Technology Update The associated gas that accompanies oil to the surface in a producing well can be a great advantage and valuable revenue stream, if your oil field is near a pipeline that feeds into a gas market. However, as oil fields move into deeper and more remote areas, away from population centers and gas infrastructure, the options for handling associated gas have become restricted and the question of what to do with it often difficult. The industry is crying out for a solution. Historically, where there was no local market or available pipeline, associated gas was flared. However, this is now both environmentally and politically unacceptable, and in many countries banned. The alternative of gas reinjection is expensive and can cause reservoir damage, which adversely affects production and reserves. Seeking a solution that avoids either of these alternatives, the industry for years has experimented with a variety of technologies. For example, in areas with large associated gas volumes, the gas can be commingled into gathering systems and supply nearby specially constructed liquefied natural gas (LNG), methanol, or ammonia plants. However, this solution comes with a couple of major requirements.High gas volumes must be com-mitted in advance to justify the substantial plant-building cost.Commonly, supplementary nonassociated gas also must be available to offset supply fluctuations, including the eventual decline of field production. One example of how this supply-balancing requirement can work is the Bonny Island LNG plant in Nigeria, which ran on nonassociated gas until gathering systems were built that allowed associated gas to replace part of the original supply stream. Without both of these prerequisites, commingling is not an option. With oil fields getting smaller and more remote, there will commonly not be sufficient reserves of associated gas to justify installing gas infrastructure or gas-processing plants. Even in areas such as the North Sea, where extensive gas infrastructure and a ready local market exist, small fields with short lives of 4 years or so cannot justify the expense of installing a gas export pipeline. Other solutions proposed for dealing with associated gas that cannot be exported by pipeline have involved locating a gas-processing plant adjacent to the oil field and using technologies such as floating LNG, gas-to-liquids (GTL), methanol production, or gas-to-wire electrical power generation. These too tend to require large supplies of gas and considerable investment. For example, a standalone facility capable of consuming 100 to 150 MMscf/D of gas would have a capital expenditure of more than USD 1 billion. In addition, a facility would need a steady nondeclining gas stream, which often can only be achieved by combining associated gas with nonassociated gas from other fields. As such, this has led to these large facilities focusing on stranded gas with reserves of 0.5 Tcf or greater, rather than associated gas.
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