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June 2004

Vol. 9, No. 25 Week of June 20, 2004

Can gas hydrates become part of North Slope gas portfolio?

Collaborative work by BP Exploration (Alaska) and the U.S. Department of Energy aimed at assessing potential of unconventional resource

Kristen Nelson

Petroleum News Editor-in-Chief

Gas hydrates are the one unconventional natural gas resource that has not yet been proved economic, but a collaborative project by the U.S. Department of Energy and BP Exploration (Alaska) could move Alaska North Slope gas hydrate research into a test phase at the Milne Point unit.

But the project isn’t there yet, says Bob Hunter of ASRC Energy Services. Hunter, formerly with BP Exploration (Alaska), updated the Alaska Geological Society in early May on phase 1 of the project, due for completion this October.

Phase 1 is a desktop study, he said, and only if results are positive from that phase would the study move on, with a possible test project in phase 3 in 2006.

Gas hydrates — natural gas combined with water in a clathrate structure — have been known on the North Slope since the 1970s, Hunter said, and the U.S. Geological Survey “has led hydrate research on the North Slope for over two decades.”

In a spring 2004 DOE newsletter Hunter said Timothy Collett of the USGS has estimated that there may be as much as 590 trillion cubic feet of natural gas trapped in clathrate hydrates on the North Slope, with an estimated 44 tcf to 100 tcf of that resource under existing North Slope infrastructure.

While gas hydrates are not a priority for BP worldwide, Hunter told the Alaska Geological Society, BP Exploration (Alaska) is interested because of the potential for gas hydrates under existing fields.

Most technically and economically challenged

“Gas hydrates do have the best storage capacity of all unconventional gas resources, but they are also the most technically and economically challenging,” Hunter told the society, and he noted they are the only unconventional gas resources not yet economic.

While gas hydrates “contain four to more than 40 times the amount of gas as seen in other unconventional gas resources,” like any gas resource they require a source, a reservoir system and a trap, Hunter said, although “hydrates can help form their own seal” by filling in reservoir porosity.

For hydrates to form, you need to be “within the pressure stability region” for hydrates, Hunter said: both temperature and pressure conditions are required for formation and you have to have both gas and water to form the clathrate structure.

“Gas hydrates are stable in onshore regions … mainly beneath permafrost areas where we have sufficient cooling of the geothermal gradient and pressure in the geothermal gradient to allow formation of gas hydrates,” he said.

Phase 1

Phase 1 of the DOE-BP project involves characterizing the resource and reservoir fluids, primarily at Milne Point, but also includes “looking at drilling, production and completion, reservoir and petroleum engineering studies to determine reliable methods for operations within hydrates,” Hunter said.

A petroleum system, industry infrastructure and access to acreage are all required for hydrate production, and in the United States those areas are the Gulf of Mexico and onshore Alaska.

“The North Slope is the premier area in the world for a gas hydrates project at this time,” he said, and provides both gas hydrates and associated free gas.

But sufficient resources have to be “identified and verified” and viable production methods have to be economic.

Complete reservoir characterization important

In the DOE newsletter Hunter said results of the study so far highlight “the importance of a complete characterization of reservoir and fluid compartmentalization prior to selecting” sites for drilling or protection testing. Once initial gas hydrate/free gas plays are identified within the study area, you need “reservoir modeling evidence that depressurization of free gas zones can allow adjacent gas hydrates to dissociate at significant rates.” Also needed is a laboratory method that measures “relative permeability in hydrate/sediment mixtures.”

Gas hydrates at Milne Point are being studied to determine the extent of the reservoir, stratigraphy, structure, continuity, quality, variability and geophysical and petrophysical property distribution.

The Phase 1 objective is to characterize reservoirs and fluids, “leading to estimates of the recoverable reserve and commercial potential, and the definition of procedures for gas hydrate drilling, data acquisition, completion and production.”

Phase 2, November 2004 to December 2005, and Phase 3, January 2006 to December 2006, would occur if justified by the results of Phase 1, and would integrate well, core, log, and production test data from additional wells.

“Ultimately,” Hunter said in the DOE publication, “the program could lead to development of a gas hydrate pilot project in the Milne Point area, and the determination of whether or not gas hydrates can become a part of the ANS gas resource portfolio.”





Want to know more?

If you’d like to read more about gas hydrates in the Arctic, go to Petroleum News’ Web site and search for some of the articles published on the subject in the newspaper in the last few years.

Web site: www.PetroleumNews.com

2004

• May 30 Anadarko temporarily trims Alaska staff

• March 28 How much is left?

• March 7 Hot Ice finds gas, but no gas hydrates….

• Feb. 29 Alaska on the brink

• Feb. 15 Proposed bill would change leasing rules

2003

• Dec. 28 Technical ‘breakthrough’ in hydrates turns heads

• Dec. 14 Participants call Mallik gas hydrate well success

• Aug. 17 ‘Tis the season for drilling

• April 27 BP quantifies gas hydrates

• April 13 Tapping hot ice

• April 6 Gas pipeline incentives back in federal energy bill

• March 9 Anadarko’s Arctic platform assembled, Hot Ice….

2002

• Nov. 17 DOE funds CO2 injection research

• Nov. 10 Hot ice project: Anadarko to core hydrate well….

• Nov. 10 Feds hand out $1.17 million in energy grants….

• Oct. 27 A portable exploration solution

• Oct. 20 Anadarko cuts hydrate project back to one well

• Sept. 15 B.C. fishermen land huge energy source

• May 5 BP-led research project investigates gas hydrate….

• May 5 CO2 demonstration project proposed at Milne Point

• Aug. 4 Wainwright’s coalbed methane potential huge….

• April 21 ‘Very encouraging’ results from Mackenzie Delta….

• March 10 Maurer, Anadarko to drill gas hydrate wells….


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