Future Gas Supply Research Articles

Planning natural gas supply chain pathways for energy system decarbonisation: An Australian case study

The future role of natural gas systems in a deeply decarbonised world is very uncertain. This work seeks to characterise the changes that the clean energy transition is likely to induce in the natural gas chain, across extraction and transmission, distribution networks and gas consumption/use trends, for various scenarios with different demand and supply drivers. First, the results of a least-cost macro-scale energy system planning optimisation are explored to identify future natural gas demand and supply requirements. Second, those findings are used as inputs to a detailed analysis of the full gas supply chain, from extraction to final use, to examine the evolution of i) stored resource levels; ii) transmission and distribution networks operation and financing; and iii) required capacity and siting of gas generation; all, with a realistic account of the related infrastructure. Australia is investigated as a case study that relies on natural gas for both domestic and export purposes. Results project a shift towards a more localised gas consumption to be largely supplied by fewer basins, with associated potential transmission and extraction bottlenecks. They anticipate an overall less utilised, ageing distribution network with potential challenges to asset reliability and financing. Finally, they demonstrate both the scheduled and early retirement of fossil generation assets can allow the siting of considerable amounts of new gas power firming capacity on brownfield sites, thus offering an opportunity to reduce total system costs.

Maximising production from the Gippsland Basin: integrating subsurface datasets across multiple disciplines to increase domestic gas supply

The Turrum Field in the offshore Gippsland Basin has been a significant gas contributor since first development in 2004 and remains a keystone gas resource in the basin. Much work continues to be done to both optimally deplete the current accessible reserves, and to evaluate reserves capture opportunities through additional drilling. A multidisciplinary team of geoscientists and reservoir, production and wells engineers was formed to re-evaluate how to maximise production from the Turrum Field. New seismic data, wireline surveillance, production and surface monitoring parameters were integrated with existing geological models. An enhanced understanding of the Turrum reservoir has emerged with a more informed view of future well work requirements for optimal depletion of the field. The integration of this new information along with enhanced seismic over the greater Turrum area has not only helped to optimise production from the existing wells, it is also supporting efforts to evaluate the potential to fund additional opportunities to optimise production from Turrum, increasing current and future gas supply to the domestic market. The key to success for this work was the integration of many disparate subsurface datasets and the willingness to test biases and challenge previous field development recommendations based on new data and ideas.

Shale gas resources across the world: A future source of energy

Unconventional natural gas resources are very important for ensuring energy security. It is a concern that conventional natural gas resources will be unable to meet growing supply requirements. This concern has prompted a scramble to secure long-term natural gas supplies. In a high oil and gas price environment, unconventional resources are viewed as important and economically attractive components of future natural gas supplies. Shale gas is natural gas produced from shale formations. Gas shales are organic-rich shale formations. Shale gas is a dry gas composed of methane. Various factors which have contributed to its rapid development are mainly advancements in horizontal drilling, hydraulic fracturing, and, perhaps most importantly, the rapid increase in natural gas prices in the last several years as a result of significant variation in supply and demand. India has a high potential for shale reserves. According to the available data, a comprehensive shale gas pilot project carried out in the Damodar Valley Basin has made an initial gasin- place estimate of 300 to 2,100 trillion cubic feet (TCF) in Indian shale gas basins, which is around 300 times higher than the Krishna Godavari Dhirubhai 6 (KG-D6) basin, by far the largest gas field in the country. In this paper, a brief review of shale gas reserves across the world and their government policies has been explained.

Super basins—New paradigm for oil and gas supply

Super basins are sedimentary basins with more than 5 billion BOE cumulative production and at least 5 billion BOE remaining recoverable resources. Super basins are characterized by two or more source rocks, stacked reservoirs, mature infrastructure, established service sectors, large amounts of data, and access to markets. Super basins commonly have multiple operators that form a community whose competitive atmosphere helps drive efficiency and performance. In an effort to identify sources for future oil and gas supplies, studies of the geology, hydrocarbon richness, and above-ground factors for 400 global basins led to the super basin concept. Super basins have continuous organic-rich mud rocks and other tight reservoirs that heretofore were not considered commercial targets. Based on analogy with proven resource plays in North American super basins, it is now possible to unlock substantial hydrocarbon potential in these tight rocks by employing horizontal drilling and multistage fracturing technologies. Super basins exist both onshore and offshore. The largest super basins are onshore, dominantly in forelands and passive margins, and have both conventional and tight rock potential. This paper focuses on the top 25 onshore super basins that are estimated to have 859 billion BOE of incremental technically recoverable resources. Offshore basins do not have the massive tight rock potential as onshore basins because of higher infrastructure costs. The archetype for the onshore super basin is the Permian Basin (west Texas) with 37 billion BOE produced and 60 billion bbl of oil and 300 TCF gas remaining. With huge resources, super basins can serve as supply disrupters and act as a regulator for the global price of crude oil and natural gas. Super basin concepts have caused geoscientists to think differently about petroleum basins. Super basins should be viewed as ecosystems that have below- and above-ground questions and technology and market considerations that must be resolved to assure commercial success.

Energy and Environmental Contributions for Future Natural Gas Supply Planning in Brazil

Natural gas has become a strategic source of energy, despite its technical and economic benefits, largely due to its lower environmental impacts compared with other fuels. Given this scenario, Brazil has increased the availability of this resource to meet the demand of more interior regions and increases its autonomy with respect to this fuel. The aim of this study is to evaluate the environmental impacts of current and future natural gas supply situations in Brazil. To this end, the life cycle assessment (LCA) technique is applied, with a cradle‐to‐gate approach for the climate change (CC) and primary energy demand (PED) impact categories. For the current scenario, the main contributions to CC occur in the form of CH4 emissions during gas transportation operations (crude or refined) and resource withdrawal from reserves. For future supplies, the applied analysis identifies transport distance as an important PED focus, whereas the same parameter and the distributed volume of refined gas are noteworthy as impact sources concerning CC.

Modelling cost-effective pathways for natural gas infrastructure: A southern Brazil case study

Currently, natural gas in Brazil represents around 12.9% of the primary energy supply, with consistent annual growth during the last decade. However, Brazil is entering a time of uncertainty regarding future gas supply, mainly as import from Bolivia is being renegotiated. As such, diversification of gas supply sources and routes need to be considered. Energy systems and infrastructure models are essential tools in assisting energy planning decisions and policy programmes at regional and international levels. In this study, a novel combination of a simulation-based integrated assessment model (MUSE-South_Brazil) and the recently-developed Gas INfrastructure Optimisation model (GINO) is presented. The Brazilian region represented by the five southern states served by the Bolivian gas pipeline (GASBOL) has been investigated. Modelled projections suggest that regional gas demand would increase from 38.8 mcm/day in 2015 to 104.3 mcm/day by 2050, mainly driven by the increasing demand in the industry and power sectors. Therefore existing regional gas infrastructure would be insufficient to cover future demands. Three different renegotiation scenarios between Brazil and Bolivia were modelled, obtaining distinct cost-optimal infrastructure expansion pathways. Depending on the scenario, the model expects gas demand to be covered by other supply options, such as an increase in pre-salt production, LNG imports and imports from a new Argentinian pipeline.

Australia's unconventional future: where next?

Eastern Australia is now reliant on coal-seam gas (CSG) for its domestic gas supply; in 2018, it accounted for two-thirds of total eastern coast gas production. Australia has seen a rapid transition from relying on ‘conventional’ resources to relying on ‘unconventional’ gas supply. As legacy conventional supply sources mature and decline, exploration has been insufficient to keep up with market demand. This has created the opportunity for Australia’s vast CSG resources to fill the gap. But the development of CSG has been neither easy nor straightforward. And the costly requirement to drill hundreds, if not thousands, of wells in every single development has driven up the cost of supply. Most CSG reserves will be produced for the Pacific Basin LNG market via the three LNG projects on the east coast of Queensland. However, it is the resources beyond these LNG projects that will need to be developed, so as to ensure future supply to the east coast gas market. It is these other resources, both CSG and shale, that we evaluated to gain a picture of future gas supplies and costs. Our indicative economics showed that alternative CSG resources and Beetaloo shale both have high well-head break-even costs. In addition, the infrastructure required to get them to market will be expensive. The high costs, coupled with the demand from the LNG plants of Gladstone leads us to conclude that eastern-coast gas prices are likely to remain closely linked to global LNG prices for the foreseeable future.

Gas and electricity supply implications of decarbonising heat sector in GB

The increasing decarbonisation of the power and heat sectors in Great Britain poses numerous uncertainties about the future of the gas network. An optimisation model was developed for investigating the operation of future low carbon electricity, gas and heat supply systems. The model was employed to quantify the impacts on the operation of the gas network in Great Britain of transitioning to low carbon power and heat. The modelling results show that the decarbonisation of the power and heat sectors affects the operation of the high and low pressure gas networks differently. A highly electrified heat sector, only slightly changes the gas load duration curve for the high pressure gas transmission network, but significantly affects the load duration curve for low pressure gas distribution networks. In addition, in a future energy system with a large capacity of variable wind and solar generation, and highly electrified heat supply, although the annual volume of gas supply decreases, the peak gas supply during low wind and cold spells remains the same or even exceeds the current figure. This is mainly due to gas-fired power plants operating to their maximum capacity to complement the wind resource and also supply electricity for heat pumps.

A System Dynamics Model for Analyzing Future Natural Gas Supply and Demand

This paper models a natural gas supply and demand system using a system dynamics approach to determine whether current policies for a given country will sustain its long-term natural gas demand. Th...

Analysis of Energy Return on Investment of China’s Oil and Gas Production

China ranks No.1 and No.3 respectively in global oil and gas consumption. Examination of viability of oil and gas resources could provide useful information in gauging economic vulnerability of future oil and gas supply in China. Energy Return on Investment (EROI) is an important index to characterize the viability of a natural resource from an energy viewpoint. This paper calculates EROI for oil and gas exploration (EROIOGE) and EROI for light oil products (EROILOP) in China. The results show that the EROIOGE decreased from approximately 16.4 in 1985 to 8.4 in 2003, and then increased to 12.2 in 2012. The EROIOGE in recent years are due to the increasing of gas production. As a trade-off between the decrease of oil extraction efficiency and the increase of oil processing efficiency, the EROILOP fluctuated around 4. The results suggest that China should develop the natural gas industry and improve the oil processing efficiency vigorously.

Radical disruption – renewables, technology and the arrival of ‘peak gas'

Debate on the timing of peak oil has become mainstream, as shifting energy demand patterns are compounded by the accelerating threat from disruptive technology such as EVs. At the same time, natural gas demand is seen as a beneficiary of these changes – the much-vaunted transition fuel to a low carbon future. But what might happen to long-term gas demand when factors that could radically reshape energy markets become entrenched? Improvements in energy efficiency, growth in renewables, major advances in energy storage technologies and access to decarbonised electricity are now raising the prospect of ‘peak gas’. In this paper, Wood Mackenzie presents an examination of the key uncertainties impacting the future of gas demand globally, including: • How quickly can technologies such as batteries and storage be developed and what constraints might they face? • Could environmental policy and falling costs mean we are currently underestimating the future growth in renewables – specifically wind and solar power? • How are oil and gas companies responding to the challenges that lie ahead? The impact of these developments will be critical for gas and liquefied natural gas (LNG) producers as they assess the timing, returns and demand for future gas supply. Indeed, for Australian developers these uncertainties could be enough to stop multi-billion-dollar LNG projects taking final investment decisions as early as the 2020s. Wood Mackenzie argues that the time for companies to address peak gas is now – the dynamics of marginal change will likely mean markets will be reshaped sooner than the industry is currently prepared to acknowledge.

Australian onshore petroleum acreage and releases 2017

This paper is a compilation of material from state and territory jurisdictions regarding onshore acreage and its availability for petroleum exploration in 2017. Australian state and territory governments continue to support investment in the petroleum industry through the provision of acreage for exploration, which is promoted nationally and internationally. Updates are provided on recent upstream developments and government initiatives. Present and future policy directions that relate to onshore petroleum exploration are described, particularly for jurisdictions that are not making land available this year. When the APPEA conference was last held in Perth, in 2014, the oil price and exploration outlook were very different from today. In 2016, the petroleum industry experienced the full impact of the downturn, with the price for oil reaching a low of under $27 USD/barrel (WTI) early in the year. Several companies departed the onshore, exploration was at a fifteen-year low and much acreage has been surrendered across Australia. However, 2017 is showing signs of improvement with oil prices in the mid-50s and some hope that the industry will turn the corner this year. Low levels of exploration activity may have implications for future domestic gas supplies, and rising gas prices are of concern to local manufacturing industries and consumers throughout Australia. However, this may present marketing opportunities for successful explorers.

Canadian Arctic Offshore Oil and Natural Gas and European Union Energy Diversification: Towards a New Perspective?

Events shape and in turn are shaped by developments in Arctic ocean policy. Nowhere is this truer than of the ever-changing Arctic environment, which is in turn shaping and being shaped by a global demand for secure sources of future oil and natural gas supplies. As the polar ice cap progressively shrinks, and industry interest in the Arctic quickens, Canadians are confronting the challenges of developing their Arctic hydrocarbon resources. In Canada these conflicting objectives have led to innovative regulatory policies accommodating stakeholder desires on the one hand and environmental and economic considerations on the other. The European Union (EU) similarly has multiple objectives intersecting with its Arctic interests.

Hydrocarbon Production Scenarios in Colombia. Review of Field Sizes, Hydrocarbon Reserves and Expectations of Conventional and Unconventional Resources.

<div class="page" title="Page 1"><div class="section"><div class="layoutArea"><div class="column"><p><span>The present research work examines three aspects of great importance for the future supply of oil and gas in Colombia. 1) The geographic and stratigraphic distribution of hydrocarbon resources for use in estimations of the contribution </span><span>of different field sizes to the total supply of oil and gas in Colombia. 2) The current state of the hydrocarbon reserves in Colombia and factors that influence their increase or decrease; statistical tools are used to calculate the volume of hydrocarbons that may be found in the future. 3) The observed decline of hydrocarbon production in Colombia, </span><span>which is used to estimate the amount of resources that may be extracted in the future once peak production has been </span><span>reached. Based on these three aspects, we constructed different scenarios to forecast the potential production of oil and gas in Colombia. In addition, we calculated the amount of hydrocarbon reserves in these scenarios. </span></p><p><span><br /></span></p><p><strong>Resumen</strong></p><div class="page" title="Page 1"><div class="section"><div class="layoutArea"><div class="column"><p><span>El presente trabajo resume tres aspectos considerados de gran importancia para el futuro suministro de petróleo y </span><span>gas en Colombia. Estos son: 1) La distribución ¿geográfica y estratigráfica? de los recursos hidrocarburiferos como </span><span>herramienta para conocer la contribución de los diferentes tamaños de campo a la producción total de hidrocarburos </span><span>en Colombia; 2) El estado actual de las reservas de hidrocarburos en Colombia y los factores que inciden en el incremento o disminución de las reservas, que son dos asuntos temas que inciden en el futuro suministro de estos recursos. Al respecto, por medio de herramientas estadísticas se calcula el volumen de hidrocarburo que puede ser encontrado en el futuro. 3) Las tasas de declinación en la producción de hidrocarburos observados observadas en Colombia, permiten modelar los recursos que pueden ser recuperados en el futuro una vez alcanzados los picos de producción. Bajo esta hipótesis, se construyen diferentes escenarios que resumen pronostican la posible producción de petróleo y gas en Colombia para los próximos años, además se calculan las reservas de hidrocarburos para los </span><span>mismos escenarios. </span></p></div></div></div></div><p><strong><br /></strong></p></div></div></div></div>

Assessing the Influence of Shale Gas Boom on China’s Power Sector and Environmental Policy by Modeling

As the U.S shale gas revolution evolved, there was a growing expectation that this can be replicated in China. Power sector, as the biggest contributor to China’s primary energy consumption and CO2emission, is faced with tremendous pressure and challenge. Shale gas resource will be a big opportunity for power sector to alleviate energy shortage and emission problem. This study is trying to figure out to what extent will future large gas supplies improve China’s energy structure and under which policy will the change be more efficient and cost-effective. Regarding the task, two scenarios are set up here: Base Case, Coal price rising and carbon emission control scenario. Based on the comparison of these scenarios, detailed conclusions for policy decision are drawn up.

US shale gas production outlook based on well roll-out rate scenarios

This study models the uncertainty range in the future gas production output from US shale plays up to 2025. The future spread in gas output in our models follows from variations in the number of wells that will be drilled according to three distinct scenarios. Each scenario assumes a well development plan for the six major shale plays over the studied period and then quantifies the cumulative US production output from the combined shale plays. We compare the bottom-up model results with other model projections for future US shale gas output, including the top-down shale gas production forecasts by the US National Energy Modeling System (NEMS). The remarkable growth of North American gas output from unconventional resources has been highlighted in numerous industry reports and government publications, but what has remained relatively underexposed is the deterioration of economic margins due to the failure to predict the gas price decline in the North American market. The past development record of North America’s shale gas resources suggests that security of future gas supplies seems ensured, but here we develop a contrarian view. Our scenario models take into account the effect of recent declines in gas rig counts and decline in gas well completions due to the depressed gas prices. A scenario with declining shale gas output – one of three scenarios considered – cannot be excluded as being unlikely to occur, which means the future security of US gas supply that assumes a steady growth of shale gas supply cannot be ascertained at present.

The Arctic: No big bonanza for the global petroleum industry

Petroleum companies and Arctic states are carefully watching the sea ice withdrawal and the future access to petroleum resources in the Arctic. We raise the question if the global market for petroleum will actually keep the door open for substantial supply of oil and gas from the Arctic, a region with almost a quarter of global undiscovered petroleum resources, but at high costs and long lead times. This makes future Arctic supply highly dependent on oil and gas prices, influenced by future supply of unconventional oil and gas and also by huge amounts of conventional gas in the Middle East coming on stream. We study the oil and gas supplies from 6 Arctic regions during 2010–2050 using the FRISBEE model of global oil and gas markets, based on Arctic resource estimates from the U.S. Geological Survey.Following the IEA reference oil price assumption, we find that even if almost a quarter of the world's undiscovered petroleum is situated in Arctic basins, the future share of global production will only be 8–10% in our reference scenario. Although a major part of the undiscovered Arctic resources is natural gas, the relative importance of the Arctic as a world gas supplier will decline, while its relative importance as a global oil producer might be maintained. Less undiscovered oil resources will have minor effect on total Arctic oil production and a marginal effect on Arctic gas extraction as Arctic Russia is the dominant petroleum producer with a sufficiently large stock of already discovered resources at relatively low costs to support their petroleum production before 2050.

The Impact of Recent Gas Market Developments on Long-Term Projections for Global Gas Supply

Production from unconventional resources, increases in upstream development costs and sluggish demand growth have significantly impacted the global natural gas market in the recent past; and will likely continue to do so during the next decade. Taking these developments into account, we provide a projection of global natural gas supply until 2030 applying the MAGELAN world gas model by the Institute of Energy Economics at the University of Cologne (EWI). Apart from presenting the results of this simulation, the focus of this paper is thereby on the effects of recent supply, midstream and demand side trends on future gas supply compared to earlier studies and projections. While lower demand growth generally leads to relatively less international gas trade, pipeline exports are affected more strongly than trade in liquefied natural gas. In terms of gas output, this volume effect is found to mainly affect high cost gas producers at the upper end of the supply curve. Exports of suppliers with lower production costs and abundant reserves actually benefit.

The state of natural gas

As global energy demand rises, natural gas now plays an important strategic role in energy supply. It is more difficult to transport and store gas than oil and consequently it lagged behind that commodity for a considerable period. Over the last couple of decades this has changed and gas markets continue to expand more rapidly than those of other fossil fuels. Natural gas is the cleanest and most hydrogen-rich of all the hydrocarbon energy sources and it has high energy conversion efficiencies for power generation. Of more significance is that gas resources discovered but as yet unexploited remain plentiful. The sector is poised for considerable growth over the next two decades and some believe that it may even overtake oil as the prime fuel between 2020 and 2030. The trend towards natural gas becoming the premium fuel of the world economy is not now easily reversible. The key and the challenge for the energy industry is how that transition is to be managed. We examine in this paper sources of natural gas, their limitations and potential. We also identify the technological and commercial challenges to be overcome in taking the world through the transition. There is a fundamental turn towards natural gas which today accounts for about 23% of the world energy demand. Large capital investments in infrastructure to enable increased gas consumption are being made on both demand and supply sides. Several gas-producing countries have embarked upon very ambitious plans for markedly increased gas output. Many new LNG facilities are being built supply chains diversifying and becoming ever more flexible. There is a growing recognition that unconventional sources of gas, such as shale gas, coal bed methane (CBM) and deep tight gas will contribute a significant component of future gas supplies as technologies evolve. Other gas conversion technologies such as GTL and CNG are attracting more serious attention, but energy efficiency, cost and cost inflation remain barriers for these promising alternatives. Natural gas is also competing strongly with other fossil fuels from an efficiency and emissions perspective as the fuel of choice for power generation. However, gas price volatility and security of supply concerns means that some power generators still favor coal and nuclear components in their power generation portfolio. As the cost of carbon emissions have a bigger impact around the world, gas has the potential to increase its share of the power generation market significantly over the coming decade. A rapid growth opportunity exists for natural gas in its potential contribution to transportation either directly or by electrifying the sector. Real and imagined environmental concerns and restricted access for OECD nations to long-term oil reserves are expected to accelerate the emergence of hydrogen fuel cells. Currently available technologies dictate that the most commercially viable source of hydrogen in large quantities is natural gas, particularly methane through the reforming processes that yield synthesis gas (i.e. carbon monoxide and hydrogen). Current technologies, investments and consumption trends suggest that natural gas will be at the center of a worldwide transformation resulting in a greatly expanded market share of gas in the energy mix for power generation, space heating, petrochemical feedstocks and transportation fuels (e.g. natural gas vehicles are now on the agenda for both energy efficiency and lower emissions reasons).

Future European gas supply in the resource triangle of the Former Soviet Union, the Middle East and Northern Africa

A steady increase of natural gas demand can be observed in Europe over the last decades. Due to the European obligation to reduce greenhouse gas emissions in the framework of the Kyoto Protocol, the trend toward natural gas is expected to continue in the future. The increased consumption is faced by comparably low indigenous gas resources within Europe, so that the dependency of Europe on gas imports from abroad will rise in the future. In addition to the existing supply sources Russia and Algeria, gas resources from the Middle East and the Caspian and the Central Asian regions may be supply options to cover Europe's gas demand in the future. Against this background, possible natural gas supply options as well as the transport infrastructure to and within Europe are discussed regarding their technical capacity and their costs. With the help of a cost-minimization model of the European gas supply system, the gas flows and the infrastructure capacity development up to the year 2030 are analyzed. In a sensitivity analysis, the impacts of demand variations on the choice of supply sources are studied.