Analysis of unconventional natural gas resources and possible monetization alternatives

Abstract

Purpose of this paper has been to analyse unconventional natural gas (UNG) resources and identify possible alternatives for monetizing them.What's found is that global UNG reserves are vast and many. However only a few have been established as commercial industries. The US has established a highly developed industry based on their large shale gas (SG) resources, while Australia is starting to get a sizeable production of coal bed methane (CBM).Estimates for the future natural gas (NG) market shows that there will be an increased price and demand development for both NG and liquefied NG (LNG) in European and Asian. This has triggered LNG project based UNG both in Australia and the US, aiming to supply these markets.NG components found in UNG reservoirs are the same as what's found in reservoirs classified as conventional (COG). However on a general basis there are some difference is component amount and composition. This creates some differences when comparing layout of LNG plants based on UNG against plants based on COG. Some of these differences are reduces need for fractionation and reception unit due to general lower content of heavy hydrocarbons (HHC). The absence of H$_2$S in most CBM reservoirs reduces the need for complex installations as the Claus process. However a general higher content of N$_2$ might require treatment by cryogenic distillation, adsorption or absorption-processes. This is a few point among others. UNG reservoirs with its low permeability requires high drilling activity and a high degree of hydraulic fracturing (HF). This brings with it environmental issues that has created public concerns. Governments and commercial operators needs to addresses these issues for UNG development to continue. Gaining the public trust could be established by a greater transparency of the industry and by creating regulatory framework and policies that minimizes the environmental potential.The monetization of UNG through a gas to liquid (GTL) process show potential. Cost estimates on GTL in early stages of the industry implied similar production cost between LNG and GTL. However large scale GTL plants recently built show a much high costs than what's estimated. GTL has a potential in regions with high price difference between crud oil and NG, but the current high cost leaves the technology with small profit margins.