Economic Comparisons of Barge-Mounted Plants and Conventional Offshore Gas Field Development by the Present-Value Method

Abstract

Summary A method is proposed for developing offshore natural gas fields by using subsea completions, flexible risers, and barge-mounted methanol plants operating at sea above the gas fields. This method is compared economically with a conventional one, which uses platforms for drilling and field operation plus a pipeline to bring the gas ashore. Both capital as well as operating/maintenance costs are compared. Many fields, particularly the smaller ones farther from shore, would be more profitably particularly the smaller ones farther from shore, would be more profitably developed by using the methanol approach. Introduction Offshore natural gas is one of our major energy resources that so far has been developed only in those few places that are located near major markets. The development technology exists but the cost is very high. There is clearly an incentive to devise more economical ways of producing at least some of this natural gas. Any new method must stand the test of comparison with conventional ones under a variety of scenarios. In this paper, we economically compare conventional offshore gas field development paper, we economically compare conventional offshore gas field development with a new method based on barge-mounted methanol plants (BMMPs). This is done for differently sized fields in waters of different depths and in locations having different climatic conditions. The approach used allows a relatively quick comparison of the two methods for new fields in other locations. Methanol Many readers may wonder what methanol is and why it should be produced. While this has been reviewed extensively recently, we present some of the more important aspects here. Methanol is a colorless, combustible liquid with a boiling point of about 149F [65C]. While it can be manufactured from coal, wood, and various organic materials, it is now commonly made from natural gas. It is miscible with water and gasoline, but when both liquids are present, most of the methanol tends to go into the aqueous phase. At one time it was widely used as "temporary" antifreeze in automobile engine cooling systems, but now it is used mainly as a solvent and to make other petrochemicals such as formaldehyde. While it can be toxic if ingested or improperly handled, it is probably no worse than gasoline, which we have managed to live with. Most people are familiar with the use of ethanol solutions in gasoline (frequently known as "gasohol,") but relatively few know about the extensive testing of methanol solutions in gasoline for the same use. Not only is the latter technically feasible, but the economics are superior because methanol costs less than a quarter of what ethanol does and is even less expensive than gasoline. As is the case with "neat" ethanol in Brazil, a fuel-grade methanol (FGM) also can be used in car engines specially designed for alcohols. Methanol can be used to make other effective gasoline blending agents, such as methyl tertiary butyl ether (MTBE), or can he converted to high-octane gasoline by means of Mobil's methanol-to-gasoline (MTG) process now being implemented in New Zealand. Methanol has been tested successfully in full-sized turbo-electric generators and has been found to produce significantly less air pollution than the fuel oils it replaced. More recently it also has been tested successfully in some modified diesel engines. Although occasionally there are minor technical problems in some of these applications, they have been solved elsewhere. Even though there was a methanol shortage in the world markets several years ago, there is currently a surplus. Future projections of the supply-demand situation are difficult because no one knows how fast these new potential markets might develop. To be prepared for this, it is helpful to know the relative costs of developing and producing remote offshore gas fields by using BMMP's and conventional methods. Components of the Two Development Schemes Conventional Method In both this method and that of the BMMP, we assume that the offshore field has been discovered by use of the floating or semisubmersible drilling platform and then delineated by use of geophysical or other methods. Hence, these costs will be the same for both methods. For drilling of the field and production of the gas, a platform will be needed, the cost of which will be determined primarily by water depth, number of wells, and climatic conditions. Finally, a pipeline will be needed to bring the gas ashore. JPT p. 469