Economic Feasibility Study of Several Utilization Alternatives For A Stranded Offshore Gas Reservoir
- Khoi Viet Trinh (University of Oklahoma) | Rouzbeh Ghanbarnezhad G. Moghanloo (University of Oklahoma)
- Document ID
- Offshore Technology Conference
- Offshore Technology Conference, 4-7 May, Houston, Texas, USA
- Publication Date
- Document Type
- Conference Paper
- 2020. Offshore Technology Conference
- FLNG, Sensitivity Analysis, Tornado Charts, Pipeline
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- 66 since 2007
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Floating Liquefied Natural Gas (FLNG) has been on the rise in recent years to meet growing energy demand, worldwide. As energy consumption and exploitation of onshore unconventional gas reservoirs continue to grow while gas price remains almost steady, FLNG can potentially become the key for operators in offshore gas fields through integration of upstream and midstream processes on the spot.
This paper compares project economics of a FLNG utilization to those of onshore LNG plant, and Gas-to-Wire (GTW) processes. Sensitivity analysis and tornado charts are used to evaluate importance of various uncertain parameters associated with FLNG construction and operation. Costs for the hypothetical FLNG vessel is taken from the average cost of Shell's Prelude FLNG; while pipeline, LNG plant, and gas-to-wire costs were obtained from typical industry standards. A typical hyperbolic decline curve model is applied to model depletion flow regime of production life after two scenarios: a 5- and 10-years constant rate plateau time, respectively.
Several factors are included in the sensitivity analysis: LNG price, interest rate, initial production rate, and condensate-to-gas ratio (CGR), distance from shore, electricity price, natural gas price and percentage share of overnight capital cost of building a power plant to convert gas to electricity. The factors are used to gauge their effects on the net present value (NPV) of each scenario and are ranked based on their sensitivity on a tornado chart, with the most sensitive parameter on top, and so on. The analysis suggest that initial production rate has the strongest effect on NPV, followed by discount rate, LNG price, CGR, and the distance from onshore when the reservoir is dry gas. This means the longer the distance from onshore, the more attractive the FLNG alternative becomes. However, when gas price is low, and a subsidy can be obtained, GTW becomes more attractive.
This economic feasibility study will be helpful for future considerations to use FLNG to make offshore gas reservoirs that were previously considered stranded into economically viable resources. The results from this economic model will certainly play a key role in the future of natural gas industry and energy market, especially in West Africa, particularly, in Nigeria.
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