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The majority of the offshore industry is geared towards the production of crude oil, which being a liquid, can be easily transported by tanker to virtually any market in the world. But recently, consumption and awareness of the usefulness of natural gas has been increasing rapidly, making it one of the most important energy resources in the world (Donnelly 2005). This is due to the fact that natural gas has found wide application in various projects such as; power generation, powering of vehicles, foreign exchange e.t.c and it has also been found to be environmentally friendly. But some of this natural gas wells or reserves are located in areas where pipelines cannot be constructed or its usage will not be economical, thus making this natural gas to be termed stranded, since it is unassessible (Thackeray & Leckie, 2002). Therefore stranded natural gas wells can be defined as wells which cannot be harnessed because of various reasons or the fact that that it is beyond the economical limit of a pipeline project. This natural gas (especially stranded ones) which is produced with or without crude oil, however, presents a transportation problem. Finding a solution to this problem is what has necessitated me to embark on this project.
1.2 What is Compressed Natural Gas (CNG)
Natural gas is often associated with oil as both are commonly found together in the same reservoir. Non-associated natural gas is gas that is found without oil while associated natural gas is gas that is found with oil.
CNG is compressed natural gas stored at pressure. It consists primarily of methane (85-95%), with trailing amounts of ethane, propane, and butanes. It is odourless, colourless, and tasteless. It is made by compressing natural gas , to less than 1% of its volume at standard atmospheric pressure. Also refrigerating compressed natural gas further increases the net volume of gas in a given space (i.e. an increase in pressure, will allow more gas to be contained in a unit space). Refrigerating CNG to -30C can increase the density by more than 50% from ambient temperature.
Compressed Natural Gas (CNG) is a substitute for gasoline (petrol), diesel, or propane fuel. It is considered to be a more environmentally "clean" alternative to those fuels. It is much safer than other motor fuels in the event of a fuel spill. This is because natural gas is lighter than air, so it disperses quickly when leaked or spilled. It is stored and distributed in hard containers, at a normal pressure of 200-220 bar, usually in cylindrical or spherical shapes. An odorant is normally added to CNG for safety reasons.
1.3 The Need for CNG Transportation
There are several large reserves in the world that would justify an LNG project, however, due to political risk factors, these same reserves are also considered stranded(Donnelly and Denney 2005). In such cases, CNG may transport this stranded natural gas, avoiding the necessity of expensive land-based LNG facilities. Also the relatively long distances between the gas sources and markets or difficulties associated with accessing remote, deepwater offshore fields may make pipelines prohibitively expensive for otherwise promising gas projects.
Since many gas-producing fields lack suitable infrastructure for liquefying natural gas, and because terminal regasification facilities may be limited, transportation of this stranded gas in compressed rather than liquid form offers cost and operational benefits. This form of transportation is beneficial because gas can be loaded directly onto gas carriers from production facilities, increasing safety and decreasing security concerns. It can be compressed and contained, eliminating the need for costly liquification and regasification processing.
CNG carriers do not require a regasification facility near populated markets; this is because CNG carriers can discharge gas directly into terminal facilities, further minimizing potential impact to population centers and areas of high environmental sensitivity. With this, natural gas in form of CNG can be delivered virtually anywhere.
This technology has made it possible for stranded reserves to be economically brought to market, by trucks or rail for onshore and by barge or ship for offshore as shown in fig 1.1 and fig 1.2 respectively
Fig 1.1 CNG TRUCK
Fig 1.2 CNG SHIP
Fundamental laws of physical science are the basis for the primary economic advantage of CNG transportation over pipeline alternatives such as LNG. CNG transportation at high pressures minimizes the total change in the thermodynamic state of natural gas and the cost of mechanical equipment required to perform such changes of state. Compared to other alternatives such as pipelines, CNG has the advantage of retaining its product form. This makes it easier to market and to transport through the usual product delivery system, thereby satisfying small demand markets and monetizing small reserves which are the two things that CNG transport of natural gas is intended to target.
1.4 Statement of Problem
For almost a century, natural gas has been transported safely, reliably, and economically via pipelines. Pipelines were ideally suited to the supply and market conditions of the twentieth century, when large reservoirs of gas could be found in assessible locations that provide the stability and long-term security that pipeline projects demand. Currently, gas is more likely re-injected into the reservoir to help maintain pressure, but with natural gas becoming such an important and marketable commodity and with the advent of higher natural gas prices, attention is now shifting to stranded reservoirs which were previously thought too small, too remote, or too geographically harsh to develop because producers would much rather sell the gas at market than flare it off or inject it back down the well.
It has become economically feasible to lay gathering and transmission pipelines to many smaller and more remote gas producing wells and fields that have been deemed non-commercial because of their limited or unknown reserves. Many other fields, however, are so small or remote or ill-defined that the value of the gas known to exist is insufficient to pay for the cost of installation and operation of the pipeline; thus those fields' remains shut in. With the emerging demand and with new market opportunities expected to arise, the ways of transporting this gas from offshore and onshore reserves have generated considerable and renewed interest. But natural gas, being a gas, cannot simply be poured into a tanker or ship and taken to the market. Also, with the current trend towards deep water drilling, pipelines are often not technically or economically feasible. Thus this situation has caused numerous alternative schemes to be proposed for recovering and transporting of natural gas from shut-in fields. One of these schemes is compressed natural gas (CNG) transportation.
1.5 Aims and Objective
With this technology (i.e. CNG transportation system), ready transportation of gas from smaller and marginal fields with small throughputs is now feasible, thus giving us the opportunity to de-strand some of the worlds 4,500 trillion cubic feet of stranded gas (Zeus Development Corp., 2004) and allowing us to utilize the world's natural gas reserves more efficiently and with less waste. Therefore the aim of this project is;
to show that CNG transportation system can be used to transport stranded natural gas, thereby increasing its availability and making it readily available to the market.
to show how safe and reliable CNG transportation can be, both onshore and offshore.
to show that CNG transportation system helps to minimize cost during production
Over the past decade, the increased lucrative potential of CNG transportation has renewed interest and spawned several innovative concepts. This is because, CNG compares favorably against LNG. It costs about a tenth as much to compress as it does to liquefy the same volume of gas. In addition, where LNG takes up to 35% of the cargo, liquefaction can use 15%, boil-off over a ten-day voyage another 15% and regasification another 5% while CNG only needs about 2-3% of the gas for the same journey.
CNG tankers will also be able to move faster than LNG vessels, reducing the number needed. They have a smaller draught and will be able to use standard offshore mooring buoys. Moreover, the contractual chain is much simpler. Apart from anything else, the lower project cost enables reliance on short-term contracts since the pay-back time is much shorter than for a liquefaction terminal and associated vessels.
So like Liquefied Natural Gas (LNG), Compressed Natural Gas (CNG) is a technology that emerged far ahead of its time. A number of competing transportation technologies have been developed ever since CNG transportation has been considered by developers as a means of bringing gas to market. This can be seen from the various contributions which began as far as 1965.
The first CNG ship the Sigalpha, was commissioned in 1965, in New York Harbor. The Sigalpha faced two problems. The technical standards was poor, such that, the weight of steel pressure vessels required would be too heavy for the host ship to carry and the price of natural gas was too low and trending downward thus making the whole project a waste.
2.1 Ocean Transport Pressure System 1968.
Ocean Transport in 1968 built a Prototype of the Sigalpha that was tested in New Jersey. Here the CNG was loaded at 80 bar and -600C. Although it was approved, it was later discovered that issues of safety, corrosion and excessive weight had not been properly tackled. Moreover it was found not to be a commercial ship and thus the issue of cost came up again.
Fig 2.1The Sigalpha
2.2 Saga / Moss Rosenberg CNG Design 1976
This idea was conceived by Saga Petroleum in 1976. Its concept and drawings was developed by Saga and Moss Rosenberg yard of Norway. This CNG carrier was capable of carrying a mixture of gas and oil at 100 bar. The ship loaded directly from sub-sea wells using well pressure for loading and water for discharging the cargo.
Fig 1.2 Saga/Moss Rosenborg CNG Ship
Several other CNG ship-based pilot projects were also carried out in the past. Unfortunately, they all had common problems, which was that, the weight of the steel pressure vessels required to make a potential project feasible was too heavy for the ships and the excessive weight created stability problems and water draft concerns. The price of gas was too low to make the venture worthwhile and also servicing such a heavy ship would be impossible in any of the world's existing dry-docks. However, new approaches to gas handling and containment have reduced the cost and weight of CNG storage, increasing the volume that a ship or barge can carry. In addition, gas prices are higher and expected to remain strong into the future. Moreover, the bulk of investment in a CNG supply chain is in the vessels and onboard transportation system. This means that a CNG supply chain can be scaled to fit the gas resource and can move to a new field when the first one is exhausted.
With these latest improvements, modern CNG transportation innovations were embarked upon. These innovations made use of the latest trends in CNG Technology, which are;
â€¢Lower transport temperatures to attain higher densities
â€¢Higher strength steel
â€¢Lighter weight materials
â€¢Wrapped steel pipes with nylon or carbon fibres
â€¢Composite pressure vessels
One of the proponents of this new CNG technology in the early 1990s was Cran & Stennings Technology Inc. that proposed a well known concept, "Coselletm" (Stenning and Cran, 2000). The idea seeks to reduce the manufacturing cost of the gas containment system. Spooling small diameter (6 inch) coiled tubing into large carrousels achieves this purpose, with the gas pressured up to 3000 psi at ambient temperatures. The ships are double-hulled carriers filled with coselles. The pressure vessels represent about half of the total ship capital cost and so their design and cost are of critical importance. The vessels are estimated to cost about $100 to $125 million each - each vessel has a capacity of about 300 MMcf of export gas.
Similar methodology is also being used by others namely TransOcean Gas, a Canadian enterprise, and Knutsen O.A.S Shipping of Norway. Another approach to CNG is espoused by Enersea Transport ( Dunlop et al, 2003); they developed the "Volume Optimized Transport and Storage" (VOTRANStm) concept in which the natural gas is compressed and cooled to lower temperatures. This reduces the volume of the compressed gas compared to just compressing it at ambient temperatures. At the lower temperatures of 0 to -40F the process works at lower pressures than at ambient temperatures.
In 1999, author, Mr. Steven Campbell developed a method of CNG transportation that overcomes all of the above mentioned deficiencies in CNG transportation. This method, licensed exclusively to Trans Ocean Gas Inc. of St. John's Newfoundland, proposes to use composite pressure vessels (CPVs) to safely and cost effectively transport up to 1.7 Bcf of natural gas by ship.
CPVs have been successfully used in the national defense / aerospace industry since the early 1970's. About 10 years ago, the natural gas vehicle industry started using CPVs for busses, fleet vehicles, and automobiles. The CPVs proposed for a ship-based CNG transportation method are similar, but larger than those currently used for natural gas driven buses. Since CPVs have been successfully used to store natural gas for fuel on public busses, they are well justified for use in a ship-based CNG transportation system.
The major advantages of using composite pressure vessels over conventional steel pressure vessels for a CNG transportation system are:
The rupture characteristics of CPVs far exceed those of steel pressure vessels. When a composite pressure vessel is punctured, the puncture does not propagate. The pressure vessel maintains its structural integrity and form. When a steel pressure vessel ruptures it does so violently similar to a grenade. If such steel pressure vessels were nested together, the potential would exist for a domino catastrophic failure. Where factors of safety less than that of the ASME Code are applied, the potential risk is increased.
Since the materials used to fabricate a CPV are corrosion resistant, the CPV is also corrosion resistant and because the liner of a composite pressure vessel is made from high density polyethylene (HDPE), raw natural gas that is often highly corrosive can be stored without concern. Conversely, steel pressure vessels are susceptible to galvanic corrosion, especially in a salt air environment.
Composite pressure vessels are much lighter than comparable steel ones. Depending on the proportional amount of carbon and glass filament fibres used to manufacture a CPV, it will weigh between 1/6 - 1/3 that of a comparable high-strength steel pressure vessel. Being relatively lightweight will allow for the use of a container ship hull form, whereas all other proposed methods have to use a tanker or bulk carrier hull form. Container ship hull forms are designed for speed, resulting in fewer CNG carriers required for a particular CNG project. All other methods will have a difficult time finding a dry dock that can accommodate such a heavy ship with a large draft. Dry-docking will be even more problematic for steel method proponents without a reduced factor of safety from the ASME Code.
Composite pressure vessels have a long life expectancy. The combined allowable fatigue cycles of epoxy, high density polyethylene (HDPE), and glass and carbon fibre, exceed the expected life expectancy of several newly built ships.
Currently, there are truck-mounted CNG projects in operation, but they are subsidized, since they would not be economically feasible on their own. The capacity of steel pressure vessels used for truck-mounted CNG systems is limited by a weight constraint of a truck transportation system. In addition, to store and transport raw gas and liquids, which most likely would be corrosive, requires a corrosion allowance. This further decreases the capacity, since the allowable operating pressure requires commensurate reduction.
2.3 Trans Ocean Gas
Trans Ocean Gas is the only CNG proponent in the world that use fibre reinforced plastic (FRP) pressure vessels to transport CNG by ship.
Fig 2.3 Trans Ocean Gas Ship
FRP pressure vessels have been proven safe and reliable through critical applications in aerospace, in national defense, in the offshore oil and gas industry, and most importantly in public transit. The use of FRP pressure vessels overcomes all the deficiencies of proposed steel-based methods. The Trans Ocean Gas method using FRP pressure vessels is:
Light weight (1/3 that of steel);
Corrosion resistant (thermoplastic liner);
Safe from rupture (leak before burst characteristic);
Highly reliable (probability of failure <10e-5);
Resistant to ultra-low temperatures (-60C); and
Very cost effective (one-third that of comparable steel-based systems).
The Trans Ocean Gas CNG containment system is fabricated in modular cassettes for ease of installation and hook-up. The cassette system holds numerous FRP bottles vertically, with connecting manifolds on both the top and bottom of each cassette. The vertical mounting allows for the removal of condensed natural gas liquids at any point during a voyage or on station. The designed steel cassette frames also help to isolate the gas containment system from hydro-dynamic movements and vibrations. The cassette system also allows for 100 percent visual inspection, while in service. To ensure continuity of the corrosion resistant FRP pressure vessels, the manifolds and piping network up to the first isolation valve are fabricated using low-temperature stainless steel.
2.4 FRP Verification Testing
A joint industry project to verify and certify the Trans Ocean Gas CNG method was sanctioned on July 21, 2005. Prototype testing is currently ongoing. Full certification by Det Norske Veritas (DNV) is anticipated in the second quarter of 2008.
For certification, DNV will witness the testing of the Trans Ocean Gas CNG method. As an international classification society, DNV is committed to the safety of life, property and the environment. DNV is recognized as one of the world's leading organizations in research and development of innovative technologies for the offshore and maritime industries.
It can be seen that the major aim in all these innovations is to ensure that gas can be loaded directly onto gas carriers from offshore and onshore production facilities, increase safety and decreasing security concerns. Also eliminating the need for costly liquefaction and regasification processing since the gas can be compressed and contained onboard. The fact that CNG carriers also discharge gas directly into terminal facilities located offshore, further minimizing potential impact to population centres and areas of high environmental sensitivity, has made it a relevant tool in gas transportation.
CNG TRANSPORTATION SYSTEM
3.1 CNG Technology and Transportation System Description
The technology is relatively simple. Natural gas, originally at certain temperature and pressure is compressed to higher pressures and chilled to lower temperatures. This technology does not allow for any free water in the natural gas. Therefore, the water must be removed (e.g., by molecular-sieve driers) before compressing. Specially designed ships and trucks, which have a containment system made of stacked horizontal or vertical pipes, are then used to transport the cold compressed gas. The typical CNG value chain consists of a gas supply; a gas-drying, compression for-loading, and metering system; loading system; sea or land transport; and a discharging system including unloading compression and metering.
3.1.1 CNG by ship
A fleet of CNG ships could serve as both storage and transport carriers and could discharge directly into a land-based gas-utility grid. A field does not necessarily need to have low reserves to be classified as stranded. Location and existing infrastructure are equally important. As an example, deepwater fields may not be justified economically by gas production through a pipeline system because of high cost, even if the field is relatively close to existing infrastructure. Tariffs, capacity limitations, investment cost, or tie-in restrictions may prevail. In such cases, ship transport of CNG could be an alternative.
In the ship-based CNG transportation system, the ships carry the chilled compressed gas in a boxlike structure called CNG module as shown in fig 3.1.
Fig 3.1 Knusten CNG ship with modules
The design of the module consists of horizontal or vertical stacking of pipes known as cells, as shown in fig 3.2 and fig 3.3. A module is made up of two or more banks of cells. The stacked pipes are designed to be 42inch in diameter and made up of carbon steel. Each bank of cells is encased in a frame that is removable for maintenance if required. Within each compartment of the ship, two or more modules may exist. The stacking of the pipes depends upon the volume of gas to be transported. For relatively small volumes such as 700 MMscf of natural gas, vertical arrangement of pipes is found suitable.
Fig 3.2 design of a vertical module
Fig 3.3 horizontal module design
By chilling gas to a suitably low temperature, (usually well below 00C), it is possible to compress great quantities of gas into long tubular containers. This system employs a means for efficiently handling the transfer of cargos into and from the cargo tanks. A liquid displacement system controls the temperature and pressure of the gas throughout the process. By controlling back-up pressures when loading gas into containers, temperature extremes due to auto-refrigeration and heat of compression effects can be avoided. Using the displacement fluid as piston to push the gas cargo out of the containers at the delivery terminal prevents drop-out of natural gas liquids. Generally, the shipboard gas handling system design assumes that the gas arrives onboard at a pressure which allows the gas to be injected into the storage containers at the temperatures and pressures designed in accordance with the volume optimization principles described above. The delivery pressure from the in-field facilities, determines how much chilling is required onboard the ship.
The loading of a ship-based CNG transportation system is performed in two phases. Phase one is the loading of the gas and liquids directly into the composite pressure vessels using the source delivery pressure. Phase two is the loading of the gas and liquids at elevated pressures. On-board compression is used to compress the gas to this elevated pressure. When loading, gas flows onto the ship, through a HIPPS (high integrity pressure protection system) then through chillers required to reduce the temperature of the gas to containment pressure specification. Following chilling, gas will flow into the containment system against a pressurized ethylene glycol/water solution. Gas will initially fill the first series of cargo modules, while displacing the liquid piston into the second series. Gas continues to fill the containment into successive sets of modules while cascading the fluid ahead of it along the way. As the last of pipe tanks are filled with gas, the displacement fluid is stored in a chilled state in an insulated tank aboard the vessel.
Upon arriving at the unloading terminal, gas offloading will proceed in a similar, but reversed manner, with the displacement liquid pushing the gas out of the containment system in another cascading process. To maintain a constant and high discharge pressure, on-board compression is used to unload the modules in a combined and sequential order. During the initial phase of the discharging sequence, gas is heated onboard the ship to maintain the system temperature at ambient conditions, prior to reducing the pressure through a JT valve and this is done according to specific requirements. The liquid displacement method and the process design allow recovery of almost 99%of the stored gas. The amount of displacement liquid to be carried on board the ship is dependent on the number of cylinders on board. Although the system design will vary slightly for distinctly different compositions, but in general, the concept requires that the gas does not drop below the bubble point region and hence remains in a dense phase. Similarly, because free water is not expected to drop out, gas hydrates should not form.
In a situation where the gas comes with liquid, during phase two, the oncoming liquids are removed with the assistance of deck mounted liquid slug catcher. The liquids are then pumped into designated cells to achieve the desired ballast. The gas and liquids may be unloaded separately during offloading but concurrently to minimize delivery time
The gas can also be unloaded offshore keeping the requirement of onshore facilities to minimum. To increase capacity and efficiency, refrigeration and insulation may be used and in order to maintain continuous production, several shuttle tankers may be required. It should be noted that, the size of transporting ships depends upon the expected natural gas capacity.
3.1.2 CNG by truck
As now practiced onshore, CNG is transported in specially designed jumbo tube trailers as shown in fig 1.1. Each trailer contains 8 to 12 horizontal, cylindrical, forged pressure vessels 22inch in diameter and 34ft long, with an interior volume of about 77cuft and a rated pressure of at least 2400psi. Known manufacturers of these vehicles are the United States Steel Corporation. Several different system-operating configurations exist, but they all follow the same basic steps.
A typical system of CNG truck transportation consist of two trailers and one tractor for transporting gas from a load site serving several wells to an unload site. In such a system, one trailer is always at the load site and being filled, while a second trailer is driven to the unload site, discharged, and returned to the load site. When the first trailer is full, the empty trailer is loaded and the process is repeated. In this system, one trailer is always at the wellsite loading so that the wells can be kept in continuous production. When the well flow rate is such that a trailer can be filled in less time than is required for the other trailer to make the round trip to the unload site to unload, then each additional trailer and tractor added to the system will add capacity to the system equivalent to the capacity provided by the initial two-trailer system. A significant variation to the typical system is one in which many low-deliverability wells are dispersed widely over an area but within range of a common unload site. This configuration then would have one trailer being loaded over a longer period at each load site and one additional trailer making the rounds, being shuttled in to replace each trailer as it is filled. All trailers would rotate continuously between all wellsites, but no single well or load site need bear the economic burden of having two trailers.
In each system, gas at wellhead is treated and compressed as necessary and is loaded into trailers as shown in fig.3.4. It is then hauled to an appropriate discharge site and is unloaded through a metering system into a discharge line using pressure differential between trailer and line. A discharge compressor may be used to evacuate the cylinders to a pressure below the pipeline pressure, or the trailer may return to the load site with a residual pressure slightly higher than the pipeline pressure.
Well head meter
Compressor after cooler
Fig 3.4 Typical loading schematic
During the off loading of the gas, it is most likely that a relatively constant discharge pressure would be required. For safety, it is desirable to unload one module at a time. A control valve on each module is progressively opened to maintain the desired discharge pressure. As the pressure declines, the control valve is fully opened. At no time is the trailer pressure allowed to drop below ambient pressure. The maximum capacity of each trailer depends on the measured interior volume of the cylinders, the pressure and temperature at which gas is hauled, and the gas composition. For example, a 10-tube trailer, the gross capacity generally lies between 150 and 175 Mcf. Many loads may be required to transport the daily output of any given well or set wells, and for that reason most systems operate 24hrs a day, 7days a week.
To allow for a low centre of gravity, the truck-mounted system has the pressure vessels supported in a frame that is integral with the trailer body. Thus, the bottom of the pressure vessels may sit at or near axle elevation. Also, in order to maintain continuous production, several shuttle tankers may be required. The number and size of these shuttle tankers, as well as the number and pressure capacity of the pressure vessels, will be determined by optimization considering such criteria as, production requirements, unloading facilities (rate and volume capacity), and cost. But it should be noted that not all natural gas can be transported by truck because of various system limitations, gas quality, but where truck transportation has been used appropriately, it has been remarkably safe, reliable, and economical.
3.2 CNG Transportation Costs
The transportation of CNG, though relatively simple from a technical standpoint, is more complicated in financial terms. This is because it is capital intensive and requires 85-90% of the total capital requirements for the process. Fig 3.4 shows cost components for CNG transport and it should be noted that, the shipping percentage shown is the same as that of truck transportation.
Figure 3.4 Cost components for a typical CNG project
(Source: Stenning and Cran, 2000)
The value at wellhead prices of one load of gas ranges from $350 to $1,000 but requires personnel and equipment similar to cross-country transportation of merchandise, where the cargo value may easily be greater than $100,000. Obviously, CNG transportation requires diligent effort to get as many loads of gas per unit of equipment as possible and requires appropriate tradeoffs on equipment and personnel costs.
In evaluating any given project, the first step is to determine the load time and the travel plus unload time so the system equipment can be sized and personnel requirements can be determined. From that, and from historical operating data, monthly operating costs including equipment carrying costs and overhead costs are estimated. Since all the equipment is skid mounted and can be moved from project to project, its cost can be amortized over a life span greater than the term of the project. Equipment setup costs, however, must be amortized over the life of the project. These costs vary widely with location and conditions but $40,000 is about typical for equipment setup.
In truck transportation of CNG equipment utilization is dependent on several factors, all related to the time required to transport a load of gas. Among these are round-trip travel times, unloading time, and maintenance downtime. Generally, load time is determined by the output rate of the well or wells and is independent of other factors except the net delivery capacity of the trailer or ship. For a given well, the initial flow rate of gas can be determined by test before installing the transport system, but initial rate may decline with time as the reservoir is depleted. Additional wells may be connected to a central loading station to maintain the initial flow rate, or the system may be changed to maintain efficiency as the wells decline. If load compression or other load-site equipment is required, it is sized to match the well output rate so there are no equipment limitations on load time.
Round-trip travel time is a function of road conditions, total travel distance, and weather. Vehicle speeds are seldom more than 24km/h on unpaved roads and are limited to standard speed limits on highways. In the best of circumstances, 64km/h is the maximum average speed over fairly short distances, and some time is needed to turn around, to park, and to hook or unhook from the load and unload stations. Additional time to "dolly-down" the trailer and switch the tractor also may be necessary.
Unload time depends on the rate of acceptance of the gas by the recipient and is limited by the maximum rate at which it can be discharged from the trailer. Pipeline unload sites are chosen to minimize problems relating to acceptance rate, but if gas is delivered to an industrial end-user, his consumption rate may be relatively low. Also, unload rates may need to be controlled to facilitate orifice or turbine meters if they are used in addition to the static volume measurement of the trailer.
Maintenance downtime is less definable than any other equipment utilization factor. Simple steps such as careful preventive maintenance help minimize downtime, but additional steps are needed. A good supply of spare parts is necessary, and for high-maintenance items such as diesel tractors, a complete spare unit may be kept waiting. Not surprisingly, road conditions are a major factor in vehicle downtime, and effort spent to keep unpaved roads in top condition is worthwhile.
As an example of CNG truck transportation costs analysis, consider an isolated well, 24km by paved road from a low-pressure, 100psi pipeline, with a well flow rate of 1500Mcf/D at 1000psi. Also assume that the gas analysis shows 1100Btu/cuft and that the cost of one spare tractor can be shared with four similar systems. Since the round trip travel time plus unload time is less than 2hrs, 12 loads per day could be transported with a standard two-trailer system using four drivers and one foreman. However, only 11 loads at 136Mcf per load are available, so there will be some waiting time at the wellsite. A single-stage compressor of about 80hp is required for the operation includes two CNG trailers, one tractor and a shared spare, and one compressor, dehydrator, load station, unload station, field office, and pick-up truck, plus miscellaneous tools, communication equipment, fuel tanks, and spare parts. Total cost of the equipment is about $550000. The monthly cost of equipment, personnel, equipment maintenance, tires, fuel, chemical, insurance, taxes, utilities, and overhead would be about $55000. These costs do not include set-up and tear-down costs at the beginning and end of the project, nor do they include any fees or profit.
In the case of CNG transportation by ship which is almost similar to truck transportation, the onshore infrastructure for loading the compressed gas into the ship onshore requires mainly the compressor and accessories. A CNG plant with loading facilities including compressors, pipelines, and buoys, costs $30 million to $40 million. CNG ships, with chiller and fluid displacement on-board, cost up to $230 million. For example, unit costs analysis of CNG shipment, based on figures provided by Cran and Stenning, shows that three CNG shuttle ships carrying about 100 MMcf each at 2000 psi, would take about 72 hours for its round trip. It was estimated that the cost of three vessels, including containment systems and process equipment will be about $180 million, and the onshore facilities about $360 million. It was also observed that for a capacity of about 300 MMcf of gas, the vessels are estimated to cost about $100 to $125 million while for a capacity of about 320MMcf of gas, the vessels are estimated to cost about $125 million. In this analysis, it is assumed that the natural gas is conditioned and compressed on an existing platform which produces or collects the gas. The gas is then transferred to a CNG vessel, which brings the CNG to a receiving terminal.
The number of ships required for a certain transport distance depends upon the loading rate, voyage distance and time required for a ship to make a complete cycle of loading gas on the ship, transporting it, unloading the cargo at the buyer side and returning to the point of origin. This determines the amount of money to be spent on the whole project. It should be noted that, the required CNG ship numbers will increase as the transportation distances increase and the gas can also be unloaded offshore keeping the requirement of onshore facilities to minimum.
To illustrate how the number of ships impacts the transport cost, an analysis of an actual project is presented in figure 3.5. It shows that for a relatively short distance (less than 2,000 kilometers) and relatively small ship capacity (650 mmcf), the number of ships affects the transport cost considerably.
Fig 3.5 Cost analysis for different CNG ship numbers,
for a 1,952 km CNG project (Source:
Economides et al., 2005)
Furthermore, it should be noted that these costs are not applicable for all situations and conditions, but help to give us an insight on what CNG transportation cost entails.
3.3 CNG Transport Applications
CNG, as a method for transporting natural gas, may at first be viewed as competition for pipelines. However, since CNG transportation usually is not considered when a pipeline is obviously feasible, a better perspective may be to consider CNG transportation as an addition to the pipeline networks. Viewed in this way, we can begin to understand how CNG transportation may be the preferred method.
In general, CNG transportation projects fall into a spectrum based on their duration. On one end of the spectrum are wells to be produced for which reserves are defined very accurately but for which no direct pipeline connection can be justified because of the size and distance involved. In these cases, CNG transportation may be feasible, and if used will probably last until the reserves are depleted. We call this long-term or permanent only in a relative sense related to the life of the reserves.
On the other end of the spectrum fall projects where CNG transportation fills a very short-term need and where it is clear from the outset that the CNG transportation phase will be terminated or replaced quickly. In this category there are several important but limited applications of the process, including the following
Lease saving. The process can be used temporarily where tight deadlines prevent otherwise "commercial" production before oil and mineral leases expire.
Right-of-way problems: the process can produce gas where pipeline right-of-way acquisition is impossible or delayed because of environmental, safety, or other considerations.
Well testing: the process can allow wells to be tested without wasting gas by flaring or venting.
Emergency supply: the process can replace disrupted primary gas supply systems at hospitals, factories, schools, or even cities.
By far the greatest use of CNG transportation falls between these two extremes, where minimizing risk is important. The very short-term applications tend to be distress situations and are not general practices except for well testing. On the other hand, reserves rarely are defined so clearly that there is no hope of eventually getting a pipeline connection. More often, wells are drilled (perhaps in search of oil) and gas is encountered, but insufficient data exist to define the recoverable gas reserves and no pipeline can be justified. That is not to say that sufficient reserves do not exist, but rather that qualified reservoir analysts cannot say with certainty that there are sufficient reserves.
It is only through extensive drilling programs or through production history that reservoir sizes can be determined with any degree of accuracy. For some wells, the drilling programs fail to confirm adequate reserves, and therefore pipelines are not built and no gas production history is established. With very little capital risked, these wells and fields can be produced for a sufficient time to establish a production history and a proved reservoir. Once that is reservoir is proved, one of two of events will occur: either a pipeline will be built and the trucks removed or the reserves will be of insufficient size and the trucks will remain until the field is depleted. In either event, gas that would have remained in the ground is brought to the market. With this, it will be seen that CNG transportation also helps in cases of uncertainties.
Pipeline companies are beginning to recognize that CNG transportation can be valuable for evaluating and acquiring reserves at very low total cost. As new horizons are drilled beyond the reach of existing pipeline systems, the pipelines can reach out with CNG transportation and guarantee a market for the gas that is found without having to make a commitment on building a pipeline. In return, the pipelines benefit by early dedication of the reserves, before they even are defined, without having to take large volumes in the initial stages. The producers benefit by getting early cash flow on the gas sales before incurring the expense of drilling out the field.
One unexpected application of the CNG process is the transportation of casinghead and associated natural gas found in conjunction with oil production. Usually the volume of gas at these wells is low, but the wells may be shut in as a conservation or environmental measure if the gas otherwise would be flared. The economics are such that the value of the gas may not cover even the CNG transportation costs, but those costs may be small compared with the total revenue generated by the well. Many operators consider CNG transportation justified under these circumstances.
In general, the CNG transportation process may be used in any situation where large sunk-capital costs should be avoided. However, the process also may be applicable even if estimated reserves do justify the pipeline. Estimated reserves are never assured, and CNG transportation can add the certainty needed to bolster the economics of a questionable project.
ANALYSIS AND DISCUSSION
To further assess the economic viability of CNG transportation concept, it must be compared to Liquefied Natural Gas (LNG) and pipeline alternatives.
4.1 CNG Transportation and Pipeline Costs Comparison
Cost comparison between CNG transportation by truck or ship and transportation of gas by pipeline is difficult because of the various factors that influence the cost of each. The cost of small gathering pipeline systems must be justified solely on the basis of reserve estimates for the fields being served. Those reserves may last a few months with high flow rates, but if the reserves are sufficient the cost of the pipeline eventually can be recovered in either event. On the other hand, the cost of CNG transportation, with its much lower nonrecoverable investment and higher operating cost, is dependent on the flow rate of a gas field instead of on the total reserves.
For purposes of comparison, let's look at the cost of a pipeline for the CNG transportation example. We will assume a 4inch line 15 miles (24km) long. Although pipeline costs vary throughout the country, the values given in table 4.1 are fairly typical. These costs may be too high for some areas, but are considerably low for rocky areas. So at $1,500,000 total costs for 15 miles (24km), assuming a 15% interests rate and an operating cost of $3,000 per month, the field must last more than 3yrs to beat the trucking cost.
Table 4.1: Typical Pipeline Transportation Costs ($)
Right of way and damages at $50/rod ($10/m)
Engineering and survey
Pipe at $1.8/ft ($5.94/m)
Coating and wrapping at $0.53/ft ($1.74/m)
Clearing, ditching and backfill at $2.60/ft ($8.53/m)
Total cost per mile
Total cost for 15miles (24km)
Three years at 1,500 Mcf/D corresponds with about a 1.5-Bcf reservoir size. This means that unless the reservoir analysts can say with certainty that 1.5Bcf exists, CNG transportation is the option of less risk. Even if the analysts believe that considerably more gas is present, CNG transportation may be the preferred method for the first year or so while the reserves are being proved and while the pipeline is being built.
Also, let us consider another situation by analyzing three levels of gas thoroughput, starting with a flow of 100 MMcf/d (for a small single field operation) to a maximum of 300MMcf/d. Here, the total investment cost for a transportation system, including provision for processing, loading and receiving, are summarized in the tables that follow (i.e. tables 4.2 to 4.4).
Table 4.2: Capital investment for gas transportation system, 100 MMcf/d
2 CNG carriers
Table 4.3: Capital investment for gas transportation system, 200 MMcf/d
3 CNG carriers
Table 4.4: Capital investment for gas transportation system, 300 MMcf/d
4 CNG carriers
The tables show the breakdown for three major cost elements, and also the size of pipeline or number of vessels involved in each delivery system. For example, a daily flow rate of 100 MMcf/d will require a 14-in pipeline or two CNG carriers.
The total costs need to be considered with care, and at this level of analysis they are suggestive of trends and overall comparisons only. The costs shown in the tables are expressed as unit costs in table 4.5.
Table 4.5: Unit Investment Costs for Various Transportation Options ($Mcf/d)
From this analysis we can see that distance is a problem in CNG transportation, which is why CNG transportation is used for shorter distances, and wells where pipeline construction is not economical.
4.2 CNG and LNG Comparison
In comparing CNG transportation with LNG transportation for the same ship volume, LNG transports 2.1 Bcf of natural gas compared to a maximum volume of 1.2 Bcf transported as CNG. For any LNG project to be economically viable a throughput of 0.5 to 1 Bcf/d of natural gas is required. CNG projects, on the other hand, do not require such amount of reserves for the same throughput. Fields with modest reserves and gas rates can support CNG projects. For LNG projects, the liquefaction plant is the most capital intensive. Taking an industry estimate of production cost of $200/ton of LNG per annum, a project handling 500 MMscf/d (3.8 million tonnes of LNG per annum) requires an investment of over 760 million. A CNG plant with loading facilities including compressors, pipelines and buoys costs over $30million. The lower investment along with simplicity of the operations helps, in effect, in faster planning and commissioning of a CNG project. For CNG the shipping of the compressed gas is the most capital intensive. Offloading of the LNG requires special facilities namely, a regasification terminal. Regasification facilities cost over $500million depending upon terminal capacity (Stone et al, 2001). CNG offloading facilities consisting of separators, scrubbers and heaters cost over $16million. For longer distances CNG can deliver the gas in a more cost-effective manner than LNG. One factor in the choice between CNG and LNG is the pace of the project deployment. CNG tankers will also be able to move faster than LNG vessels, reducing the number needed. They have a smaller draught and will be able to use standard offshore mooring buoys. Typically LNG projects worldwide require at least 4 to 5 years from the planning stage to the delivery of first cargo. CNG projects can be commissioned in a period from 30 to 36 months beginning with the project design, planning and construction of the required infrastructure and delivery of the first cargo. Moreover, the contractual chain is much simpler too. Apart from anything else, the lower project cost enables reliance on short-term contracts since the pay-back time is much shorter than for a liquefaction terminal and associated vessels. Clearly, technology such as CNG would be inherent for faster application and monetization of reserves with smaller volumes and unattractive options of LNG or pipeline.
4.3 CNG Transportation Limitations
Limitations on CNG transportation include distance, cost and gas quality. However, the limitation is ill defined and can be established only by relationship to the alternatives. The cost of transportation is related to the personnel and equipment required per unit volume moved. Since equipment does not down-size easily, smaller volumes of gas cost more to transport than larger volumes, and, since longer distances decreases equipment utility, cost goes up with distance. So with increasing distance the price of the gas delivered as CNG becomes equal or exceeds the cost of LNG, this is because for very long distances the number of tractors, trailers and drivers required may increase the cost beyond practical limit. In the case of CNG transportation by ships, the main reason for cost escalation is the substantial investment required in the larger number of ships that are required.
Despite these limitations of cost and distance, CNG transportation has so many advantages some of which are enumerated below.
4.4 Advantages of CNG Transportation Method
â€¢ National Security - Gas can be loaded or unloaded from an offshore mooring buoy, keeping the CNG carrier away from populated areas.
â€¢ Environmental Safety - In the unlikely event that gas has to be vented from a CNG carrier, environmental damage would be negligible. At atmospheric pressure, natural gas is a vapour. Thus, it would simply dissipate into the atmosphere with no environmental impact.
â€¢ Economical Alternative - CNG transportation is an economical alternative to LNG. Also CNG provides the option of a fallback in the case of failure of the LNG and is far more flexible to unforeseen market fluctuations.
â€¢ Monetization of Stranded Gas Reserves - CNG development shall allow numerous stranded gas reserves to be economically brought to market. It can serve as a temporary solution for reserves that can eventually support an LNG project. Such an application would accelerate cash flow and economic return for the exploration costs.
â€¢ New Market Creation - CNG is potentially a very successful means to transport natural gas for distances up to 2500 miles, or even longer, thereby allowing new markets for natural gas to emerge.
â€¢ Environmental Benefits - CNG transportation of solution gas from an oil play will eliminate the requirement to flare large amounts of gas.
â€¢ Flexibility in Delivery Destinations - A CNG project may change its delivery location by moving the location of the offshore mooring buoy or using a different pier. This is not possible with a pipeline or LNG re-gasification plant.
CONCLUSION AND RECOMENDATION
CNG transportation system is a simple process using trailer or ship mounted pressure vessels and readily available oilfield equipment. It is an economically feasible gas transportation technique that can offer significant cost advantages over pipeline systems for many small or remotely located natural gas sources. But it should be noted that costs for CNG transportation of natural gas are related to the daily volumes available, the distances hauled, gas quality and many others, some of which affect the equipment utilization.
Ships and trucks for transporting the chilled compressed gas are unique in design because the required hardware and processes such as compression and refrigeration are easily available using standard industrial equipments and this provides an efficient way for containment and transportation of gas. Simple loading and unloading requirements provide an advantage in using the technology for offshore purposes. With CNG transportation, financial risk can be reduced by using it first in areas where pipelines are justified by gas reservoir size estimates.
Gas production in Nigeria, following oil production has limited its options for development. But with this technology, companies may search for gas directly, instead of concentrating on exploring for oil and giant gas fields to justify large-scale LNG development; smaller fields which are profitable and attractive and are in areas closer to the market would be able to be harnessed. CNG transportation system in Nigeria would also enable new offshore development by smaller operators, zero gas flaring to be achieved and the springing up of gas businesses and infrastructure, since the gas to be utilized would now be available and accessible.
From this study, it can be positively ascertained that CNG transportation system should be practiced and adopted in Nigeria, because it will open new strategies for exploration and also make transportation of natural gas from offshore and onshore economically viable. It would also be useful in areas where gas exploration has been postponed because of lack of gas gathering systems infrastructure. Moreover this technology which has a wide scope of commercial application would not only provide jobs, stop gas flaring, but will also help to improve gas infrastructure in Nigeria.
In other to achieve this various objectives, I recommend that;
Incentives and policies should be put in place to encourage investors to embark on this project.
Adequate security should be provided to enable investors go into remote areas for exploration and production.
Good roads should be provided
Seminars and lectures should be organised to create enough awareness and enlightenment about this technology.