WHAT MIDSTREAM SOLUTIONS ARE AVAILABLE TO MONETIZE NATURAL GAS RESERVES?

articles project development articles Jan 25, 2024
What midstream solutions are available to monetize natural gas reserves?

Monetizing natural gas reserves involves extracting and processing natural gas and delivering it to market. The midstream sector of the natural gas industry is responsible for the transportation, storage, and processing of natural gas. But what midstream solutions are available to monetize natural gas reserves?

In this article we will give a high-level overview of the most popular technologies current being used include:

  1. Pipeline Transportation: Pipeline transportation is the most common method of moving natural gas from production areas to processing plants and end markets. Pipeline infrastructure can be costly to build, but it provides a reliable and cost-effective means of transporting large volumes of natural gas over long distances. Pipeline projects are favored for projects that intend to supply the local domestic market or markets that are boarder connected or very close together. The European natural gas network is a good example.
  2. Liquefied Natural Gas (LNG) Export: LNG is a form of natural gas that has been cooled and compressed into a liquid state, making it easier to transport over long distances. LNG can be shipped to markets around the world, making it a valuable export commodity. Building an LNG export facility requires significant investment, but it can provide a long-term revenue stream for natural gas producers. LNG export projects are favored for projects that intend to supply markets globally, rather than locally, and for stranded gas assets.
  3. CNG Transport: Compressed natural gas (CNG) is another form of natural gas that can be transported over long distances. CNG is compressed to a much higher pressure than pipeline gas, making it more energy-dense and easier to transport. CNG transport is typically done using specialized trucks or trailers, making it a more flexible but less efficient option compared to pipeline or LNG transportation. GNG projects are typically favored for fixed route transportation fuel projects such as fueling station for CNG buses, lorries and cars.
  4. Gas-to-Liquids (GTL) Conversion: GTL conversion involves converting natural gas into liquid fuels such as diesel, gasoline, and jet fuel. This process can be done using either direct or indirect conversion methods. GTL conversion can be expensive, but it can provide a higher value end product compared to selling natural gas directly. GTL export projects are favored for projects that access to a large natural gas supply and whose end products are intended to supply markets globally, rather than locally, and for stranded gas assets.
  5. Gas-to-Power (GTP) Conversion: GTP conversion involves using natural gas to generate electricity. This can be done using gas-fired power plants or combined-cycle power plants, which use both natural gas and steam to generate electricity. GTP conversion provides a stable and reliable demand source for natural gas, making it an attractive option for producers. The Power output is typically supplied domestically or regionally, depending on existing interconnection; however, the gas feedstock for the project could be supplied from local, regional or international gas reserves in the for of pipeline gas or LNG.

Overall, the choice of midstream solutions will depend on factors such as the location of the reserves, the size and quality of the reserves, the proximity to existing infrastructure, and market demand for the end product, whether local, regional or international. It's essential to work with experts in the midstream sector to identify the most appropriate solutions and to develop a comprehensive strategy for monetizing natural gas reserves.

 

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