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Use of Hydrates for Natural Gas Storage

Objective

Major gas storage methods: Aquifers Depleted Gas Reservoirs Salt Caverns

Proposed method: Hydrates

The three major methods of storing natural gas are compared with the use of hydrates.

OutlineUse of Depleted Reservoirs

Use of Aquifers

Natural Gas Storage - A brief history

“After WW II, natural gas consuming countries noticed that the seasonal demands for natural gas could not possibly be met by then present pipeline delivery methods alone. The sizes and deliverability of pipelines would have to be increased dramatically to meet this challenge. The technology to construct such pipelines to transport the gas to major consumers was unattainable. Thus began the natural gas storage movement”.

Why Hydrates as Storage Method?

Cost factor Hydrates could be relatively cheaper than

other forms of storage method. Hydrates can be used for economic storage of

natural gas in cold countries and the associated cost can be relatively minimized.

Accessibility Tanks can be easily accessed when needed

especially during peak periods.Safety

Incase of an explosion, hydrates burn slowly due to the presence of ice.

Natural Gas Hydrates

Gas hydrates are naturally occurring solids composed of water molecules forming a rigid lattice cage containing molecule(s) of natural gas.

Natural Gas Hydrate Structure

Options for Storage

Pressurized Tank

Refrigerated Tank

Natural Gas Hydrates

• Pressure = 6MPA and Temperature = 293K

Natural Gas Hydrates

Hydrates production

Storage for water and gas mixture

Slurry mixture

Gas

Heat

V-14

Gas and water slurry after depressurizing

Recycled water flowing back to the system

Water removed

Hydrates gas recovery diagram

Pressurized tank in order to reduce cost.Volume of tank needed was found by

Where Q is the inlet flow rate of gas, and R is the rate of formation of hydrates.

Important Factors: Temperature and Pressure

Storage Method for Hydrates

Where R is the rate of hydrate formation, μ2

is the second moment of distribution around particle size for hydrate; f is the fugacity of gas, feq is the fugacity of gas at equilibrium, and K* is the kinetic parameter

Volume of reactor used for Hydration/Storage

Pressurized Tank

Gas Supply

Pump

Storage for water/gas mixture

Gas and water slurry supply after storage

Gas and water mixture

Flare gas

water

Fresh water supply

Recycle water

Fresh water supply

Compressor 129KW

Gas supply

V-2 V-3

V-4

Fresh water supply

V-5

V-6

Pressurized vessel heated

Heat

V-13

Process flow diagram for Hydrates

Depleted Gas Reservoirs

These are naturally occurring gas reservoirs that have been tapped of all recoverable natural gas.

Began in Ontario, Canada 1915.

Important Selection factors

PorosityPermeability

Cushion Gas

Injection Well

Withdrawal well

Pump

Valve

Compressor

‘the Hydrators’ Natural Gas Delivery

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Call: 1-800-Methane

Gas gathering pipeline

Wellheads

Working Gas

Depleted Gas Reservoir

Depleted Gas Reservoirs

Well-understood geological make-

up.

Existing gas processing facilities.

Primarily used for base-load gas

storage.

Depleted Reservoirs – Unique characteristics

Advantages

Large storage volume

Short development period

Disadvantages

Demands ready market

Requires low permeability

Poor regional spread

Aquifers

An aquifer storage field is a sub-surface facility for storing natural gas.Aquifers are water bearing sands topped by an impermeable cap rock

Aquifers

Summary of parameters used

Avg. Bottom Hole pressure 7.3 MPaTop pressure 101325 Pavolumetric flow rate 100 m3/smass flow rate 4302 kg/sDensity 0.717 kg/m3k 1.31Length of Pipe 100 m

Aquifers

Aquifers require cushion gas of up to 80% of total volume which make its utilization very high. Aquifers are mostly built when the price of natural gas is low.

P-19

E-9

compressor

Gas supply

V-2 V-3

V-1

Aquifer Underground Storage

Withdrawal pipe

Injection of gas

Withdrawal pipe

V-12

Process flow diagram for Aquifers

Aquifers

Land for Aquifers Must be well spaced at least 320-640 Acres apart Must be located no less than

100 feet from private homes 150 feet from public streams 50 feet from any streams

Land cost= $/acre × amount of acre used for storage (including restrictions)

Salt Caverns

These are large underground cavities created inside salt domes/deposits using leaching (solution mining) techniques.

Relatively new gas storage method (Began by SMGC in 1961).

Increasingly popular method of natural gas storage. Primarily located along the Gulf Coast (Texas, Louisiana, Mississippi and Alabama).

Solution mining technology

Valve

‘the Hydrators’ H2O Delivery

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Salt Dome

Salt Caverns

I/W well

Salt cavern formation

Cushion Gas

Injection Well

Withdrawal well

Pump

Valve

Compressor

‘the Hydrators’ Natural Gas Delivery

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Call: 1-800-Methane

Gas gathering pipeline

Wellheads

Working Gas

Salt Cavern

Salt Caverns

Salt Caverns

Salt Caverns – Unique characteristics

Storage development technology.

Smaller storage capacity.

Primarily used for peak shaving

gas storage.

Advantages

Cavern volume control

Low permeability

Minimal cushion gas requirement

Disadvantages

Smaller storage volume

Expensive development technology

Environmental concerns

Wells Valves Compressors Cushion gas Utilities

(Electricity) Pumps Land / Labor Installation costs Pressurized tanks

Gathering system Gas flow meters Dehydrators Separators Property

Taxes/Insurance Drilling Leaching

Development cost factors

Gas storage cost breakdown

As conduits for the transport of gas into and from the earth, they are an important part of any gas storage facility.Primary Gas well components:• Well casing• Well tubing Average number of gas wells is between 2 and 4 per storage facility.

Compressors are one of the most expensive components of any gas storage facility.Compressor-incurred costs come from power requirements, equipment material, etc.

Compressor power calculation

Gas storage cost breakdown

Cushion Gas

Provides the minimum

deliverability pressure

required by law.

Influences storage cost based on its ratio to the

working gas.

Current market price for natural

gas is approximately

$4.00 per mmbtu.

Costs also include

injection, withdrawal and storage costs.

Gas storage cost breakdown

Utilities (Electricity)Gas compressors and pumps are powered by electricity and this adds to the storage facilities total cost. •Storage capacities influence electrical power requirements which in turn influence total cost.•Electricity costs were calculated from compressor and pump power requirements.

Pumps• Pumps are required to aid gas delivery when the reservoir pressure is not high enough.• Pump incurred costs come from pump material and deliverability rates.• Deliverability = Withdrawn gas volume(mmscf)/withdrawal period(days).• They can be omitted if reservoir pressure is high enough.

Gas storage cost breakdown

Land• Leasing or outright purchase of storage

facility land is an important cost item.• Land is leased on a yearly basis. • Can be estimated as a fraction of the total

capital investment.

Labor• Labor is also an integral part of total cost

calculations.• Labor cost calculations came from total

development and withdrawal time periods. • Estimated using semi-skilled labor pay

rates(~$30.00/hr basis).

Installation costs Cost Factors

Include miscellaneous costs

associated with installing purchased

equipment and sometimes

associated labor.

Installation costs were

derived as a percentage of

equipment cost.

Gas storage cost breakdown

Gas storage cost breakdown

Depleted Gas Reservoirs

Wells• Average depth of 5500ft.• Well casing and tubing made from

medium grade steel.• Combined weight of well material is ~

6 lbs/ft• Current cost estimates of medium

grade steel = $1000/ton• Total costs = $35,000,000.00

Depleted Gas Reservoir

Compressors• The basic compressor equation was used

to estimate the compressor power requirements.

• Horse power estimates came up to 41,795 theoretically.

• Resulting total compressor cost estimate was approximately $7,877,987.14 .

Depleted Gas Reservoir

Cushion gas

Occupied half of the total gas

reservoir volume.

Purchase cost of gas is

approximately $4.00 per mmbtu.

We used estimates of

$4.00 per mmbtu.

Total cushion gas cost

estimates = $22 million for a

max. capacity of 10 BCF.

Depleted Gas Reservoir

Pumps•Pump costs were calculated using the gas delivery flow rates.•Pump cost estimates were approximately $418,619.79.

Electricity•Estimated from the horsepower requirements of the compressor and pump. •Total estimates equal $6,370,695.01 .

Depleted Reservoirs

Land:•Leasing cost estimates came up to about$250,000 per year.

Labor:•Estimated at $192,000 over the activation/injection and withdrawal period.

Installation costs:•Combined total of percent equipment costs, approximately 40 million dollars.

Total cost estimate=$30 million per BCF.

Salt Caverns

Salt Caverns

Salt Caverns

0 2000000 4000000 6000000 8000000 10000000 12000000$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

Comparing the effects of natural gas prices in Aquifer cost calculations

$ 4 cushion gas$2 cushion gas$6 cushion gas$8 cushion gas

capacity in mmbtu

$/m

mbtu

0

1000

000

2000

000

3000

000

4000

000

5000

000

6000

000

7000

000

8000

000

9000

000

1000

0000

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

$180.00

$200.00TCI of Acquifer compared to Hydrates

HydratesAquifer at $4/mmbtuaquifer at $6/mmbtuAquifer at $8/mmbtu

Capacity in mmbtu

TC

I/m

mbtu

0 2000000 4000000 6000000 8000000 10000000 120000000

0.1

0.2

0.3

0.4

0.5

0.6

0.7

ROI of Hydrates vs. Aquifer at different Natural gas prices

HydratesAquifer at $4 cushion gasAquifer at $6 cushion gasAquifer at $8 cushion gas

Capacity in mmbtu

RO

I

Cost Summary

Summary Results for Aquifers and Hydrates

Hydrates Aquifers

Compressor $291,466.80

Pumps $83,333.34

Cushion Gas - $32,000,000.00

Extra Fees $1,800,000.00

Land $45,000.00 $25,000,000.00

Utilities $42,000.00

Pressurised Tank $24,625,109.00 -

Valves $182,625.97

Pipes $181,779.20

TCI/mmbtu $15.18 $35.65

ROI 0.66 0.28

Total Cost $25,591,314.31 $60,113,205.31

0.00E+00 2.00E+06 4.00E+06 6.00E+06 8.00E+06 1.00E+07 1.20E+07$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

$180.00

$200.00

$220.00

Cost Comparison for typical Salt cavern and Depleted reservoir

D.R. at $2.42/mmbtuD.R at $4.42/mmbtuD.R. at $6.42/mmbtuD.R at $8.42/mmbtuS.C at $2.42/mmbtuS.C at $4.42/mmbtuS.C at $6.42/mmbtuS.C at $8.42/mmbtu

mmbtu

$/m

mbt

u

0.00E+00 1.00E+06 2.00E+06 3.00E+06 4.00E+06 5.00E+06 6.00E+06 7.00E+06 8.00E+06 9.00E+06 1.00E+070.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

0.20

Return on Investment

D.G.ReserviorSalt cavern

MMBTU

ROI

Conclusions

Equipment Cost for Hydrates is not as expensive as other existing forms of storage.

Return on Investment is Higher than other compared methods.

Accessibility/mobility factors favor hydrates.

Conclusions/Recommendations

● Hydrates can be used for economic storage of natural gas in countries with colder climates. ● Associated costs of natural gas storage using hydrates can be relatively minimized.● The use of natural gas hydrates for storage is an alternative that maintains a high degree of safety. An ignited gas hydrate mass burns slowly and doesn’t explode due to the presence of frozen water molecules.

Thank you

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