Key Features:
- No of Pages: 100
- No of Chapters: 5
- Preliminary pages
- Images
- Tables
- Full research conducted
- Appendix
Abstract:
This work evaluates the economic viability of using mini Gas-to-liquid technology for the monetization of associated stranded flared gas at Izombe location, in the Niger Delta, Nigeria. The Izombe field has been noted as the area of large production of associated gas. This gas has been stranded and thus flared because of lack of proximity to market. The average 40mmscfd of Izombe flared gas is to be put to monetization. The volume available for monetization after preliminary treatment and NGL recover corresponds to 32.07mmscfd. This volume yields a GTL product of 3207b/d of diesel. The Fisher Tropsch synthesis reaction method was used for the conversion of the synthesis gas to diesel using iron catalysts. The economic analysis identified several economic factors that characterizes the economic profitability of the project. An economic model was developed which was simulated in MATLAB script known as GTL.m for the simulation of results. The results of the sensitivity analyses show that the CAPEX has significant impact on the overall profitability of the project. The results also reveal that the OPEX has negligible effect on the NPV of the project. Economic factors such as diesel price, natural gas price and discount rates all have serious impact on the profitability of the project. From the results it is seen that the project will always yield positive NPV as long as the natural gas price is below $1.5/Mscf for all discount rates. And for a discount rate of 29.3% the project yields positive NPV for diesel price of $67/bbl and above.
Table of Content:
TITLE PAGE 1
CERTIFICATION 2
DEDICATION 3
ACKNOWLEDGEMENTS 4
NOMENCLATURE 5
ABSTRACT 7
LIST OF TABLES 8
LIST OF FIGURES 9
CHAPTER ONE 14
1.0 INTRODUCTION 14
1.1 BACKGROUND OF STUDY 14
1.2 STATEMENT OF THE PROBLEM 16
1.3 OBJECTIVES OF STUDY 17
1.4 METHODOLOGY 17
1.5 SCOPE OF STUDY 21
1.6 SIGNIFICANCE OF STUDY 21
CHAPTER TWO 22
LITERATURE REVIEW 22
2.1 NATURAL GAS 22
2.2 ASSOCIATED GAS 23
2.3 STRANDED GASES 24
2.3.1 Modes of Occurrence of Stranded Gases 25
2.4 STATE OF ASSOCIATED GAS IN NIGEIRA 26
2.5 THE NIGERIA NATURAL GAS INDUSTRY 27
2.6 GAS FLARING 28
2.7 GLOBAL IMPACT OF GAS FLARING 31
2.7.1 Environmental Implications of Gas Flaring 31
2.7.1.1 Greenhouse Gas 31
2.7.1.2 Climate Change 32
2.7.1.3Acid Rain 32
2.7.1.4 Agriculture 33
2.7.2 Health Implications for Humans 34
2.7.3 Economic Effects 35
2.7.4 Pollution 36
2.8 FORMS OF STRANDED GAS CONVERSIONS 38
2.8.1 Gas Liquefaction 38
2.8.2 Conversion to Liquids 38
2.8.3 Conversion to Solids 39
2.9 GAS MONETISATION TECHNOLOGIES 39
2.9.1 GAS-TO-WIRE 39
2.9.2 NATURAL GAS LIQUIDS (NGL) EXTRACTION 40
2.9.3 LIQUIFIED NATURAL GAS (LNG) 40
2.9.4 COMPRESSED NATURAL GAS (CNG) 40
2.9.5 NATURAL GAS TO HYDRATE (NGH) 41
2.9.6 GAS-TO-LIQUIDS (GTL) 42
2.10 FACTORS AFFECTING GAS MONETISATION OPTIONS 43
2.11 GAS TO LIQUIDS TECHNOLOGY 44
2.12 THE FISCHER TROPSCH METHOD 45
2.13 SCALING IN GTL TECHNOLOGY 50
2.13.1 LARGE SCALE GTL 51
2.13.2 SMALL SCALE GTL (MINI GTL) 52
2.13.3 ECONOMIC BENEFITS OF MINI GTL 54
CHAPTER THREE 55
METHODOLOGY 55
3.1 THE NATURAL GAS TREATMENT AND PROCESSING 55
3.1.1 PRETREATMENT OF THE FEEDGAS 55
3.1.1.1 Sweetening Process 56
3.1.1.2 Cost considerations 56
3.1.1.3 Typical process equipment for sweetening sour gas with a regenerative solvent 57
3.1.1.4 Amine Systems 58
3.1.2 NGL RECOVERY 59
3.1.2.1 Absorption 60
3.1.2.2 Cryogenic Expansion Process 60
3.1.2.3 The turbo-expander process 61
3.2 THE GTL PROCESS 62
3.3 ECONOMICS OF GTL PLANT 64
3.3.1 Capital expenditure 65
3.3.2 OPERATING EXPENDITURE 66
3.3.2.1 The non-feedstock OPEX 66
3.3.2.2 Natural gas price (Feedstock cost) 67
3.3.3 CRUDE OIL PRICE 67
3.3.4 INVESTMENT DECISION PARAMETRES 67
3.4 CASE STUDY 69
3.5 BASE CASE DESCRIPTION 71
3.6 ECONOMIC PARAMETRES 72
CHAPTER FOUR 73
RESULTS AND DISCUSSIONS 73
4.1 RESULTS 73
4.2 SENSITIVITY ANALYSES 76
CHAPTER FIVE 90
CONCLUSION AND RECOMMENDATION 90
5.1 CONCLUSION 90
5.2 RECOMMENDATION 91
REFERENCES 92
APPENDIX 97
APPENDIX 1 97
APPENDIX 2: MATLAB SCRIPT 98
APPENDIX 3: RESULT VIEW OF THE MATLAB SCRIPT WHEN RUNNED 99
Introduction:
A good percentage of natural gas reserve is stranded in deep offshore locations, in difficult and remote areas or produced as associated gas. Bringing these stranded gases to the market is usually challenging especially when distance makes pipelining economically prohibitive.
The availability of the resources for the end users is therefore hampered by production and transportation costs which can exceed the price at which the gas can be sold. In such situations, innovative technical means are needed for reducing the costs and providing new outlets for natural gas.
When lack of facilities for transmission and distribution is available, there is only a limited number of outlets for the associated gas. This includes a re-injection (for pressure maintenance or for future recovery) and gas flaring. Gas flaring is the controlled burning of the associated gas in the atmosphere and it is a global environmental issue.
In order to address the issues of gas flaring, it is important to understand the reasons why natural gas is being flared. Since oil and natural gas are mixed in every oil deposit, natural gas called “associated gas” must be removed from oil before refining (Ashton et al, 1999). Gas flaring is simply the burning of this associated gas. Issues of gas flaring is currently illegal in most countries of the world, and may occur in certain circumstances such as emergency shutdowns, non-planned maintenance, or disruption to the processing system (Hyne, 1991). Recently, 56.6 million m3 of associated gas is flared every day in Nigeria (Gerth and Labaton, 2004). In 2002, Nigeria has the world’s highest level of gas flaring, and it flares 16 percent of the world’s total associated gas (GGFR 2002). Due to lack of infrastructure, approximately 76 percent of associated gas is flared in Nigeria, compared to 8 percent in Alberta, Canada (Africa News Service 2003, Watts 2001).
Nigeria had regulations on the books banning gas flaring for more than a quarter of a century, however they are yet to effectively implement their policies. In 1969, the Nigerian government legislated a requirement that charged oil companies to set up infrastructures to utilize the associated gas within five years of commencement of oil production (Manby, 1999). The government also enacted the Associated Gas Reinjection Act in 1979, which charged oil companies to stop gas flaring within five years (Manby 1999). However, the companies preferred to pay the fine imposed by the government as a penalty for gas flaring rather than stopping the flaring. Although the fine for gas flaring has skyrocketed from Naira 0, 5 to Naira 10 (U.S. 11 ¢) for every 1,000 ft3 of gas in 1998 (Manby 1999, Project Underground 2003), but this fine is still very low to have an impact on these companies’ policy toward gas flaring. Moreover, approximately $3 million per month of fines that the government receives is just a fraction of what it could impose.
The reason for high rate of gas flaring in Nigeria is primarily due to;
1. Lack of Infrastructure due to high cost involved in the gathering and processing of gas
2. Distance from gas producing wells to product market
3. Gas price distortion due to local subsidies and legislation
4. Lack of capital to invest in gas projects
5. Small gas volumes and volume changes which make investment in conventional gas processing facilities uneconomical.
The attendant impact of gas flaring in Nigeria cannot be over-estimated. Aside the billions of dollars lost annually to gas flaring when quantified financially, a lot of other impacts of gas flaring is noticeable in Nigeria. The severe environmental degradation of the ecosystem resulting to loss of ecological lives, emergence of sicknesses, air, water and land pollutions, release of poisonous gases that hampers human habitation, release of greenhouse gases resulting to global warming to mention but a few. With all these, the Niger Delta region of Nigeria can be said to be the area most impacted by oil activities in the world.
In most favourable situations, where a transport network and market are available, the gas is processed and heavy fractions are extracted as Natural Gas Liquids (NGLs). When the injection does not enhance oil recovery, its cost is not compensated by a specific benefit. Therefore, new capital intensive projects are now more and more considered as LNG production and GTL schemes. It can be considered that about 30% of the associated gas reserves are stranded.
Gas to liquids technology is the chemical conversion of the natural gas into liquid fuels by use of many available technologies. The method provides premium liquid fuels that burns cleaner and sells higher than the conventional crude oil fractions.
The choice of GTL is this study because LNG has been existing and is capital intensive. The use of mini-GTL technologies to capture and process stranded gases that otherwise were candidate for flaring forms the basis of this research work.
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