Techno-economic forecasting of a hypothetical gas hydrate field in the offshore of India

Abstract

Abstract The National Gas Hydrate Program 01 Expedition (2006) and the National Gas Hydrate Program 02 Expedition (2015) have established the presence of large deposits of gas hydrates in deep-water areas offshore India. This paper presents the results of a techno-economic study carried out for the development of a hypothetical gas hydrate field in the Krishna-Godavari (KG) Basin located along the eastern margin of India. Standard industry approaches have been used to carry out capital cost and operational cost estimates. Based on initial reservoir simulation modelling results, three cases have been considered to encompass the possible range of reservoir production responses. In the first case, 18 MMSCMD of gas is envisaged to be produced from 120 wells for a production period of 10 years. In the second case, 12 MMSCMD of gas is envisaged to be produced from the 120 wells for 16 years. In the third case, 6 MMSCMD of gas is envisaged to be produced from the 120 wells for 30 years. The production rates assumed in Case 3 best represents what is believed to be the most reasonable production rates as modeled for a gas hydrate accumulation (NGHP-02 Area B; Site NGHP-02-16) drilled during NGHP-02. For Case 1, an initial determination is that field development is economically viable for prevailing gas price of USD 7.67/MMBTU with NPV of 1921 MMUSD and IRR of 27.87% with a cost of production of USD 4.74/MMBTU. For Case 2, the study indicates that field development is viable with NPV of USD 986 MMUSD and IRR of 20.27% and cost of production of USD 5.8/MMBTU. For Case 3, the cost of production is USD 9/MMBTU. No production data is available for the gas hydrate accumulations discovered during NGHP-02 in the offshore of India; therefore, these techno-economic results generated in this study can only be validated after matching the results from future pilot production testing under actual field conditions.