Associated gas is estimated to account for 17% of global gas reserves. However, majority of associated gas resources are small or located offshore which have made the utilization uneconomical. Operators have thus preferred either flaring or re-injecting the gas rather than utilization. Currently, none of these two options are favored as it is proven that gas re-injection has reverse effect on well recovery over time. Gas flaring is also not pleasant (even not permitted) because of stringent environmental regulations such as carbon tax. These reasons and the elevating energy prices have increased attentions towards utilization of associated gas resources.

There are a number of gas utilization technologies that have the potential to make the development of stranded gas resources economically viable. Some of these however have not yet been fully developed and proven on a commercial scale, though being conceptually feasible. The most advanced among these alternative technologies include LNG, CNG, GTL and NGH. These processes are highly capital-intensive and require considerable gas reserves to justify their deployment. Accordingly, these technologies are challenged to be economical when the size of the field is small (like most of the associated gas resources) or the markets are located far away from the field.

In this study, we have investigated each of these processes based on different variables such as reservoir capacity, distance to market, process CAPEX & OPEX, safety, etc. This paper discusses the pros and cons of these processes and presents the sweet spot for each of the technologies based on gas reserve and distance to market.

Associated Gas Problem

Associated gas is natural gas found in association with crude oil. According to the latest data from EIA, the total gas reserves in the world are about 6200 tcf. However, some studies have estimated that global associated gas reserves without commercial value exceed 1000 tcf (around 17% of total gas) [1].

National Geographic Data Center (NGDC) through collaboration with World Bank's Global Gas Flaring Reduction (GGFR) partnership is carrying out a project to develop a methodology to estimate global gas flaring volumes based on satellite sensor observations. The center has reported the global volume about 4.9–6.1 tcf per annum within the period of 1994 to 2008 with maximum amount of 6.1 tcf in year 2005 and minimum of 4.9 tcf in 2008 [2]. Such amount of gas accounts for about 5–6 % of total world's natural gas consumption [3].

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