Natural Gas Industry

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Natural Gas Terminology:

Reservoir: Porous & permeable underground formation containing an individual bank of H.C.s confined by impermeable rock or water barriers characterized by a single natural pressure system.

read also What is Natural Gas

Field: Area of one or more reservoirs related to same structural feature.

Pool: Contains one or more reservoirs in isolated structures.

Wells can be classified as gas wells, condensate wells, and oil wells.

Gas wells: Wells with producing gas-oil ration (GOR)>100,000 scf/stb.

Condensate wells: Producing GOR < 100,000 scf/stb but > 5,000 scf/stb.

Oil wells: Wells with producing GOR < 5,000 scf/stb

Because NG is petroleum in a gaseous state, it is always accompanied by oil that is liquid petroleum. There are 3 types of NG: nonassociated gas, associated gas & gas condensate.

Nonassociated gas: Gas from reservoirs with minimal oil.

Associated gas: Gas dissolved in oil under natural conditions in the oil reservoir.

Gas condensate: Gas with high content of liquid H.C. at reduced P & T.

Utilization of Natural Gas

–  Natural gas is one of the major fossil energy sources.

– Combustion of 1 scf of NG generates 700 → 1,600 Btu of heat, depending upon gas composition.

– NG provided close to 24% of U.S. energy sources over 2000-2002.

– NG is used as a source of energy in all sectors of the economy.

– Natural gas was once a by-product of crude oil production.

– Since its discovery in 1821 in U.S.A. in Fredonia, New York, NG has been used as fuel in areas immediately surrounding the gas fields.

– In the early years of NG industry, when gas accompanied crude oil, it had to find a market or be flared; in the absence of effective conservation practices, oil-well gas was often flared
in huge quantities.

Consequently, gas production at that time was often short-lived, and gas could be purchased as low as 1 or 2% per 1,000 ft3 in the field.

– Consumption of NG in all end-use classifications (residential , industrial, commercial & power generation) increased rapidly since World War II.

– This growth resulted from several factors, including:

– Development of new markets.

– Replacement of coal as fuel for providing space & industrial process heat.

– Use of NG in making petrochemicals and fertilizers.

– Strong demand for low-sulfur fuels.

– The rapidly growing energy demands of Western Europe, Japan & U.S.A. couldn’t be satisfied without importing gas from far fields.

– Natural gas, liquefied by a refrigeration cycle, can now be transported efficiently and rapidly across the oceans by insulated tankers.

– The use of refrigeration to liquefy NG, and hence reduce its volume to the point where it becomes economically attractive to transport across oceans by tanker.

– It was first attempted on a small scale in Hungary in 1934 and later used in U.S.A. for moving gas in liquid form Louisiana up the Mississippi River to Chicago in 1951.

– The first use of a similar process on a large scale outside U.S.A. was the liquefaction by a refrigerative cycle of some of the gas from the Hassi R’Mel gas field in Algeria and the export
from 1964 onward of the resultant liquefied natural gas (LNG) by specially designed insulated tankers to Britain & France.

– NG is in this way reduced to about 1/600 of its original volume and the non-methane components are largely eliminated.

– At the receiving terminals, LNG is re-gasified to a gaseous state, whence it can be fed as required into the normal gas distribution grid of the importing country.

– Alternatively, it can be stored for future use in insulated tanks or subsurface storages.

– Apart from its obvious applications as a storable & transportable form of NG, LNG has many applications in its own right, particularly as a nonpolluting fuel for aircraft and ground

– Current production from conventional sources is not sufficient to satisfy all demands for NG.

Natural Gas Reserves

– 2 terms are frequently used to express NG reserves: proved reserves & potential resources.

– Proved reserves: Quantities of gas that have been found by the drill. They can be proved by known reservoir characteristics such as: production data, pressure relationships  and
other data, so that volumes of gas can be determined with reasonable accuracy.

– Potential resources: Quantities of NG that are believed to exist in various rocks of the Earth’s crust but haven’t yet been found by the drill. They are future supplies beyond the
proved reserves.

– There has been a huge disparity between “proven” reserves and potential reserves.

– Different methodologies have been used in arriving at estimates of the future potential of NG.

– Some estimates were based on growth curves, extrapolations of past production, exploratory footage drilled & discovery rates.

– Empirical models of gas discoveries and production have also been developed and converted to mathematical models.

– Future gas supplies as a ratio of the amount of oil to be discovered is a method that has been used also.

– Another approach is a volumetric appraisal of the potential undrilled areas. Different limiting assumptions have been made, such as drilling depths, water depths in offshore areas,
economics & technological factors.

– Even in the case of the highly mature and exploited U.S.A., depending upon information sources, the potential remaining gas reserve estimates vary from 650 Tcf to 5,000 Tcf.

– Proved NG reserves in 2000 were about 1,050 Tcf in U.S.A. & 170 Tcf in Canada.

– On the global scale, it is more difficult to give a good estimate of NG reserves.

– Unlike oil reserves that are mostly (80%) found in Organization of Petroleum Exporting Countries (OPEC), major NG reserves are found in the former Soviet Union, Middle East, Asia
Pacific, Africa, North America, Southern & Central America, and Europe.

Types of Natural Gas Resources

– NG classified as: conventional NG, gas in tight sands, gas in tight shales, coal-bed methane, gas in geopressured reservoirs & gas in gas hydrates.

  1. Conventional NG: Either associated or non-associated gas.

Associated or dissolved gas is found with crude oil. Dissolved gas is that portion of the gas dissolved in the crude oil and associated gas (sometimes called gas-cap gas) is free gas in
contact with the crude oil.  All crude oil reservoirs contain dissolved gas and may or may not contain associated gas.

– Non-associated gas is found in a reservoir that contains a minimal quantity of crude oil.

– Some gases are called gas condensates or simply condensates. Although they occur as gases in underground reservoirs, they have a high content of H.C. liquids so they yield
considerable quantities of them on production.

  1. Gases in tight sands: Found in many areas that contain formations generally having porosities of 0.001 to 1 millidarcy (md).

– At higher gas permeabilities, the formations are generally amenable to conventional fracturing and completion methods.

  1. Gases in tight shales: The shale is generally fissile, finely laminated, and varicolored but predominantly black, brown, or greenish-gray.

– Core analysis has determined that the shale itself has up to 12% porosity, however, permeability values are commonly < 1 md.

– It is thought, therefore, that the majority of production is controlled by naturally occurring fractures and is further influenced by bedding planes and jointing.

– Coal-bed methane: methane gas in minable coal beds with depths < 3,000 ft.

– Although the estimated size of the resource base seems significant, the recovery of this type of gas may be limited owing to practical constraints.

– Geopressured reservoirs: In a rapidly subsiding basin area, clays often seal underlying formations and trap their contained fluids. After further subsidence, P & T of the trapped fluids
exceed those normally anticipated at reservoir depth.

– These reservoirs have been found in many parts of the world during the search for oil & gas.

– Gas hydrates: Snow-like solids in which each water molecule forms hydrogen bonds with the four nearest water molecules to build a crystalline lattice structure that traps gas
molecules in its cavities.

– Contains about 170 times NG by volume under standard conditions.

– Because it’s a highly concentrated form of NG and extensive deposits of naturally occurring gas hydrates have been found in various regions of the world, they are considered as a
future, unconventional resource of NG.

read also What is LPG?

Future of the Natural Gas Industry

– The 19th century was a century of coal that supported the initiation of industrial revolution in Europe.

– The 20th century was the century of oil that was the primary energy source to support the growth of global economy.

– Simmons (2000) concluded that energy disruptions should be a “genuine concern“. He suggests that it will likely cause chronic energy shortage as early as 2010.  It will eventually
evolve into a serious energy crunch.

– The way to avoid such a crunch is to expand energy supply and move from oil to NG and eventually to H2.

– NG is the fuel that is superior to other energy sources not only in economic attractiveness but also in environmental concerns.

– At the end of the last century, natural gas took over the position of coal as the number 2 energy source behind oil.

– In 2000, total world energy consumption was slightly below 400 × 1015 Btu. Oil accounted for 39%, while NG & coal provided 23 % & 22 %, respectively of this.

– It is expected that the transition from oil to NG must be made in the early 21 century.  This isn’t only motivated by environmental considerations but also by technological innovations
and refinements.

1. Natural Gas Engineering Handbook, Dr. Boyun Guo and Dr. AIi Ghalambor
2. Natural Gas, by Primož Potočnik.
3. Fundamentals of Natural Gas, Arthur J. Kidnay & William R. Parrish

Post Author: AONG manager

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