Newfoundland explores CNG for offshore natural gas

Gary Park

Petroleum News Calgary correspondent

The Newfoundland government is weighing four options for using compressed natural gas to exploit gas resources in its iceberg-studded, storm-buffeted offshore.

A joint study with the Canadian government, completed by David Engineering and Associates, evaluated four proprietary compressed natural gas technologies as alternatives to pipelines and liquefied natural gas for stranded offshore gas.

Newfoundland Energy Minister Walter Noel said that based on the findings his government will explore all technologies to ensure development of its gas “sooner rather than later.”

The study explored compressed natural gas systems proposed by EnerSea Transport, Williams Energy, TransOcean Gas and TransCanada.

Noel said the study found “all systems were well developed to be used on the Grand Banks (offshore Newfoundland) and worldwide.”

He said Davis Engineering recommended that the proponents should establish a CNG Centre of Excellence to undertake more detailed studies. Compressed natural gas has been promoted as a technological answer for companies with offshore gas discoveries that lack the reserves to justify the costs of building an undersea and onshore pipeline infrastructure.

Faced with a downturn in its offshore oil sector, Newfoundland is turning its attention to its untapped gas prospects.

Estimates by the National Energy Board suggest there could be 45 trillion cubic feet, although the current total sales volume is calculated at only 5.34 tcf, which some experts have projected is at least 2.4 tcf short of the economic threshold needed to produce 1 billion cubic feet per day over 15 years. Noel’s predecessor, Lloyd Matthews, called earlier this year for the industry to develop his province’s gas by 2007, a target that many deem to be at least five years too soon.