Guest Editorial: Creating Value From Flared Natural Gas
- Martin Layfield (DNV GL)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- May 2016
- Document Type
- Journal Paper
- 14 - 16
- 2016. Copyright is retained by the author. This document is distributed by SPE with the permission of the author. Contact the author for permission to use material from this document.
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Approximately 5% of world annual gas production is being flared or vented. This is equivalent to approximately 110–140 billion m3 (Bcm) of gas, and equates to the combined gas consumption of Central and South America in 2013.
The World Bank estimates that flaring 140 Bcm would cause more than 350 million tonnes of CO2 release into the atmosphere. If this could be harnessed for power, for example, it could produce 750 billion kW-hr/year, more than Africa’s entire annual consumption.
Capturing the flared or vented gas presents an opportunity for operators to reduce the environmental impact as well as provide an economic opportunity to generate an additional revenue stream. The World Bank’s “Zero Routine Flaring by 2030” initiative is calling on governments and companies to achieve this target within the next 15 years. To address both the need to end routine gas flaring and tackle climate change concerns, DNV GL has conducted research titled “Natural Gas Capture - Clean and Economic,” which examines the viability of alternative solutions and their revenue potential.
The conceptual study looked at four existing oil and gas facilities, onshore in North Dakota, Algeria, and Russia, and offshore Vietnam, which provided a variety of volumes and rates of gas being flared. This enabled the modeling of a range of diverse technologies on real locations and field conditions as most flaring occurs at either aging and/ or remote locations.
Understanding the Challenges
A number of factors can affect the drive and desire to undertake a reduction in gas flaring. Existing solutions are mature for large-scale applications, but fewer technologies have been used commercially at a small scale. This is perhaps due to uncertainty in the industry about the technical and economic viability of capturing the gas at these levels.
Retrofits and transportation of recovered gas to processing facilities can be costly. Without a global cost penalty for emitted carbon there is seen to be little benefit to capture the flared gas, particularly in countries with developing economies. Similarly, different geographies conjure various technical, regulatory, and economic drivers and limitations. Access to funding to develop projects and the implementation of technologies is also a major factor.
Where there are carbon emissions regulations in place, there is obviously more incentive to capture the waste from gas flaring. In the US, there are limits in place for gas flaring that penalize operators through the curtailment of production for missing targets. As a result, new technologies are emerging with a variety of solutions. Since issuing its research, DNV GL has had a number of companies approach for assistance with the qualification process to help establish technologies in the market. The North Dakota Petroleum Council has set targets to reduce flaring. These were set to 26% by the fourth quarter of 2014, 23% by the first quarter of 2015, 15% by the first quarter of 2016, and 10% with the potential for 5% by the fourth quarter of 2020.
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