The Sweet in the Sour – Middle Eastern Gas Reserves
Some of the Middle East's hydrocarbon reserves have been seen as too costly to develop. But global demand now means cost-effective technology for processing sour gas is a top priority. Jim Banks reports.
Prices for oil and natural gas may be falling sharply but no one doubts that long-term global demand is still rising. To fulfil this demand energy companies continue to step up the search for new reserves and develop new technology to ensure that recovery levels are as high as possible and that production methods are cost efficient.
Energy producers know that low-cost sources are running out, so are making greater efforts to make more complex, harder-to-reach hydrocarbon reserves economically viable.
The vast resources of untapped hydrocarbons in the Middle East mean that much development is focused there, partly because local demand for natural gas is rising fast, although this brings its own set of challenges.
Big energy companies are particularly focused on sour gas fields, notably in Abu Dhabi, which have previously been overlooked.
About a third of the world's natural gas reserves contain high concentrations of contaminants and so are termed 'sour gas'. The defining chemicals are often hydrogen sulphide (H2S) and carbon dioxide (CO2) though in some cases other sulphur compounds such as carbonyl sulphide (COS) and mercaptans are also found.
Low levels of contamination pose few problems but the higher concentrations in sour gas demand more intensive, more expensive processes.
Ingenuity and efficiency
All producing countries in the Middle East are stepping up their efforts to exploit sour gas, often in partnership with western energy companies, reversing the trend for hydrocarbon production in the region to concentrate on oil. Now a key target is to efficiently process sour gas to improve recovery of both liquids and natural gas.
"As the world's need for energy increases, the ingenuity of the energy industry needs to increase as well," says Andy Brown, Shell's chairman for Qatar, heralding the recent workshop on sour gas development attended by the likes of Qatar Petroleum, Gazprom and Qatargas.
"We need to look for new sources of energy, including fields that were perhaps too difficult to develop before."
In the past Shell has tended to develop gas fields with low contamination, but still has 25 highly contaminated sites in production. Some 30% of Western Canada's reserves are sour, for example, but the scale of the challenge in the Middle East is far greater.
The UAE holds the world's fifth-largest gas reserves – approximately 214 trillion cubic feet – of which a large proportion is sour.
Big potential is there but technological innovation will be the key to making such reserves viable from technical and financial perspectives.
Investment flows in
Many factors push up the cost of exploiting sour gas reserves, most notably the fact that its contaminants make it highly poisonous, adding to health and safety concerns. It is also highly corrosive to iron, threatening flow lines and production equipment with sulphide stress cracking.
The complexities of drilling, completion, engineering, handling and storage are great, as are the environmental implications.
There are, however, many opportunities for companies tackling sour gas. Processing sour gas not only produces sweet gas but the acid gas left when all hydrocarbons have been removed can also be processed further to produce sulphur, which can also be sold.
Abu Dhabi, for instance, could produce more than 10,000t of sulphur a day once its gas projects come online.
The sale of sulphur may not be all that easy as the market is fairly saturated but that is less of a constraint on sour gas production than in the past, such is the global demand for energy. More beneficial to the cost profile may be acid gas injection to maintain reservoir pressure and improve oil well recovery rates.
Sweet gas previously injected could be diverted elsewhere.
Under today's conditions the opportunities seem to outweigh the costs of sour gas development and companies are willing to pay for access to reserves in the Middle East. ConocoPhillips and the Abu Dhabi National Oil Company (ADNOC) are set to develop reserves in UAE, with costs estimated at more than $10bn.
The Shah sour gas field, containing nearly 30% H2S, is one of few open to western companies.
Jim Mulva, CEO of ConocoPhillips, sees the project as an important step in establishing a presence in Abu Dhabi, saying that "our extensive experience in the development of high-sulphur gas fields and ability to employ state-of-the-art technology complement our strategy to invest in projects that expand our global presence and help meet the growing demand for energy around the world."
Shell, which also has substantial experience of sour gas, is looking at UAE's Bab Arab gas field with the Abu Dhabi Onshore Company (ADCO) and Abu Dhabi Gas Industries (GASCO). For ten years it has been assessing the technical and economic feasibility of injecting sour or acid gas into wells to improve liquids recovery and produce sweet gas.
Norway's Statoil is among the foreign partners in the development of the South Pars gas field in Iran which holds about 8% of the world's reserves and will ultimately produce about 3.6 billion cubic feet of sour gas a day.
The technology challenge
In the Middle East, technology for handling acid gas is relatively limited. Given that it could increase oil recovery by 10% and is more effective that sweet gas it is a priority to develop systems that can compress it and inject it at high pressures.
First, of course, the extraction and processing of sour gas must be made more effective and efficient. ADNOC is pushing ahead, for while it has experience developing reservoirs with up to 10% H2S, its undeveloped reserves have H2S levels of 13-30%.
Elsewhere, notably in Canada, natural gas fields with more than 35% H2S have been successfully developed, so expertise is available to inform efforts in the Middle East. Total's participation in sour gas projects in the region and around the Caspian Sea has fuelled the design of systems to handle gas containing up to 60% H2S and CO2.
Total's Sprex process targets bulk pre-extraction of H2S in Middle East projects. It has recently unveiled, along with clean energy technology company CrystaTech, a new downhole sulphur recovery technology using solvents to absorb sulphur and carry it out of the well bore.
In piloting the regenerable technology, Total hopes it will unlock large sour gas reserves by improving their economic and environmental viability.
Shell is working on several processes to remove contaminants in the most effective way possible. First it is developing the ADIP process, which uses a water and amine solvent to remove H2S and CO2 from natural gas and LPG streams. In addition it is using the Sulfinol process, which targets the same contaminants with a water, amine and sulpholane solvent to combat high levels of organic contamination, and the Shell Claus off-gas treating process, which improves recovery rates for sulphur from acid gas.
High levels of investment emphasise the importance that western energy companies place on the sour gas fields in the Middle East. Nevertheless, few will have the opportunity to access these reserves, although their experience and technology will no doubt be vital in some projects.
Abu Dhabi's GASCO is showing that it can stand on its own two feet and is reportedly looking to develop the Hail sour gas field without partnering with western companies.
What is clear is that competition for technology contracts and access rights will be fierce and costs will be high, but the sour gas opportunity cannot be passed up.