Feasibility of Using Small-Scale GTL Plants To Mitigate Flaring in North Dakota Evaluated

Abstract

This article, written by JPT Technology Editor Judy Feder, contains highlights of paper SPE 195209, “Evaluation of Small-Scale Gas-to-Liquid Economic Feasibility To Mitigate North Dakota Flaring Issues,” by Pascoela da Silva Sequeira and Rouzbeh Ghanbarnezhad Moghanloo, SPE, University of Oklahoma, prepared for the 2019 SPE Oklahoma City Oil and Gas Symposium, 9–10 April, Oklahoma City, Oklahoma, USA. The paper has not been peer reviewed. Booming shale gas production in the United States has created excess capacity, which has caused natural gas prices to plummet and significant percentages of production to be flared. On the other hand, the country’s imports of crude oil and its production of diesel, gasoline, and other products is increasing. Mitigating this situation depends on finding practical, economical, and efficient ways of making natural gas marketable. A potential solution is small-scale gas-to-liquids (GTL) plants. The complete paper describes a Monte Carlo simulation approach and field analysis showing that a small-scale GTL plant in North Dakota could be a profitable solution to mitigating the state’s current flaring rate of 35% of the natural gas produced. Introduction The shale gas revolution has negatively affected natural gas prices. According to the US Energy Information Administration, dry natural gas production in the US will increase through 2050 by 59%, from 73.6 Bcf/D in 2017 to 118 Bcf/D in 2050, and the price of natural gas will remain lower than $6.00/MMBtu throughout the same period, causing producers to vent and flare excessive gas. In 2017 alone, the total natural gas flared in the US was approximately 335 Bcf, according to the World Bank-led Global Gas Flaring Reduction Partnership. Most intense natural gas flaring occurs in fields that are far from consumers and transportation infrastructures such as interstate pipelines. Some of the heaviest flaring comes from the Bakken Field in North Dakota. While most of the natural gas consumers in the US are located along the East coast, the Bakken’s distance from the seaboard makes transportation of the produced natural gas difficult. Natural gas production in North Dakota reached a record high of 1.94 Bcf/D in August 2017, and as a result of the lack of infrastructure to collect, gather, and transport it, more than 35% of the gross withdrawals were flared rather than marketed. By October 2018, production had increased to 2.04 Bcf/D, with 20%, or 527 MMcf/D, flared. According to the North Dakota Pipeline Authority, 80% of the flared gas came from the wells that connected to pipelines, but where capacity was insufficient to capture all of the production. The other 20% was from the wells that were not connected to a pipeline. North Dakota’s Industrial Commission has established a target to limit natural gas flaring to 10% by 2020. The fundamental problem is not the technical aspect of natural gas production, but determining a way to market natural gas that is practical, economically feasible, and efficient. One option for marketability would be to convert natural gas into hydrocarbon liquid through a GTL processing plant.