Strategies for Development
Sunlink Petroleum Limited, Lagos, Nigeria
Nigeria currently ranks 7th in the world in natural gas reserves but a substantial amount of the gas is flared and, in spite of recent gas development projects, the country is still one of the nations flaring the most gas. Stranded gas generally, may be described as any gas resource that is uneconomic to monetize at the time. This includes flared associated-gas; certain re-injected gas; ‘stranded’ gas caps, which are not accessible until much after the production of oil; remote gas reserves which are difficult or costly to access; and small gas reserves whose volume are considered as non-commercial. About 40% of the Nigeria’s total proved gas reserves have been reported as not available in the short-term as these exist as stranded gas caps. In addition, sizable amounts of non-associated gas reserves, which are considered available in the short-term, are but located in remote offshore, and often in numerous and sparse distributions. This scenario of gas reserves location and distribution poses accessibility and economic challenges.
The cost of gas gathering, conditioning and export facilities constitutes a major component of total field development cost, particularly for remote field development opportunities. Therefore selection of appropriate and cost-effective development concept is important in determining the commerciality of a field development opportunity. A number of concepts for gas transport and processing are available. However the overall viability of a gas project depends on technical as well as commercial, legal and regulatory factors.
This paper discusses the issues, constraints, trends and prospects for the economic development of stranded gas reserves, whose volumes and location are often considered as non-commercial and remote. It identifies the challenges, expounds the opportunities and explores strategies for effective resource gas utilisation.
Key words: gas, stranded, reserves, development, opportunity.
Nigeria’s current proved natural gas reserves are approximately (182 TCF), making the country’s gas reserves the 7th largest in the world. The gas quality is high, without sulphur, low in CO2 and rich in liquids (condensate) content. However, substantial amounts of the gas are still flared and the country is still among the nations flaring the most gas. Stranded gas generally may be described as any gas resource that is uneconomic to monetize. The set of stranded gas therefore encompasses flared associated-gas; gas that are re-injected purely for regulatory compliance, rather than for reservoir pressure maintenance; gas caps, which are not accessible until much after the production of oil; remote gas reserves which are difficult or costly to access; small gas reserve volumes, which are considered non-commercial for development. About 40% of Nigeria’s total proved gas reserves have been classified as stranded gas caps, which are not accessible in the short-term (A. L. Yar’adua, 2007). In addition, there exists a sizable amount of non-associated gas reserves which are located in remote offshore locations, often in numerous but sparse deposits. This set of stranded gas have been considered as available in the short-term, however economics of field development limits the prospects of their availability in the near-term.
To ensure commerciality of stranded gas development opportunities and consequently achieve the goals of the Nigeria Gas Master Plan, germane development strategies that address the remote stranded gas challenge is imperative. These challenges and issues are highlighted in this paper. It is discussed, the trends and prospects for the economic development of stranded gas reserves whose volume and location are often considered as non-commercial and difficult for development. Finally, some strategic policy...