Natural Gas Case Study

7 Key excerpts on "Natural Gas Case Study"

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  eBook - ePub

  Natural Gas

  Its Role and Potential in Economic Development

  • Walter Vergara(Author)
  • 2019(Publication Date)
  • Taylor & Francis

    (Publisher)

  Whatever the pricing concept, natural gas must cover all fixed and variable costs of development, production and operation plus the return on investment that will attract capital. Gas can be used as a vector for industrial development which requires that gas prices be competitive in the market place.

  Government has a role in gas pricing that must be exercised carefully as the international experience shows that gas development can be crucially dependent on pricing policies and regulations. The stakeholders' dialogues could help achieve consensus in this critical area.

  Conclusions

  Natural gas, traditionally the unwanted child of oil exploration, is likely to become the leading world energy resource before the middle of the twenty-first century. Furthermore, the growth of natural gas markets is bound to occur predominantly in today's developing countries, many of which could use gas as a leverage in accelerating their development process. There is plenty of scope for exploration, exploitation and development of natural gas in the world over the next century. New technologies will play a significant role in bringing gas from all sources into markets where new uses are likely to arise in the long-term future.

  Methane, the main constituent of natural gas, is a highly radiatively active gas. Methane in the atmosphere is 25 times more effective than carbon dioxide in terms of the green house effect. Consequently, burning methane to carbon dioxide and water is one way of combatting global warming. Furthermore, of all fossil fuels natural gas is the one that emits the least amount of carbon dioxide per unit of energy. This results from the elemental composition of methane with four atoms of hydrogen and only one of carbon. As concerns over climatic change increase, the environmental costs and benefits of natural gas development are likely to be internalized in economic calculations thus facilitating market penetration of gas. Natural gas is the environmentally sound fossil fuel.

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  Handbook of Natural Gas Transmission and Processing

  • Saeid Mokhatab, William A. Poe(Authors)
  • 2012(Publication Date)
  • Gulf Professional Publishing

    (Publisher)

  Once the fullest and most unbiased inventory of all sources of natural gas—be it methane emissions from waste or disused coalbeds, etc.—is compiled, the question as to whether it is indeed economically sounder to continue with conventional approaches or to conduct research into an innovative delivery system can be settled. Elucidating the history of actual development is quite important for shedding light on where thinking became trapped in the past down various blind alleys, and especially where various assumptions about crude oil as a nonrenewable fossil fuel were simply transferred and reapplied willy-nilly to natural gas.

  Another seed of yet further confusion is the very label “natural” in “natural gas.” The methane fresh from the cow and the methane trapped billions of years ago beneath the earth’s surface are doubtless equally “natural,” but are their actual potentials as sources of useful energy truly equal? Does pointing out that they both contain CH4 shut down all further discussion of this temporal dimension of the very formation of these compounds?

  Overwhelmingly, the main natural gas sources discussed by and within the oil and gas industry, and within the engineering fields of work connected with that industry, are those that can be extracted in connection with crude oil, using pipeline rights of way or related distribution systems developed initially by oil companies, etc. In the context of the political and economic implications of how strategic energy commodities in general are disposed of on the world scale, these same elements are also significant as this entire aspect emerges as a prominent feature of the overall picture. However, in discussions or considerations in purely engineering-based technical writing on the subject, it is still ordinarily and, it must be said, systematically excluded. This separation of engineering from politics and economics has enabled considerable confusion to grow into outright disinformation. This has spread in the form of two key messages: first, that the oil and gas industry is a hostage to “nature,” which possesses only finite quantities of usable or accessible energy sources to meet humanity’s infinitely expanding needs; and second, that humanity is the hostage of the oil and gas industry for the foreseeable future as no serious alternative sources of comparable energy content are available or conceivable.

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  Gas-Turbine Power Generation

  • Paul Breeze(Author)
  • 2016(Publication Date)
  • Academic Press

    (Publisher)

  Chapter 2

  The Natural Gas Resource

  Abstract

  Natural gas is produced from the fossilization of microscopic plants that were formed during the Carboniferous period, around 300 million years ago. Over time the gas has migrated from the rocks in which it was formed, often collecting in reservoirs beneath impervious rock caps. Conventional gas reserves from these reservoirs will normally flow to the surface once the reservoir is accessed. Gas is trapped within other rocks and can only be released by hydraulic fracturing. The main constituent of natural gas is methane but it can contain a range of other higher hydrocarbons. Proved natural reserves are around 190 trillion m3 but total reserves are certainly much larger. The Middle East and Russia hold the largest total national and regional reserves. The largest national producer and consumer of natural gas is the United States.

  Keywords

  Fossil fuel; methane; proven reserves; global production; global consumption; natural gas trade; gas pipelines; liquefied natural gas

  Natural gas, like oil, is the product of the fossilization of microscopic plants and animals that lived in the world’s oceans during the Carboniferous period which occurred between 300 and 360 million years ago. The plants, probably similar to algae, flourished in the oceans where they absorbed sunlight and used the energy to fix carbon from the atmosphere. When they died, they formed layers on the bottom of the oceans. These layers eventually turned into a polymeric material called kerogen. The kerogen was usually mixed with sand, clay and minerals to form strata which as they thickened and became under greater and greater pressure, eventually forming sedimentary rocks with the kerogen inside them.

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  The Economics of Oil and Gas

  • Xiaoyi Mu(Author)
  • 2019(Publication Date)
  • Agenda Publishing

    (Publisher)

  6 Natural gas Natural gas basics

  Like oil, natural gas is also a mixture of hydrocarbons, containing many different compounds. The largest component of natural gas is methane, a compound with one carbon atom and four hydrogen atoms (CH4 ). In addition to methane, natural gas in the reservoir also contains smaller amounts of heavier hydrocarbons called natural gas liquids (NGLs), such as ethane (C2 H6 ), propane (C3 H8 ) and butane (C4 H10 ), and non-hydrocarbon gases, such as carbon dioxide and water vapour.

  The formation of natural gas is, essentially, the same as the formation of oil, and takes a very long time – in the order of millions of years. In some places, natural gas is found in large cracks and pore spaces (reservoirs) between layers of overlying rock. Such gas is often called conventional natural gas and can be produced using traditional drilling and compression techniques. In other places, natural gas occurs in the tiny pore spaces within some formations of shale, sandstone and other types of sedimentary rock. This natural gas is called shale gas or tight gas and can be produced only by using novel techniques, such as fracturing. A type of natural gas that is found in coal deposits is called coalbed methane. Shale gas, tight gas and coalbed methane are collectively called unconventional natural gas, as they need some unconventional techniques to produce. Natural gas that occurs with deposits of crude oil in the pore spaces is called associated natural gas. Figure 6.1 gives a schematic view of various types of natural gas formation.

  Figure 6.1 Schematic view of natural gas formation

  Sources: Energy Information Administration and US Geological Survey.

  Natural gas is usually measured on either a volumetric basis or an energy content basis. The volumetric measures are given in cubic feet (CF or ft3 ) or cubic metres (CM), or the multiples of cubic feet or cubic metres, such as thousands of cubic feet (MCF), millions of cubic feet (MMCF) and billions of cubic feet (BCF) or thousands of cubic metres (MCM), millions of cubic metres (MMCM) and billions of cubic metres (BCM), and so on, usually measured at a “standard” temperature of 60.0°F (15.6°C) and pressure of 14.73 psi (one atmosphere).1

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  Effectively Managing Natural Gas Costs

  • John M. Studebaker(Author)
  • 2020(Publication Date)
  • River Publishers

    (Publisher)

  HAPTER 1

  NATURAL GAS —AN OVERVIEW

  THE NATURAL GAS SCENARIO

  Natural gas purchasing generally occurs in one of two scenarios. (1) The natural gas user receives the monthly billing from the natural gas utility and pays for it. (2) The natural gas user orders the natural gas needed on a monthly basis through the services of an agent (broker, agent (marketer), or producer), and arranges for transportation of natural gas on both an “inter” as well as “intra” state basis.

  Neither of these procedures are wrong so long as they result in the least costly natural gas for the user. The problem is—many natural gas purchasers are not really certain that the scenario utilized is the best one for them.

  Natural gas purchasing is regulated on both an interstate and intrastate basis. On the intrastate basis, there are many conditions that affect costs for the commercial or industrial user. From a natural gas purchaser’s viewpoint, it is important to sort out all of the potential pitfalls and opportunities that currently, as well as in the future, affect natural gas costs. To accurately assess natural gas costs, a purchaser must have at least a minimal understanding of the natural gas process—production, interstate (between)/intrastate (within) transportation, regulation, cost factors, local distribution company structures, and deregulation processes.

  The following material is intended to assist a natural gas purchaser that needs to know the best and least costly method of obtaining natural gas at a facility based upon usage characteristics. This material will help you to know—how you can get what your need, as inexpensively as possible when you need it.

  WHAT IS NATURAL GAS?

  1.  Natural gas is a combustible, gaseous mixture of simple hydrocarbon compounds, usually found in deep underground reservoirs formed by porous rock. Natural gas is a fossil fuel composed almost entirely of methane, but does contain small amounts of other gasses, including ethane, propane, butane, and pentane. Methane is composed of a molecule of one carbon atom and four hydrogen atoms

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  The Opec Natural Gas Dilemma

  • Bijan Mossavar-rahmani, Sharmin B Mossavar-Rahmani(Authors)
  • 2019(Publication Date)
  • Routledge

    (Publisher)

  Natural gas is also used as a primary fuel in industry in the production of steel, glass, cement, lime, ceramic, and pottery. It is favored over other fuels because of its high purity (there is an absence of contaminating substances in worked glassware when using natural gas), consistency and efficiency of combustion, performance flexibility, easy control of the combustion process (important in steel and glass industries), and the absence of ashes and sulfurous products. Natural gas has a wide range of uses in the residential and commercial sectors as well.

  Finally, natural gas can be used as feedstock for petrochemicals. Advanced processing techniques have led to the production of a wide range of petrochemicals from natural gas, including fertilizers such as ammonium nitrate, ammonium sulfate, and urea, basic materials for the manufacture of chemicals such as acetylene, and synthetic rubber.

  Assessing Reserves Estimates

  Four factors should be borne in mind when assessing the present and future availability of hydrocarbons such as natural gas. First and foremost is the distinction between resources and reserves. Resources are concentrations of naturally occurring solid, liquid, or gaseous materials, in or on the earth's crust, in such a form that economic extraction is currently or potentially feasible. Reserves, on the other hand, represent that portion of identified resources that can be economically and legally extracted at the time of determination. With respect to reserves, three basic distinctions are predominant in the natural gas literature although they appear under different labels. First, "proven" reserves represent an estimation under a rather limited and specific definition, of what may be called a current inventory of commercially recoverable natural gas underlying existing wells within a geographic and geological area. Proven reserves do not reflect the reasonable expectations of the industry concerning the amount of natural gas that will ultimately be recovered from known fields. For this purpose, the second, broader, more speculative estimate of "probable" reserves is made, based on expert geological knowledge and evidence. Beyond this, the third and even more speculative estimate is made of "possible" reserves. It is therefore important to know which set of figures is used in any given study or assessment.

  The second factor to be considered relates to the reliability of the data used. There is, for example, considerable uncertainty in estimating natural gas proven reserves. The characteristics of each reservoir, the production mechanism, the susceptibility to new recovery techniques, and production history offer a wide range of information from which an evaluation of the proven reserves must be made, and the margin of error can be considerable. Additionally, judgments about current economic viability tend to be subjective, and a field operator, company, or government may underestimate or overestimate the size of proven reserves for commercial, institutional, or political purposes. There are also instances where the only available figures combine crude oil, natural gas liquids, and natural gas in terms of crude oil equivalency, and the natural gas component may have to be guesstimated. Published estimates of natural gas availability must, therefore, be treated as nothing more than a general guide rather than an accurate assessment, especially given the fact that the available figures from different sources rarely coincide. For the purpose of consistency, this study has primarily relied on figures published by the Centre International d'lnformation sur le Gaz Naturel et tous Hydrocarbures Gazeux (Cedigaz) and by the OPEC Secretariat.

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  The New Economy of Oil

  Impacts on Business, Geopolitics and Society.

  • Norman Selley, John Mitchel, Jonathan Stern, Koji Morita(Authors)
  • 2013(Publication Date)
  • Routledge

    (Publisher)

  Chapter 5 Gas for oil markets Introduction This chapter looks at scenarios of global, regional and sectoral gas demand and prices. 107 It then reviews developments in gas markets in different regions of the world, highlighting four countries where the gas share of energy consumption grew particularly rapidly during the 1990s. A number of critical issues are identified for the further successful development of gas markets, and some conclusions are drawn regarding future challenges and uncertainties about how prices may develop along the value chain in different regions of the world. The value chain The value chain in the natural gas industry is different from that of oil. Because of the low density of natural gas in comparison to oil, a natural gas pipeline or container of a given volume will carry only 20% of the energy equivalent of the same volume of oil. This physical difference has a major impact on the costs in the natural gas value chain, in particular because most gas flows through pipelines from the point of production to the point of use. 108 Gas transportation costs – whether by pipeline or tanker – are much higher than those for oil, and can be multiples of the production cost. 109 For example, transportation comprises more than 90% of the total cost of delivering Siberian gas to west European borders through 5,000–6,000 km of large diameter pipeline. For gas fields in the North Sea delivering gas to the UK and continental Europe, the cost proportions would be more balanced, but for some Norwegian fields requiring long undersea pipelines at significant water depth, transportation would still account for the majority of the cost. Returns on the capital invested in transportation are a large component of the value added in the gas chain

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