AbstractThis work studies the commercial feasibility of producing natural gas from Ng hydrates in the peninsula region of Kamchatka, Russia and selling it to markets in either China or Japan. A production model was constructed to determine the logistics of surface equipment placement. In addition, the difference in prices between transporting the produced natural gas via pipeline and tanker ship were compared. Preliminary calculations compare the commercial viability of constructing an LNG plant on the western coast of Kamchatka to selling gas to China via pipeline.

Economical Potential of Stranded Natural Gas Hydrates*John Hudson**, Elizabeth Wyant**, Liu Shi and Miguel J. Bagajewicz

University of Oklahoma ― Chemical Engineering*This work was done as part of the capstone Chemical Engineering class at the University of Oklahoma

**Capstone undergraduate students

Kamchatka Peninsula, Russia

Reservoir pressure model

• Wiggins and Shah (OU) model (2001)• Based on continuity equation and Darcy flow. • Uses dissociation kinetics.• Consider pressure drop in porous hydrate free rock

Reservoir Pressure Dissociation

Pressure

Flow Properties

Distance from well

0 20000 40000 60000 80000 100000 120000 140000 160000 1800000

50100150200250300350400450500550600650700750

25,000 SCMD (0.1 to 20 years)

Radius, m

Pres

sure

, psi

Figure 1: Reservoir pressure profile for maximum flow rate before choke conditions occur.

Figure 2: Natural gas flow rate trend through the pipe to the surface for varying diameters. The figure confirms that the reservoir is controlling the flow

1 2 3 4 5 6 7 8 9 10 11 120.0

1,000,000,000.0

2,000,000,000.0

3,000,000,000.0

4,000,000,000.0

5,000,000,000.0

6,000,000,000.0

7,000,000,000.0

8,000,000,000.0

9,000,000,000.0

10,000,000,000.0

Maximum Flow Rate in Piping

Diameter, in

Flow

Rat

e, m

3/d

Figure 3: Difference in price for LNG equipment for varying selling rates.

Table 1: Schedule of operations

Tasks 1 2 3 4 5 6 7 8 9 10 11-30

Have Logistic for both the LNG/ Pipeline started                      

Seismic: 5 person team (6-8 weeks) $54                    

Order Materials for Pipeline/LNG facility                      

Find crew and begin measures to house and feed them                      

Ship Intial Equipment: Build Pad 1                    

Drill 1st Well, perform core analysis, and other analysis                    

Cap well until Pipeline/LNGbuilding is completed                      

Build Pipeline/LNG: will take 3 - 6 years (Assume 4 years)                      

Start building facilities for each location (approx. 2 months per facility)                      

Drill all other wells                      

Start wells to sells                      

Conclusions• It is economical to pursue transport by LNG, but if horizontal

wells were drilled instead, there are many other options that would make good investments.

• GTL production is also a possible option!• The research that is on going in industry is promising .

Figure 4: Pipeline path from Magadan, Russia to Blagoveshchensk, Russia.

Figure 5: Difference in costs of pipeline for varying flowrates and conditions.

ProblemWith the supply of conventional energy sources on a decline and the demand for them increasing, the need for a large and stable supply of unconventional resources is growing fast. Natural gas hydrates can be found on the ocean floor and in permafrost regions, such as Alaska, Siberia and eastern Russia

• Can gas hydrates be exploited economically?• What are hydrates and where are they located?• What research is going on and what are the problems?• What is the time line for the project?• Where are the wells going to be drilled and how many?• What kind of production can be expected?• What markets can the natural gas from hydrate be sold in?• What is the most economic option to transport the natural

gas to the sales market?

Figure 6: Total Gas-to-Liquids (GTL) costs for varying gas flow rates.

Total GTL Costs

0

1000

2000

3000

4000

5000

130 195 260 390

Gas Flow Rate (MMscfd)

Co

st (

MM

$) Drilling

Surface Equipment

GTL Facility

Shipping

Total Pipeline Costs

0

1000

2000

3000

4000

5000

6000

130 195 260 390

Gas Flow Rate (MMscfd)

Co

st (M

M$) Drilling Costs

Surface Equipment Cost

Pipeline Cost

Total LNG Costs

0

1000

2000

3000

4000

5000

130 195 260 390

Gas Flow Rate (MMscfd)

Co

st

(MM

$) Drilling

Surface Equipment

LNG Facility

Shipping

Regas Facility

Vertical Wells (883000 ft3/d)

Net Present Worth LNG Pipeline

130 $3,109 -$4,437

195 $5,063 -$3,399

260 $7,040 -$2,294

390 $10,898 $545

 

Return On Investment    

130 20.54% 1.90%

195 22.26% 5.60%

260 22.93% 9.77%

390 23.86% 18.76%

Horizontal Wells (2.6 x 106 ft3/d)

Net Present Worth LNG Pipeline

130 $5,126 -$1,220

195 $7,951 $1,310

260 $10,894 $3,985

390 $16,673 $9,963

 

Return On Investment    

130 35.89% 7.92%

195 39.84% 17.02%

260 41.35% 21.83%

390 44.05% 29.80%