Abstract

Reserve-production ratio (RPR) is a key factor in the strategy of natural gas development. According to the characteristics in the course of gas industry development, a four-stage mode was developed. Current stage for China's gas development was identified as a benchmark for prediction. The factors influencing RPR were analyzed, and the rational RPR level for China was discussed. The gas development of China was predicted using a method taking RPR as a controlling factor.

Introduction

Reserve-production ratio (RPR) means the ratio of the remaining recoverable reserve to the current annual production. RPR implies how many years the existent remaining reserve can support a production of the current rate.

The value chain of natural gas industry is an integrated system of up-, mid-, and down-streams, and RPR is a concern of both up- and down-stream sections. RPR is a key factor in the strategy of natural gas development. It has been realized that the level of RPR is related with the harmonious development of the natural gas industry: For the upstream of gas industry, RPR is not only a balance between exploration and production, but also a balance between short-term interest and long-term stable development for a particular enterprise. Further, the level of the ratio is closely related with the development of the mid- and downstream. RPR is often taken as an essential factor in the decision making of infrastructure construction and the gas marketing.

According to the history of gas industry advancement and the RPR characteristics in other countries, a four-stage mode of gas development was proposed. This mode was applied to China's gas development analysis. The current stage for China's gas development was identified as a benchmark for prediction.

Based on the analysis of gas RPR, the rational RPR level for China was discussed. Taking RPR as a controlling factor, the natural gas development was predicted.

Four-phase Mode of Gas Development

From the history of natural gas industry in a number of countries (Fig 1 illustrates America's case), a four-phase mode could be induced. i.e.:

  • Phase 1: early stage of exploration and development: This stage could be characterized as low level of gas reserve and production rate. As a result, gas consumption remains low. RPR could have a wide range of change and behaves unsteadily. New findings could give relatively large affect to RPR and leads to jump of RPR. For example, the gas history of America before 1930 was this case. The annual production was less than 55 billion cubic meters (bcm), and RPR waved between 12 and 23.

  • Phase 2: booming stage of exploration and development: this phase would see the fast and steady growth in both reserve and production. Accompanying with new findings of gas reserve and relative delay of producing, RPR increases rapidly and could reach its historical summit. As long as the production increases, RPR would decreases to a lower level. In the booming stage of gas in America (from 1930 to 1973), the remaining recoverable reserve went up from 1303 bcm to 7670 bcm, and production grew from 54.2 bcm/a to 641 bcm/a, and RPR witnessed an increase from 24 to 37 in the period of 1930 to 1945 and a decrease to 11.9 in 1973.

  • Phase 3: sustained development stage of exploration and production: in this phase, the production rate and RPR would remain relatively steady, reflecting a balance between exploration and production. For the case of America (since 1974), the production rate sustained between 530–630 bcm/a, and RPR remained 8.3 to 11.6.

  • Phase 4: late stage of exploration and development: in the late stage, RPR decrease and production decline will occur as a result of reserve decrease.

Gas development in China

Since 1990, China's gas industry has been entering a booming stage of exploration and development. A number of exploration breakthroughs have been obtained, resulting in the discoveries of new gas fields and rapid growth of gas reserve. In 1989, the accumulative proved reserves of gas was 559.7 bcm, while in 2002, it has reached 3376.3bcm, indicating an annual increase averaged at 216.7 bcm.

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