Natural Gas Hydrate: An 'Emerging Resource' Finally Emerges
Natural gas hydrate (NGH), a crystalline compound of water and natural gas, has been recognized as a vast potential energy resource for over two decades, but its commerciality has persistently remained beyond the horizon due to technical and economic hurdles.
Drilling and evaluation programs conducted during the past decade, however, have clarified the path forward, and commercial production from NGH is now anticipated for Japan within a few years.
NGH forms under the appropriate conditions of pressure and temperature (figure 1) when there is sufficient natural gas flux. The pressure/temperature conditions for gas hydrate stability are present in sediments along every continental margin in the world and in sediments in permafrost regions.
The first question about commerciality that needed to be answered involved the size and occurrence of producible NGH deposits. Most NGH occurs in shales where it comprises only 1 to 5 percent of the sediment volume. As such, the NGH in shales is not an energy resource.
In contrast, NGH can fill over 80 percent of the porosity in sands.
NGH Potential
Evaluation programs in the Gulf of Mexico, North Slope of Alaska, Japan, India and South Korea have logged and cored NGH-bearing sands, calibrated seismic methods for predictive models and provided critical information to define the NGH petroleum system.
These programs have involved the combined efforts of several oil companies, service companies, government agencies from the nations involved and many universities. Critical funding and technical guidance has come from the U.S. Geological Society, Minerals Management Service/Bureau of Ocean Energy Management and the U.S. Department of Energy.
In 2008 the MMS published a detailed evaluation of the NGH resource potential of the Gulf of Mexico, with a mean estimate of 6,717 trillion cubic feet (TCF) of gas present in sandstone reservoirs. The same year, the USGS published an assessment of the technically recoverable NGH potential for the North Slope of Alaska with a mean estimate of 85.4 TCF. The Japanese national NGH program (MH21) released a figure of 1.1 trillion cubic meters (39 TCF) gas in sands within the Nankai area.
These volumes were very encouraging but were limited to relatively small portions of the world.
As part of the Global Energy Assessment undertaken by the International Institute for Applied Systems Analysis (IIASA), a comprehensive evaluation of NGH potential was conducted that assessed every continental margin, worldwide. This 2001 evaluation integrated geological models of likely sand distribution, interpretations of gas hydrate stability conditions and estimates of gas flux.
Given the limited data available for the evaluation, the results covered several orders of magnitude, with a median value of 43,311 TCF gas in place in sandstone reservoirs.
This assessment may have been overly conservative, as the BOEM published an assessment for NGH in the Atlantic in 2013 with a mean estimate of 15,850 TCF in sandstone reservoirs.
Economic Factors
Defining the magnitude of the resource is an important step in the path to commerciality, but for commercial development to proceed, prospect evaluation factors must be understood. These include the same issues as with any gas development: production rates, decline rates, ultimate recovery per well, capital expense (CAPEX) and operating expense (OPEX).
These factors are complicated by the requirement that NGH, a solid material, be converted (dissociated) to gas in the subsurface prior to production. This may be accomplished by any of several methods including depressurization and thermal stimulation. Every dissociation method entails an energy cost that factors into economic evaluations.
In March 2013, Japan conducted a drillstem test at Nankai, sustaining a rate of 700,000 cubic feet/day for six days with dissociation achieved with a downhole electric pump. Extended tests are planned for 2016 and 2017. Commercial production is anticipated within a few years and India may follow soon after.
The Nankai results will answer many of the questions about production rates, production declines and OPEX. Current models indicate that production from NGH reservoirs may attain reasonably high production rates and maintain those rates for years or even decades. But the issue of CAPEX also must be addressed for NGH to move forward as a viable commercial energy resource.
Even with high production rates and low OPEX, the use of current deepwater drilling and production systems makes NGH commercially unrealistic, except by those nations willing to pay a premium for energy security.
Given that the NGH resource occurs in sediments within the upper kilometer beneath the seafloor, the high-capacity systems used in deepwater operations are not needed. New technology is emerging that uses lighter materials, seafloor-based facilities and ROVs. These have the potential to bring the economics of NGH development in line with other gas resources.
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Much is going on in the field of natural gas hydrate. To stay informed as development continues to move forward, the Energy Minerals Division website will have information available for EMD members – and EMD membership is free for AAPG members.
Join and check out information on all of the EMD commodities:
- Shale Gas and Liquids.
- Bitumen/Heavy Oil.
- Oil Shale.
- Tight Gas Sands Coalbed Methane.
- Coal.
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