SPE DISTINGUISHED LECTURER SERIES

is funded principally
through a grant of the

SPE FOUNDATION
The Society gratefully acknowledges
those companies that support the program
by allowing their professionals
to participate as Lecturers.

And special thanks to The American Institute of Mining, Metallurgical,

and Petroleum Engineers (AIME) for their contribution to the program.
 Transforming
Stranded Gas Resources
into Profitable Assets
Enabling technologies
and the status of their
commercialization
Gas Power
DC
Field Station

DC AC
Market 1
DC AC
Market 2

AC Market 3

By Joe T. Verghese
ABB Lummus Global Inc.
 Overview

Stranded Conventional Gas

The Geography and Key Drivers
Principal Technology Options
NGLs Extraction
Pipelines
Baseload and Mid-Scale LNG
GTL
CNG
Gas to Wire
Hydrates
Technology Maturity & Delivery to Commercialization
Conclusions

© SPE 2004-05 (3)

 The Energy Mix
Hydro
Gas Nuclear
3%
8%
120

Coal Oil
25% 39%
110
Oil
Index

Natural Gas
100 25%

Gas now 25% of

Primary Energy
Coal
90 Consumption

80
‘90 ‘93 ‘96 ‘99 ‘02

The Energy Mix is getting lighter

© SPE 2004-05 (4)

 Stranded Gas and Target Markets

Stranded Gas
Import Markets

© SPE 2004-05 (5)

 Stranded Gas – The Components
Non-
Remote from markets and pipeline infra-
Associated Gas structure
Prospects

Associated Gas Produced from existing crude oil

AssociatedGas
Gas production operations but quantities sub-
Produced
Produced economic for transport to market

Associated gas flared from mature oil

Flared
FlaredGas
Gas production operations

© SPE 2004-05 (6)

 Non-Associated Gas Reserves –
Barriers to Monetization

Substantial
Contaminants
CO2/H2S

Lack of
Pipeline Infra-
structure
Stranded Gas
Resource
Geographic
Constraints

Political Risks
to
Development

© SPE 2004-05 (7)

 Associated Gas – Barriers to Monetization

Sub-Economic
production volumes

High Capex for

gas capture/export

Production rate
swings

© SPE 2004-05 (8)

 The LPG FPSO Concept
NGL EXTRACTION OFFSHORE
• Extract Value from:
• Flared Gas
• Reinjected Gas
PRODUCTS
• NGLs (Propane and Butane)
• Mixed LPG
• Condensates

Flowlines

Manifolds Condensate Inlet Gas

Stabilisation compression
Ancillary
Power Process/
LPG
Utilities Flare
Generation Process Extraction
Support
Product Export Gas
Splitter compression

© SPE 2004-05 (9)

 Pathways to Gas Utilization

Compressed Chemical
Liquefaction
Gas Conversion
Transport

DME
GTL
Pipelines CNG LNG
Methanol

© SPE 2004-05 (10)

 Gas Value Chain
Alternative
Transportation
Modes

HVDC - Light Gas to Chemicals

GTL MeOH
CNG DME
Hydrates NH3

Production Treating
& & LNG
Gathering Processing

OPTIONS Baseload LNG

Removal/Stabilization of Condensates Mid-Scale or Niche LNG
Dewpointing/Conditioning of Gas
Removal of Acid Gas & other
contaminants (N2, Hg, etc)
NGL Extraction/ Fractionation
Pipelines

© SPE 2004-05 (11)

 Technology Application Bands
Stranded Gas

6.6 1000

Baseload
LNG

4.6 700

3.3 500

Niche CNG
LNG
DME

0.3 50 GTL Methanol

FIELD PRODUCTION
RESERVES (TCF) RATE (MMscfd)

© SPE 2004-05 (12)

 Gas Transportation Options

Gas
Conversion

LNG

CNG

Onshore
Pipeline
Offshore
Pipeline
0 1000 2000 3000 4000 5000 6000 7000 8000
Distance to eventual markets, kms

© SPE 2004-05 (13)

 Phillips Optimized Cascade LNG Process

Fuel
Fuel Gas
Gas Plant fuel
Distribution
Distribution
FEED
GAS
Ship
Propane
Propane Ethylene
Ethylene Vapours
Gas
Gas Methane
Methane Vapour
Vapour
Refrigeration
Refrigeration Refrigeration
Refrigeration
Conditioning
Conditioning Compressor
Compressor Recovery
Recovery
System
System System
System

LNG
LNG Storage
Storage Marine
Marine
Liquefaction
Liquefaction and Loading
and Loading Facilities
Facilities

NGL
NGL
Stabilization
Stabilization LNG to ship
NGL
NGL Storage
Storage
and
and
Shipment
Shipment
Reproduced with ConocoPhillips’ Permission

© SPE 2004-05 (14)

 Mini/Mid-Scale LNG Technologies
Methane Expansion + Propane Refrigeration
LNG-Pro Scheme
U.S. Patent 5,755,114
Recycle Compressor Propane Refrigerant
To/From

LNG Production Flash

Dual Expansion Methane / Nitrogen

Recycle Stream

BAHX
U.S.Patent 6,412,302

Booster Compressor c

Inlet Gas Stream After

Methane Expander
Treating and Dehydration Expander

This scheme is the intellectual

property of the Randall Division of
ABB Lummus Global Inc.
Methane Recycle
Compressor Propane Pre-Cooled
Dual Expansion Methane / Nitrogen
Expander Outlet Separator

Liquid Expander

BAHX

U.S.Patent 6,412,302

Methane Recycle
Compressor

Nitrogen Expander

Methane Expander

Nitrogen Recycle
Compressor

Liquid Expander
Treated Inlet Gas
BAHX

HL Chiller LL Chiller

Nitrogen Expander

Nitrogen Recycle
Compressor

© SPE 2004-05 (15)

 Mini/Mid-Scale LNG Technologies
Dual Expansion Methane / Nitrogen
US Patent 6,412,302

Methane
Expander
Methane Recycle
Compressor

Liquid Expander

BAHX

Nitrogen Expander

Nitrogen Recycle
Compressor Suitable for offshore deployment

© SPE 2004-05 (16)

 Gas Liquefaction

Cooling

Liquefaction Zone for Turboexpander Processes

Liquefaction

Liquefaction Zone for Most Mixed Refrigerant Processes

Subcooling

© SPE 2004-05 (17)

 Equipment Components
Plate Fin Heat Exchanger Turbo-Expander

Methane Cycle Methane to BAHX

Nitrogen Cycle Nitrogen To BAHX

Methane Nitrogen
Compressor Compressor

Gas Turbine Compression String

© SPE 2004-05 (18)
 Development Concept – Niche LNG

Oil Development Niche LNG Chain

LNG

NICHELNG FPSO LNG TRADE CARRIER

OIL FPSO
LPG CARRIER FOR
SMALL PARCELS

Associated Gas
Feed Stock

© SPE 2004-05 (19)

 LNG Processes - Specific Energy
Cascade Refrigeration

Propane
Compressor
Ethylene
Compressor
Methane
Compressor
Mixed Refrigerants
Pretreated To Fuel Gas
Feed Gas

Cold Box

LNG Product to Storage

LNG Product Pumps

LNG Product
to Storage

LNG Pumps • SMR

Turbo-Expander Cycles
• DMR
Spiral Wound Production of LNG Using Dual Independent Expander Refrigeration Cycles
Exchanger Intellectual Property of ABB Lummus Global
Patent Pending

• CMR
Embodiment 'A'

14 kW/ton LNG day • Prico

Mixed Refrigerant
Compressor

• APCI
Methane Booster Methane Recy cle
Compressor

Liquid Expander

Pretreated Feed Gas Treated Inlet Gas

Propane Pre-Cooling System

BAHX

Propane Refrigerant
Compressor

12.2 to 16.8 kW/ton LNG day

Methane Expander Nitrogen Expander

Nitrogen Booster Nitrogen Recy cle

Compressor

12.5 to 16.5 kW/ton LNG day

Intellectual Property of ABB Lummus Global
Patent Pending
Embodiment 'C' Propane Pre-Cooled

Methane Recycle
Compressor

Methane Expander

Liquid Expander
Treated Inlet Gas
BAHX

HL Chiller LL Chiller

Nitrogen Expander

Nitrogen Recycle
Compressor

© SPE 2004-05 (20)

 ABB LNG Turbo-Expander Technologies
We Achieved: Benefits:

Process Simplicity Safe Operation - Simplicity of

Operation - High Reliability - Cost
Effective
Low Equipment Count

Lower CAPEX
Use of proven standard
equipment (compressors,
expanders, plate-fins) Optimized Procurement Cycle
High Operational Availability (~ 3 years)
High Degree of Modularization

Reduced Plot Area

No Refrigerant Inventory
Minimal Flare Requirements
No Motion Impact

© SPE 2004-05 (21)

 Gas to Liquids Value Chain

GTL CORE PROCESS

Conditioning FT Syncrude
Reforming Hydrocracking
Conversion Fractionation
Associated
Gas

Storage/
Export
Oil
Production

or CH + H 0 = CO+3H
CH4 4+ H202 = CO+3H2 2
2CH4 + O2 = 2CO + 4H2 n CO + 2nH2 = [-CH2-] n +H2O
2CH4 + O2 = 2CO + 4H2 n CO + 2nH = [-CH -] n +H2O
CH + 20 = CO + 2H 0 n CO + (2n+1) H2 2 = CnH22n+2+nH 20 0
Stranded CH4 4+ 202 2= CO2 2+ 2H202 n CO + (2n+1) H2 = CnH2n+2+nH 2
CH4 + CO2 = 2CO + 2H2
Gas CH4 + CO2 = 2CO + 2H2

© SPE 2004-05 (22)

 Natural Gas Reforming Technologies
Typical Steam Typical Partial Oxidation
Oxygen
Fuel Methane Reforming
Hydrocarbon
Feed
Convective
Catalyst Heat
Tubes Recovery
Burners
Stack
Refractory Burner
Lined
Vessel

Fired
Effluent Gas
Heater
Steam Effluent Gas
Hydrocarbon Feed

Typical Autothermal Reforming Typical Gas Heated Reforming / O2 Reforming

Oxygen or Enriched Air Oxygen

Natural Gas
Hydrocarbon
Feed
and Steam Burner
Refractory
Lined
Catalyst
Refractory Vessel Catalyst
Lined
Vessel Effluent
from
Secondary
Effluent Gas Reforming

© SPE 2004-05 (23)

 Fischer Tropsch Plants
Installation Operator Age (years) Capacity Plant Scale
(bpd)

Sasol 1, Sasolberg (South Sasol 47 5,000 Com m ercial

Africa)

Sasol II and III, Sasolberg Sasol 22/20 150,000 Com m ercial

(total)

Moss Gas, Mossel Bay, Mossgas 11 22,700 Com m ercial

South Africa

Shell, Bintulu (Sarawak), Shell 9 12,500 Com m ercial

Malaysia
Fuel Processes
Rentech 2 275* Com m ercial
Development Com pany

Baton Rouge E xxonMobil 9 200 Dem onstration

Cherry Point BP (Arco) 1999-2000 70** Dem onstration

Started up
Ponca City ConocoPhillips 400 Dem onstration
2003

Started up
Nikiski BP 300 Dem onstration
2003

* Plant decom m issioned/redeployed.

** Plant decom m issioned/redeployed to Tulsa (DOE’s Ultra-Clean Fuels Project)

© SPE 2004-05 (24)

 Capex Trends For
Fischer Tropsch GTL Technology

CAPEX TRENDS

Installed Plant Licensor 1 Licensor 2 Licensor 3 Licensor 3

Reference Expectation Expectation Expectation Expectation (70,000 BPD)

70,000

60,000

50,000

40,000 Conventional
$/bpd

Refinery
30,000 Benchmark

20,000

10,000

0
1993 1996 1997 1998 2000 2002

© SPE 2004-05 (25)

 GTL Integrated Oilfield Architecture

OIL FPSO
Syncrude or
Product GTL FPSO
Export
5 km

FPSO
Oil Export Oil/Gas
Processing
GTL FPSO

R
i
s
e
r
s

Wells/ Manifolds &

Reservoir
Trees Flowlines

© SPE 2004-05 (26)

 Offshore Design Issues
Floater Based GTL Process Schemes

Pitch Yaw Heave Roll

Vessel Motion Impact:

Process System Performance

Flexing of Vessel Deck and Stresses on Equipment/Piping Systems

Other Issues:
Large Number and Complexity of Equipment in Intensified Layout

High Equipment Weight, Weight Distribution and Point Loads

© SPE 2004-05 (27)

 GTL Commercialization

Offshore Commercial
Commercialization Trajectory

Scale 15-30,000 BPD

Project (Severe Environment)
Learnings
Offshore Commercial
Scale 15-30,000 BPD
(Benign Environment)

Onshore Commercial
Scale 80-150,000 BPD

Onshore
Commercial Scale
20-80,000 BPD
Technology
Onshore
Demonstration
Development
Pilot Plant Unit

Time

© SPE 2004-05 (28)

 Marine Transportation of CNG
CNG Fleet Size & Vessel
Capacity = ƒ (Gas Rate,
Distance to Market)

Modest Infrastructure at Production

Onshore
and Market Delivery Point Reception
Facilities
Target Market Opportunities:

10
Gas Volume Rates of 200 - 500 MMScfd

30
km

–
s
CNG Unloading
Distances of 500 – 3000 kms

Gas Transport in CNG Carriers

50
0–
300
Concepts offered by:

0
km
Coselle – Cran and Stenning, Calgary

s
CNG Loading

Votrans – Enersea Transport, Houston Gas

Field
GTM – Transcanada Pipelines, Calgary

© SPE 2004-05 (29)

 Marine Transportation of CNG

Three principal approaches:

Choice of materials to make lighter
Hi-Pressure,
system Ambient Storage
0.9

Z factor, compressibility
Maximizing containment pressure
Lean Gas
to store more gas 0.6
-20ºF
Chilling the gas to take advantage Rich Gas
0.3
of favorable compressibility factor
0.1
CNG Containment Pressure Range: 0
1500 – 3500 psig 0 1,000 2,000 3,000
Pressure, psia
Use of Composite Pressure Vessels

Ship CNG Concept not commercialized to date

© SPE 2004-05 (30)

 Gas (Energy) Transportation by HVDC
SCALE (kilometres)
• 0 500 1000 1500
•
•

DC
Gas Field Power Station

DC AC
Market 1

DC
AC Market 2

Converter Station AC Market 3

© SPE 2004-05 (31)

 Transmission Capability of Cables with the same Dimensions

120
Transmitted power %
100

80

60 Present AC
Future AC

40 HVDC Light

20

1020
300

540

780

900
120
180
240

360
420
480

600
660
720

840

960
60
0

Distance in km
© SPE 2004-05 (32)
 The Converter Station - Components

Converter Station Transmission Cable

Converter HVDC to Markets

Phase
Reactor
AC bus

AC filters DC Capacitor

Control
System

© SPE 2004-05 (33)

 Gas Transportation as Hydrates

BG Group, Marathon, NTNU, Norway and others have

been working on gas-to-solids technology
Stranded gas transported to market as dry hydrates, hydrate
pastes and hydrate in crude oil slurries.
BG has laboratory tested reactor design and process schemes
Concepts include storage and transport of gas:
either as atmospheric hydrates
or as paste in pressurized insulated containers
Marathon has worked on proprietary process technology for
production and shipping of stable slurries.
NTNU has worked on concepts where frozen hydrates are mixed
with refrigerated crude oil for atmospheric pressure transport.

© SPE 2004-05 (34)

 Hydrates Processes for Storage & Transportation
BG Scheme Gas back to reactor

Water A series of CSTRs

Gas/slurry Hydrate slurry Screens and
(10 to 15ºC,
Natural Gas separator (10.5 vol/vol) hydrocyclones
60 to 90 bar)
Hydrate slurry
(75 vol/vol)
Water back to reactor Shipping vessels
(2 to 3ºC, 10 bar)

NTNU Scheme
Natural Gas Hydrate reactor
(low temp. 90 bar)

Crude oil/
Fluid from Pre-cooled water
Separator hydrate slurry
production well
Storage Tank
Pre-cooled crude oil (-10ºC or lower,
1 atm)

Source: GasTIPS W . 2005

© SPE 2004-05 (35)

 Technology Delivery to Commercialization

Fischer Tropsch
Commercial
Scale Units Shell ‘MDS’ LNG
Sasol ‘Synthol’
Technology Maturity Domains

Methanol
Rentech
BP
Exxon AGC-21
Pilot Scale Plants

Syntroleum
ConocoPhillips
DME CNG

Hydrates Transport
R and D

Direct Methane Oxidation to Distillates

Ionic Transport (Ceramic) Membranes

Commercial Viability

© SPE 2004-05 (36)

 Conclusions
Exploitation of Stranded Gas

Tec
hno
l og
y
Pipelines
Stranded Gas by Wire
LNG Delivered Gas
Gas GTL $/MMBTU
Resources CNG Markets
Hydrates

f olio
or t
P

© SPE 2004-05 (37)