factors such as the upcoming global climate change conference in Copenhagen this December may give a boost to worldwide natural gas demand (and hence prices) relative to oil, which could tip the scales in favor of these technologies.

One thing is for sure: With about 2,000 Tcf of stranded gas reserves on the planet, we need better ways to develop that resource.