72 SEPTEMBER 2003

In the past, natural gas was regarded as the fuel of choice for the future.
Well, the future has arrived in North America. The result is a tight sup-
ply situation developing for natural gas on this continent.
Conventional sources of natural gas in North America are producing at
capacity. This summer, gas storage levels are low when compared with
prior years. New sources of future gas supply are in Alaska and the
Mackenzie Delta. To tap these sources will require the building of at least
two major pipelines, which may take 8 to 10 years to accomplish.
Worldwide, natural gas is not in short supply. However, to transport gas from offshore
sources to North America will require building new receipt terminals along the U.S. coast
for liquefied natural gas (LNG) and expansion of the delivery system by ship. An innova-
tive idea for the temporary storage of offshore gas, delivered by LNG tankers, in salt cav-
erns may be one way of enhancing the supply of LNG. Another novel idea is to transport
the gas from nearby offshore sources in pipes under high pressure onboard tankers. Over
the next decade, the delivery of natural gas from offshore sources will likely be the fastest
growth of new supply of natural gas to North America.
On the processing side, all natural gas must be processed to meet strict sales-gas specifi-
cations. One process that all natural gas must undergo is dehydration. While glycol is the
most common process for dehydrating natural gas, it has the drawback of emitting vapors
to the atmosphere. This drawback can be avoided by dehydration with a salt-based
process. Dehydration of natural gas also can be done with molecular sieves. A new type of
molecular sieve is now available for removing not only water vapor but also nitrogen
and/or carbon dioxide from natural gas. This technology makes it economically possible
to market indigenous sources of natural gas that require major treatment.
Additional
Gas Processing
Technical Papers
Available at the SPE e-Library:
www.spe.org
SPE 82139
Benefits of Using Deliquescing
Desiccants for Gas
Dehydration
SPE 80486
In-House Design and
Modifications Improve
Sour-Gas Processing in an
Indian Offshore Gas Field: A
Case History
OTC papers available from
Linda Hall Library, Document
Services Phone: 1.800.662.1545
or 1.816.363.4600
OTC 15301
Offshore Transfer,
Regasification, and Salt-Dome
Storage of LNG
Edward Wichert, SPE, is an independent oil and gas industry consultant in Calgary and
Adjunct Professor in the Dept. of Chemical and Petroleum Engineering at the U. of
Calgary. His experience includes technical levels as well as management in drilling, oil and
gas production and processing, reservoir engineering, and economic analysis. Wichert has
published several articles dealing with determining the properties of sour gas and the
application of technology in sour-gas production, metering, and processing, as well as the
disposal of acid gas by compression and injection. His research interests are mainly relat-
ed to sour gas. Wichert holds a BS degree in petroleum engineering from the U.of Alberta
and an MS degree in chemical engineering from the U. of Calgary. He is a member of the
JPT Editorial Committee.
Wichert
O V E R V I E W
Gas Processing
JPT
GPOver.qxd 8/14/03 7:24 AM Page 72
SEPTEMBER 2003
73
Invention of the coselle pressure vessel and
development of the coselle compressed-
natural-gas (CNG) carrier promises to
improve the economics of shipping natural
gas from modest reserves over short sea
routes. This invention ignited renewed
interest in CNG marine transportation.
These CNG concepts could unlock reserves
that would remain stranded if their only
routes to market were pipeline or as liqui-
fied natural gas (LNG).
Introduction
LNG carriers are currently the only commer-
cial means of shipping natural gas by sea.
While LNG carriers are efficient at shipping
large volumes of gas over long distances, the
expense of the liquefaction plant and associat-
ed facilities makes LNG too expensive for
many markets. In numerous instances world-
wide, gas reserves are near potential markets,
but the high cost of liquefaction and trans-
portation prevents their exploitation, especial-
ly when the gas reserves or market demand is
small. Therefore, the gas remains stranded.
CNG is more cost-effective than the LNG
and pipeline alternatives when initial gas vol-
umes are approximately 200 to 500 MMscf/D
and distances are between 500 and
2,000 miles. The scalability of the CNG sys-
tem and the opportunity to reuse the ships
make the concept even more attractive.
Alternatives
There are four basic options to transport off-
shore gas production to market or to anoth-
er location for processing or use.
1. Gas gathering and transmission to
shore in a gaseous phase by pipeline.
2. Volume reduction through either liq-
uefaction or compression followed by
marine-vessel transportation
3. Conversion to other products by
changing the methane molecule followed by
marine-vessel transportation to markets.
4. Conversion to other energy forms such
as electric power and transmission to shore
by subsea cable.
Marine CNG Overview
During the past 30 years, there have been sev-
eral attempts to develop a commercially viable
CNG carrier. In the late 1960s, a CNG ship
with vertical pressure bottles for CNG storage
was tested in New Jersey harbor. This and sub-
sequent attempts failed to produce a commer-
cial CNG carrier primarily because of the pro-
hibitively high cost of the pressure containers.
The development of a new type of pres-
sure-containment vessel, called a coselle, by
Cran & Stenning of Calgary promises to
improve the economics of CNG marine trans-
portation. EnerSea Transport of Houston,
with the volume-optimized transport and
storage (VOTRANS), and TransCanada
Pipelines of Calgary, with the gas transporta-
tion module (GTM), are in the process of
commercializing their CNG technologies as
alternatives to coselle. The major focus of all
proponents is on increasing the gas-to-con-
tainer weight ratio through improved materi-
als (nonmetallic components, higher-yield
steel) or through increasing the weight per
volume of gas by finding an optimum pres-
sure/temperature relationship.
Coselle. The idea behind the coselle is to cre-
ate a large but compact CNG storage system
using pipe. A typical coselle consists of several
miles of small-diameter pipe coiled into a
carousel (Fig. 1). A large portion of the capital
cost of a typical CNG carrier is the gas-con-
tainment system and associated safety and gas-
control systems. Therefore, the safety and cost
of the gas-containment system is critical to the
economics of CNG marine transportation.
The cost of coselles is a fraction of that of con-
ventional pressure bottles, and yet they main-
tain at least an equivalent safety level. For
example, a 330-MMcf-capacity coselle CNG
carrier would cost approximately U.S. $110
million, whereas an equivalent CNG bottle
ship would cost at least U.S. $300 million.
A typical coselle CNG carrier was designed
around a double-hulled, 60,000-ton-dead-
weight bulk-carrier concept to develop the
ship requirements and cost. In this design,
coselles are carried in stacks six high within
the ships hold. In total, there are 18 stacks of
coselles (108 coselles per ship). Each coselle
holds 3.2 MMcf of sales gas, so the capacity
of the ship is approximately 345 MMcf. For
safety, the holds are filled with nitrogen to
eliminate the danger of fire below deck. All
valves and fittings are installed above deck to
facilitate servicing.
VOTRANS. The VOTRANS system has
been defined as a total gas transportation
system, not just another gas-container con-
cept. A volume-optimized gas-delivery
process includes dedicated transport ships
that carry long, large-diameter pipes in an
insulated cold-storage cargo package.
Loading and unloading is similar to other
CNG concepts but at much lower pressure.
Ship-design options have been developed
for custom-designed ships with horizontal or
vertical tanks for storage. Horizontal tanks are
preferred for larger capacities. It is believed
that these large-capacity ships present the
opportunity for CNG to be transported from
higher-rate production centers and over
much greater distances than commonly con-
sidered economically advantageous. Options,
including conversion of existing single-hull
tankers to CNG transportation service for
capacities from 300 to 1,200 MMscf, were
considered and are available. The conversion
options have received considerable interest
because of their potential for further reducing
costs and schedule. It is believed that the first
VOTRANS could be in operation by 2005 if a
suitable project is found.
GTM. GTMs are composite reinforced pres-
sure vessels made from high-strength, low-
This article, written by Assistant
Technology Editor Karen Bybee, con-
tains highlights of paper SPE 77925,
Marine Transportation of Compressed
Natural Gas: A Viable Alternative to
Pipeline or LNG, by Jan V. Wagner,
Fluor Canada Ltd., and Steven van
Wagensveld, Fluor Australia., pre-
pared for the 2002 SPE Asia Pacific Oil
and Gas Conference and Exhibition,
Melbourne, Australia, 810 October.
For a limited time, the full-length paper
is available free to SPE members at
www.spe.org/jpt. The paper has not
been peer reviewed.
Mari ne Transportati on of
Compressed Natural Gas
Gas Pr ocessi ng
77925.qxd 8/14/03 6:59 AM Page 73
74 SEPTEMBER 2003
alloy (HSLA) steel pipe reinforced with a
high-performance composite material. The
material has outstanding corrosion resistance
and high strength. Composite-reinforced
GTMs provide a lightweight, high-pressure
vessel for use in truck, rail, barge, and ship-
ping applications that exceeds the perfor-
mance of all-steel vessels and at a lower cost.
GTMs are approximately 35% lighter
than conventional all-steel CNG transporta-
tion alternatives. They have a competitive
advantage because more gas and less con-
tainer weight are transported in every trip.
Because GTMs can be built significantly
larger than conventional high-strength-steel
gas cylinders, the amount of manifolding
required is significantly less.
A CNG carrier using GTMs to carry
approximately 350 MMcf of natural gas
would cost approximately U.S. $100 to 125
million, and the tubes would weigh less
than 35,000 tons. A typical Panamax carrier
with 60,000-tons-deadweight cargo capaci-
ty could hold more than 450 MMcf of nat-
ural gas. The basic GTM design consists of a
single or double joint of large-diameter
HSLA steel pipe with heads welded on both
ends. The pipe is composite reinforced with
a proprietary process to provide a significant
increase in the pressure-containing capabil-
ity of the pipe with minimal weight
increase. The technology behind the GTM
is not new or unproved but is an extension
in size and manufacturing processes.
CNG
The principal gas-transportation options are
LNG and pipelines, with CNG as a niche
application. The characteristic difference
between a CNG project and an LNG project
is that the onshore facilities required for CNG
are comparatively simple and inexpensive.
The characteristic difference between a CNG
project and a pipeline project is that the
pipeline is fixed and may have to transit sev-
eral political juristictions, whereas CNG car-
riers move directly between the host coun-
tries and can be redeployed
easily in response to chang-
ing market demands. These
characteristics result in the
following project advan-
tages for coselle CNG.
A coselle CNG project
can begin at modest vol-
umes with a few ships and
match growing demand by
increasing compression
and adding ships.
Coselle CNG ships are
basically standard bulk car-
riers and could be built in
most reasonable-sized shipyards, so prices
would be competitive.
CNG is energy efficient. Energy con-
sumed in a CNG project is approximately
one-half that of an LNG project, one-fourth
of a methanol project, and one-eighth of a
gas-to-liquids project.
Loading and unloading is possible from
offshore terminals, so harbors and populat-
ed areas can be avoided.
Potential CNG Opportunities
Market studies were undertaken to examine
the worldwide potential for CNG technolo-
gy. Many situations were found in which
currently stranded gas could be monetized.
The main opportunities for a CNG project
are believed to be the following.
Shipping gas from a producing region to
consumers separated by sea.
Shipping associated gas from offshore
platforms to nearby infrastructure that can
either use the gas or deliver it to other markets.
Floating production, storage, and offload-
ing (FPSO) units are expanding the com-
mercial recovery of oil in deep water. The
cost of reinjecting or piping associated gas is
cited as the most limiting factor of the FPSO
field-development concept for deep waters.
A CNG carrier could take the gas directly
from the deepwater FPSO unit and deliver it
to a nearby market or into existing facilities
in shallower water. Examples are Hibernia
or Terra Nova, FPSO-based oil production
projects in Angola and Nigeria, and future
potential FPSO projects in the Gulf of
Mexico. Another example is moving gas
from a landfall terminal to remote/inaccessi-
ble population centers such as on the
Norwegian coast where pipelines are diffi-
cult to install.
In many instances, pipeline projects oper-
ate initially with underutilized pipelines. In
this situation, CNG could be used to start
initial deliveries and postpone construction
of a pipeline until economic volumes are
available. Once the pipeline was construct-
ed, the ships could be redeployed elsewhere.
This scenario could be applicable to initial
gas development offshore Newfoundland.
Marine CNG technology makes a new
kind of FPSO unit possible, one that
exploits gas as its primary objective. A gas
FPSO unit coupled with a CNG transporta-
tion system has the potential to allow
exploitation of deepwater gas fields with
limited reserves. The gas FPSO unit and
CNG ships could be moved from field to
field, extending the life of the infrastructure
and spreading capital cost over more than
one reservoir.
Joint Industry Project (JIP)
In 1999, Fluor participated with seven other
companies in a JIP to evaluate and confirm
the technical and economic feasibility of the
CNG coselle concept. The study found the
concept to be technically feasible and well
defined. On the basis of relatively detailed
and reliable cost estimates, the work con-
firmed the economics and it is believed that
the concept offers complementary opportu-
nities to pipelines and LNG within certain
capacity ranges and transportation dis-
tances. Recognizing the need for a reliable
simulation tool, Fluor developed a propri-
etary dynamic simulation model to address
basic technical issues for any CNG concept
such as controlled loading and unloading
and emergency depressuring. The model
recently was used to help the coselle and
GTM proponents identify transient gas and
container-metal temperatures, pressure and
flow profiles, and liquids-formation rates.
The model is a useful tool in supporting
basic decisions regarding the overall con-
cept configuration, liquids-handling provi-
sions, and construction-material selection.
Final Observations
On the basis of available industrial data and
mostly conceptual-level study work, it is
believed that a CNG marine-transportation
concept has the following range of applica-
bility and advantages when compared with
LNG and pipelines.
CNG is less costly where transport dis-
tances are between 500 and 2,000 miles and
volumes are less than 600 MMscf/D.
The CNG concept can facilitate projects
with initial volumes less than 300 MMscf/D.
As much as 80% of the investment for
CNG is in the ships, but because the ships
are redeployable assets, they present less
risk than onshore facilities.
CNG technology is relatively simple,
and several systems are undergoing rigorous
testing programs and soon will be ready for
commercialization. JPT
Fig. 1Coselle details.
77925.qxd 8/14/03 7:00 AM Page 74
SEPTEMBER 2003
75
BP Trinidad and Tobago LLC has an
upstream gas business with large process
and export capacity, significant market
growth opportunities, and a large portfo-
lio of development and exploration
opportunities. With such an asset, there
must be a process to facilitate and guide
capital-spending decisions that underpin
a strategy for delivering a gas growth
agenda. The process must accurately
identify preinvestment opportunities that
can be leveraged toward future growth.
Introduction
Abundant gas resources, a strategic location,
a stable economy, and a skilled labor force
make Trinidad and Tobago an ideal location
for gas monetization. With close proximity
to the Gulf of Mexico and an improving local
fabrication industry, the costs of engineering
and construction activities are very competi-
tive. The country already has a strong
domestic gas demand from the local petro-
chemical industry, and there are three con-
tracted liquid-natural-gas trains for export to
the Caribbean, eastern U.S., and Europe.
The Columbus basin offshore east
Trinidad is gas prolific with likely resources
yet to be found. High confidence in the
future of the basin supports a scenario of
increased gas supply for new markets. The
strategy for E&P of these resources must be
well timed to meet demand from existing
contracts as well as new-market commit-
ments. All aspects of exploration, develop-
ment, and production have to be planned
carefully to reduce cycle time, capital spend-
ing, and operating costs.
Gas Market
As of January 2003, BP has secured gas sup-
ply contracts totaling approximately
1,700 MMscf/D. Current production is
approximately 1,400 MMscf/D, with ongo-
ing expansion expected to yield the balance
of contracted production in the second half
of 2003. Negotiations are under way that
could add approximately 500 MMscf/D in
sales by the end of 2005.
A typical sales contract carries a target daily
sales volume with an associated excess deliv-
erability opportunity that can be called by the
purchaser. Because deliverability opportuni-
ties are additive, a significant volume of nor-
mally shut-in deliverability is retained to sup-
port daily sales volumes. In addition to the
excess deliverability associated with individ-
ual contracts, an additional amount of stand-
by cushion gas is retained. Primary drivers for
this additional shut-in gas volume include
risk mitigation against unforeseen lost deliv-
erability associated with facilities or wells,
flexibility to perform selected infrastructure
maintenance or upgrades, and opportunities
to continue with reservoir data gathering for
optimum depletion planning.
Gas sales contracts are with multiple pur-
chasers and have different terms. For exam-
ple, some contracts have dedicated reserves
that can be delivered only to that contract.
These purchasers normally will accept gas
from undedicated pools but will not recip-
rocate by allowing their dedicated pools to
be sold to other contracts.
Managing daily gas sales consists of allo-
cating production from existing assets to
meet contract requirements. Sustaining
near-term requirements including short-
term growth in sales is achieved through
development drilling in the base assets.
When a combined depletion plan profile
from the base assets (including existing and
planned wells) is superimposed on a cumu-
lative contract plot, the inevitable question
arises of what to do next when the short-
term list of supply options is exhausted.
Portfolio Management
The planning process for filling projected
shortfalls in a long-term contract, or group
of contracts, requires a thorough under-
standing of what is currently available in the
discovered but undeveloped reserves port-
folio as well as in the exploration but yet-to-
be-found reserves portfolio. From either
opportunity listing, or from a select combi-
natioin of the two, an iterative process can
determine the optimum path for fulfilling
the contract requirements.
Discovered Portfolio. There is an attractive
portfolio of discovered reserves that are yet
to be developed. The portfolio consists of
opportunities varying in terms of pool size
and development complexity. Using the
subsurface evaluations from which reserves
are quantified, characterized, and booked, a
high-level development plan can be pre-
pared for the new supply options. Numbers
of wells, completions, and infrastructure
can be envisioned to bring each option on
production. Also, a production profile for
each well can be generated, given certain
assumptions about completion type.
The optimized order of the new supply
options can be determined through an iter-
ative process. The supply options can con-
sist of a single well rather than several wells
grouped to make up a new field. Normally,
when a new platform is required to access a
new field, multiple wells are planned, but all
wells may not be required consecutively to
meet the deliverability profile. When this
occurs, fields are broken up into drilling
phases that include one or more wells. The
first phase carries the burden of the costs for
access to infrastructure and markets. High-
quality and low-quality wells can be sepa-
rated, and it may be more economical to
sequence drilling phases among several new
fields rather than to develop field by field.
Exploration Portfolio. An aggressive
exploration campaign is expected to add a
significant number of new supply opportu-
nities during the coming years. As more gas
This article, written by Assistant Tech-
nology Editor Karen Bybee, contains
highlights of paper SPE 81098, A Proc-
ess for Planning New Developments in
an Upstream Gas Business, by
Shivanand Maharaj, SPE, Eric
Hennington, SPE, Michael Daniel,
SPE, and I. Tenny Wibowo, BP Trinidad
and Tobago LLC, prepared for the 2003
SPE Latin American and Caribbean
Petroleum Engineering Conference, Port-
of-Spain, Trinidad, 2730 April.
For a limited time, the full-length paper
is available free to SPE members at
www.spe.org/jpt. The paper has not
been peer reviewed.
Pl anni ng New Devel opments i n
an Upstream Gas Busi ness
Gas Pr ocessi ng
81098.qxd 8/14/03 7:05 AM Page 75
76 SEPTEMBER 2003
is found, the opportunity to grow the sales
market increases. However, the market can-
not grow infinitely, so valuing the yet-to-be-
found reserves is an important component
of underpinning growth beyond that sup-
ported by existing or undeveloped assets.
The benefits of valuing the exploration
prospects properly go beyond simply provid-
ing the confidence to seek more gas con-
tracts. Selecting when and how to preinvest
for growth also is an important outcome. By
understanding where the most-valuable
prospects are likely to be successful, ongoing
enhancements to the infrastructure can
include some preinvestment in their current
scope. This may include an acceleration of
capital spending but may be at significant
savings that serve to offset the time value
component. Examples include increasing the
size of an interfield pipeline, preinstalling ris-
ers on platforms, or installing a platform at a
location from which both known and yet-to-
be-found reserves can be accessed.
Exploration prospects are less well under-
stood than discovered fields, but to value the
portfolio in terms of the broader growth plan,
some means of normalizing each prospect as
a pseudodiscovered field is required. The
process for normalizing exploration prospects
begins with key information from the explo-
ration teams. First, the prospect has a most
likely resource potential that includes total
risk-weighted gas likely to be discovered by
the well and the accompanying gas in adja-
cent or adjoined pools. Exploration predrill
resource estimates on a prospect basis can be
converted to most likely discovered reserve
estimates that reflect historical statistics.
Next, the explorationists must classify the
prospect in terms of complexity to develop
from a subsurface perspective. Depending on
the classification, correlations in the form of
multipliers from the development plans of
existing assets are used to determine likely
recoverable reserves and number of comple-
tions required to extract them. Once the num-
ber of completions and the reserves associated
with each is known, production profiles can be
generated for each completion, total wells can
be estimated, a development scheme for the
entire opportunity can be scoped out, and a
development cost associated with the prospect
can be prepared. Once this is accomplished,
the exploration resource is in a form compara-
ble to the discovered portfolio and can be
included in the iterative sequencing process.
Cost and Schedule
Other significant factors that affect the
process are cost estimates for wells and infra-
structure and schedules for their delivery.
Production profiles have to reflect the pro-
ject execution timing required before the
production is available. Future well and
facilities costs are based on existing cost in-
formation with considerations for savings
from efficiency and technological advances.
Drilling and completion costs as well as
engineering, procurement, and construction
costs are reduced by a factor in future years.
The project planning cycle uses a capital-
value process that takes projects through five
different stages: appraise, select, define, exe-
cute, and operate. Project sanction occurs at
the end of the define stage. This cycle usually
takes approximately 3 years from appraise to
operate for a new discovery that is developed
conventionally with a dedicated platform.
For a typical development, the first cost esti-
mate is the appraise-stage cost, or Class 4 cost
estimate, with an accuracy of 30% that serves
as the first-level cost evaluation in the selection
process. A number of software packages are
available that can be used to determine the
development cost for the scenario.
Information required as input for the appraise-
stage cost estimate includes reserves character-
istics, water depth, fluid properties, number of
development wells, development concept, and
distance to nearest infrastructure.
Development Concepts. Four well types con-
sidered are high-pressure/high-temperature
wells, extended-reach wells, smart wells, and
conventional deviated wells. Application of
these will be dictated by reservoir complexity.
Facility types considered include the minimal
normally unmanned-installation platform
with no processing capability or living quar-
ters, subsea-template development for deeper
waters, and stand-alone multiuse platforms
that may include processing and living quar-
ters. Another consideration is development of
low-pressure reserves. Timing for producing
low-pressure reserves is determined by field
depletion plans that dictate timing for installa-
tion of low-pressure facilities.
Applying the Process. When the production
base is no longer able to support the contrac-
tual deliverability requirements, another gas
supply will be needed. The first step in devel-
oping a new field is to ensure that all other
base supply options are exhausted. The
upstream field-development planning process
uses an integrated planning tool that models
gas production from various reservoir deple-
tion plans. The depletion plans for existing
fields, the discovered fields, and future
prospects to be discovered represent the sup-
ply. Current demand, as well as assumed
future demand, is the driver in the process.
The planning process integrates a gas
market demand end state, field reserves
depletion plans, development-cost informa-
tion, and the required infrastructure for pro-
duction and export. After several iterations,
the output is a long-term gas supply plan
illustrating activity schedule, field sequence,
production profile, deliverability require-
ments, and development-cost schedule.
The data required to be processed include
condensate and gas profiles, number of wells,
reserves, facility type, pipeline information,
cost of facilities and wells, time for construc-
tion, gas and liquid flow process, and the
demand profile. Scheduling of wells to be
drilled and future projects is based on deliver-
ability requirements. Operator logic input
involves sequencing the fields on the basis of
key objectives such as reserves size, location,
and development cost. An important criterion
is to keep the processing points full to ensure
that deliverability requirements are met and
also to minimize capital expenditures.
Production from new fields will be directed to
process locations with spare capacity.
The final aspect of the iterative planning
process involves economic analysis of the
development plan to ensure that the best
options for field development are optimally
sequenced. The net present value of indi-
vidual projects is evaluated to determine
their place in the development queue. A
likely next-field development is compared
with other fields or with an opportunity
within the existing base such as developing
an adjacent pool by extended-reach drilling.
Once the optimized development plan is
set, future capital-spending decisions can be
made. The output also can facilitate explo-
ration strategy by identifying where the
most valuable gas is located and when it will
fit into the portfolio development plan.
The development plan requires updating
when there is new information, such as a
new field discovery, or any technology
advance that affects cost or market changes.
A key consideration in the process is con-
tinuous tracking of performance from
developed assets and adjusting the new-
field timing accordingly.
Conclusions
1. An integrated planning process has been
developed that guides future upstream devel-
opments and provides capital-spending pro-
jections in the short, medium, and long term.
2. The planning process integrates all
aspects of the upstream gas value chain and
fosters a high level of communication and
connectivity within the organization.
3. The planning process allows the com-
pany to determine its capability to supply
gas to future contracts in a very competitive
gas business. JPT
81098.qxd 8/14/03 7:05 AM Page 76
SEPTEMBER 2003
77
The feed source of a proprietary molec-
ular-gate CO
2
-removal system is a
hydrocarbon-rich, water-saturated asso-
ciated gas from waterflood operations.
The feed CO
2
concentration varies and
is typically more than 30%. The unit
reduces the CO
2
level to less than 2%.
The unit can remove the CO
2
, heavy
hydrocarbons, and water, yielding
pipeline-specification gas for sale to the
local natural-gas utility company.
Introduction
A gate-type nitrogen-rejection system has
operated for more than 2 years removing
18% nitrogen from glycol-dehydrated well-
head gas while producing pipeline-specifi-
cation product at an unattended site at
Hamilton Creek in southwest Colorado.
The adsorbent at the facility is a titanium sil-
icate molecular sieve that can be manufac-
tured with a desired pore size (for nitrogen
rejection, a 3.7-angstroms pore). This pore
size permits nitrogen (3.6 angstroms) to
enter the pore while the larger methane
molecule (3.8 angstroms) does not fit and
passes through the fixed bed of adsorbent at
high pressure. In this manner, the system is
similar to fixed-bed driers in which water is
adsorbed from the natural-gas feed with the
dry product produced at high pressure.
The adsorbent is in a pressure-swing-
adsorption (PSA) system consisting of car-
bon steel adsorber vessels and a valve/piping
skid network alongside the skid to control
the feed, product, and tail-gas flow between
the adsorber vessels. Adsorption occurs at
high pressure (400 psig in the Hamilton
Creek unit) with the adsorbed nitrogen
removed through a single-stage vacuum
pump and discharged at low pressure.
CO
2
Removal
One of the initial advantages recognized for
the nitrogen-rejection technology is that
CO
2
(3.4 angstroms) is a smaller molecule
than nitrogen and can be removed when
present in a system designed for nitrogen
removal. This coremoval of CO
2
is attractive
to project economics and operation because
it eliminates the need for a separate amine-
treating unit.
The PSA systems have been used, in a few
instances, for the bulk removal of CO
2
from
methane (e.g., use of activated-carbon
adsorbent). The PSA system is simple, but
the technology is limited by a relatively low
selectivity between methane and CO
2
with
the use of conventional adsorbents.
Therefore, a large amount of methane is
coadsorbed with the CO
2
, leading to high
losses of methane into the tail gas and a
need for large adsorbent inventories.
The low selectivity of CO
2
over methane
was addressed with the gate-type removal
system by tailoring the pore sizes of the
adsorbent and designing a low methane-
adsorption level on the adsorbent. Use of a
single-stage vacuum pump for regeneration,
as well as recycling to feed, of a methane-
rich stream further enhances this inherent
adsorbent selectivity to provide high
methane-recovery rates.
The CO
2
removal application was not ini-
tially targeted for gate-type technology, but
in mid-2001, Tidelands Oil Production Co.
requested the removal of CO
2
from a heavy-
hydrocarbon-rich associated-gas stream at
its Long Beach, California, facility.
Long Beach Facility
The Wilmington oil field has been a prolif-
ic oil producer since its discovery in the
early 1930s. Current production is main-
tained by use of a waterflood operation.
The urban location poses environmental
and operational concerns. Maintaining
ground surface levels and oil production
requires the removal and subsequent rejec-
tion of 200,000 B/D total liquids, of which
6,500 B/D is oil. The field also produces
1.5 MMscf/D of associated natural gas.
The associated gas contains more than
30% CO
2
, a smaller level of nitrogen, and a
large quantity of heavy hydrocarbons. It is
produced at approximately 20 psig. Some
of the associated gas is used in the facility as
fuel. After local fuel consumption, more
than 500 Mscf/D of excess fuel is available
that previously was flared. Upgrading the
contaminated associated gas to pipeline
quality was highly desirable. However, dis-
tracting the ongoing operations with a
complex facility or one that would compro-
mise the environment was not acceptable.
Molecular-Gate System
The system shown in Fig. 1 is relatively
small, treating approximately 1.0 MMscf/D
of associated gas. Even at this small size,
the elimination of flaring and the revenue
generated through the sale of pipeline-qual-
This article, written by Technology Editor
Dennis Denney, contains highlights of
paper SPE 80602, Production of
Pipeline-Quality Natural Gas with the
Molecular Gate CO
2
-Removal Process,
by James Wills, SPE, and Mark
Shemaria, SPE, Tidelands Oil Pro-
duction Co., and Michael J. Mitariten,
Engelhard Corp., prepared for the 2003
SPE/EPA/DOE Exploration and Production
Environmental Conference, San Antonio,
Texas, 1012 March.
For a limited time, the full-length paper
is available free to SPE members at
www.spe.org/jpt. The paper has not
been peer reviewed.
Pi pel i ne-Qual i ty Natural Gas
After Mol ecul ar-Gate CO
2
Removal
Gas Pr ocessi ng
Fig. 1Long Beach facility molecu-
lar-gate system.
80602.qxd 8/14/03 7:04 AM Page 77
78 SEPTEMBER 2003
ity gas to the local gas utility company pro-
vided an acceptable return for the project.
One challenge in the design was the level
of nitrogen in the feed stream. Because the
gas utility company imposed a total-inert
specification of 4% and the system is not
designed to remove nitrogen, excess nitro-
gen in the feed could lead to the system
being noncompliant with the pipeline spec-
ification, even if CO
2
was removed com-
pletely. This concern was addressed by
reducing nitrogen sources.
The contaminated associated gas is split
into a compressed stream for feed to the
gate unit and a bypassed stream. The gate
unit removes CO
2
, water, and heavy hydro-
carbons, producing pipeline-quality gas
that is metered and sold.
The gate-system adsorbents allow modi-
fying one or more properties, including
pore size, cation exchanged with the adsor-
bent, and the amount of binder used. Such
modifications change the adsorption of the
targeted molecules or other feed compo-
nents. In feeds that contain heavier hydro-
carbons, the adsorbents can remove the
heavy components. The adsorbent also can
be designed to pass a level of the ethane
and propane into the product stream. The
compound bed of adsorbents used at the
Long Beach facility adsorbs water and
heavier-hydrocarbon components and
then removes them with the tail gas. This
low-pressure tail gas is blended with
bypassed gas to provide fuel for the gas
engines driving pumps that reinject water
into the formation.
Coalbed Methane
Coalbed methane is a growing source of
natural gas and accounts for approximately
7% of U.S. gas production. Often, the gas is
produced from shallow wells and is very
lean, rarely containing substantial quanti-
ties of hydrocarbons heavier than methane.
The produced gas is water saturated and
often contaminated with CO
2
. The level of
CO
2
varies widely (e.g., 4 to 5% in the
Powder River basin, 12% in the San Juan
basin, and much higher in deeper forma-
tions containing heavy hydrocarbons).
The wellhead pressures are low, and a
compressor often is used to boost the pres-
sure for gathering-system delivery. The gas
is compressed further to high pressure and
processed to pipeline specifications. Be-
cause the pipeline requirement is at elevated
pressure, the gate system removes the CO
2
at an elevated pressure that can range from
80 to 800 psig.
It is common for coalbed methane to
contain CO
2
, and many amine-based sys-
tems are used for its removal. Generally,
coalbed methane is H
2
S free, but corrosion
does require consideration. Typically, a gly-
col dehydration unit for removing water to
meet the pipeline specification is placed
downstream of the amine system.
The carbon steel construction of the dry
gate system reduces the concern about cor-
rosion. However, because tail gas from the
vacuum pump contains water and CO
2
,
prevention of water carryover into the gas-
engine fuel is required. Removal of CO
2
and
dehydration of the feed stream result in a
water-free pipeline gas in a single step.
To maximize methane recovery, a low-
pressure recycle stream is extracted during
the process cycle and recycled back to the
main feed compressor. This step requires an
incrementally larger feed compressor but
enables high methane-recovery rates, typi-
cally 95%.
Tail-Gas Use
Because the gate system does not recover all
the methane and loses a portion to the tail
gas, use of the tail gas optimizes the process.
When coalbed-methane feed gas contains
less than approximately 8% CO
2
, the tail gas
from the gate system has a sufficient heating
value to provide fuel to the feed compressor.
Because the main feed compressor typically
will consume approximately 5% of the
available feed, a gate PSA unit operating at
95% recovery of methane allows the result-
ing tail gas to be in balance with the fuel
demands of the main feed compressor.
Therefore, essentially no methane is lost
from the system.
When coalbed methane contains higher
levels of CO
2
, tail gas from the gate system
has a low heating value. In this case, the sys-
tem can be configured to split the tail gas
into a higher-heating-value portion suitable
as gas-engine fuel and a lower-heating-value
component. This design aims to minimize
the loss of methane to the low-heating-value
portion of the tail gas. While this method
solves the need to make use of the tail gas, it
adds cost. Alternatively, depending on the
overall fuel demand, a portion of the feed
stream (or recycle stream) can be blended
with the tail gas to increase the heating
value for use in the gas engine.
The level of CO
2
in the feed can vary over
timeas reservoir pressure decreases, the
CO
2
level can increase. A flexible system is
required, and some increase in capacity is
possible by cycling the adsorbent beds
more often. If substantial flow-rate increas-
es are anticipated, the system can be
designed to add adsorber vessels and adsor-
bent for debottlenecking.
Oxygen-Contaminated Feeds
Oxygen can be present in coalbed methane
at low-pressure operations. Even when not
present in the reservoir, oxygen can be
introduced by vacuum compressors or with
the addition of wells to a gathering system.
In a gate system designed to remove
CO
2
, oxygen will pass through the adsor-
bent bed and be present in the methane
product stream. Generally, small quantities
of oxygen are not a concern, but the oxygen
specification should be clarified with the
pipeline company. A wide range of oxygen
specifications exist, from near zero to a few
thousand parts per million.
An important aspect is that oxygen pass-
es through the adsorbent bed without pre-
senting a corrosion issue. In contrast,
amine-solvent units can react with trace
oxygen to form corrosive components that
are a major operational concern. Gate-sys-
tem nitrogen rejection, although designed
for nitrogen removal, also removes most of
the oxygen.
Natural-Gas Upgrading
In most cases of natural-gas upgrading, feed
is available at high pressure and a slightly
different flow scheme is applied. Making
use of the tail gas is the main consideration
in applying the gate system. In natural-gas
applications, typical recycle compressors
have a fuel demand of approximately 2% of
the available feed; thus, with typical recov-
ery rates of 95%, excess fuel exists.
Unlike most coalbed-methane feeds, nat-
ural gas also contains at least some level of
heavier hydrocarbons. When treating natur-
al-gas feeds having heavy hydrocarbons,
some are partly removed with the CO
2
through adsorption. Where justified by the
quantity of the natural-gas-liquid (NGL)
components, additional processing can be
applied to recover them as a liquid.
NGL Recovery
In treating natural gas, removing heavy
hydrocarbons with the CO
2
must be
addressed. These components can be used
as fuel with the tail gas, but this application
may not always be possible or may result in
excess available fuel. The simultaneous
removal of heavy hydrocarbons with CO
2
can help meet pipeline dewpoint restric-
tions, but this generally is viewed as a dis-
advantage because the system is penalized
by the loss of the heavy components with
the CO
2
impurity. The recovery of NGL
components or their use as fuel is always a
consideration for natural-gas upgrading,
and removing them from the feed or gate-
system tail gas can be economical. JPT
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