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Husky in forefront of CNG CEO points to compressed natural gas as one way to develop challenging Newfoundland environment; expects technology proposal in January Gary Park Petroleum News Calgary Correspondent
Husky Energy has placed the evolving technology for the marine transportation of compressed natural gas high on its list of options to unlock offshore Newfoundland’s natural gas.
President and Chief Executive Officer John Lau said feasibility studies now underway should give a “firm indication of what technology to use” by January 2005.
He told the Newfoundland Ocean Industries Association Oct. 7 that Husky is weighing the full range of alternatives to develop gas in the storm-tossed, iceberg-infested region, including CNG and liquefied natural gas.
“Most likely, under the current proposal, we may go along with CNG,” he told reporters after his speech.
Industry and governments have been actively exploring CNG and barge transportation as an alternative to undersea pipelines from offshore Newfoundland and Nova Scotia that are generally thought to be prohibitively expensive.
Although Nova Scotia is already pumping gas from its Sable field, Newfoundland has been more focused on its oil fields in the Jeanne d’Arc Basin than tapping into gas, most of which has been re-injected to sustain oil reservoir pressures, although the potential of the basin has been estimated at 24 trillion cubic feet and for all of the Newfoundland waters at 61 tcf. Husky has called for gas development But Husky, 72.5 percent operator of the White Rose oilfield, due to start operations no later than early 2006, stirred interest in gas last June when it called for proposals to develop White Rose gas to gauge the costs, technical and regulatory issues.
The White Rose reserve has been calculated at about 2.1 tcf and was tested four years ago at 30 million cubic feet per day under restricted flow conditions. It carries the added benefit of not being needed to maintain oil reservoir pressures.
Having received a strong response to that invitation, Husky moved to the next stage by asking for more detailed plans.
It expects to decide within two years how to advance the plans, although Lau said it will take up to 10 years to achieve commercial production, depending on the regulatory approach taken by governments.
The interest in Newfoundland gas comes as researchers are making solid progress on CNG technology and the associated use of barges.
A study by David Engineering for the Canadian and Newfoundland governments concluded that specially-designed ships delivering CNG to markets could overcome the region’s severe operating conditions.
The Newfoundland government welcomed those findings including a recommendation to establish a CNG center of excellence in the province to conduct more detailed research. TransCanada studying CNG Meanwhile, TransCanada has launched its own studies into ways of carrying CNG by ship over distances of 1,500 miles.
That would involve the use of steel and glass fiber hybrid pressure containers known as gas transportation modules that could be stacked on barges, trucks or rail cars.
In 2003, Robert Jones, TransCanada’s director of natural gas development, said disused single-hulled oil tankers could be converted into barges capable of shipping as much as 100 million cubic feet per day and be operated safely anywhere on the East Coast.
He indicated that a pilot project could open the door to starting such a service by 2007.
Michael Economides, a chemical engineer at the University of Houston, told a Newfoundland conference this year that CNG, by eliminating liquefaction and regasification plants, sharply lowers the capital costs.
Houston-based EnerSea is working on one CNG system that it estimates could be one-tenth the cost of an onshore liquid or regasification plant.
Steve Henley, vice president of AMI Group, which has partnered with EnerSea, believes these advances in CNG technology could see Newfoundland gas come on stream by 2010.
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