Shell’s LNG Canada Seen as Tip of the LNG Mega-Project Iceberg

[thackney]

Shell’s LNG Canada Seen as Tip of the LNG Mega-Project Iceberg
https://gcaptain.com/shells-lng-canada-seen-as-tip-of-the-lng-mega-project-iceberg/
October 2, 2018

The launch of a massive liquefied natural gas (LNG) export project in Canada has finally fired the starting gun on a wave of plan approvals around the world, needed to avoid a supply crunch after 2020.

Royal Dutch Shell said it would export LNG from Western Canada by 2025 after approving a $14 billion project, hot on the heels of Qatar’s commitment last week to expand its facilities.

The two announcements, adding 37 million tonnes a year (mtpa) to the 290 million tonnes traded in 2017, are just the start of project approvals – known as final investment decisions (FIDs) – that have been waiting in company drawers while LNG prices recovered from a three-year slump.

“We believe 2019 could be the busiest year of LNG FIDs ever,” Wood Mackenzie’s director of North America gas, Dulles Wang, said.

Despite a slump in global LNG prices between 2015 and 2017, many had long worried there would be a global supply gap at some point after 2020 due to broadly fast-rising demand and the lack of new export projects to produce corresponding supply.

Several projects that had been touted for years, such as Shell’s LNG Canada venture, were put on the backburner....

[thackney]

Japan Liquefied Natural Gas Import Price Chart
https://ycharts.com/indicators/japan_liquefied_natural_gas_import_price

[IsailedawayfromFR]

While I applaud the growth of natural gas production and export here, I continue to wonder whether instead of getting on the LNG bandwagon, it would be more favorable for Canada to use that gas from the Horn River and other prolific fields to burn to generate steam and unleash Athabasca.

A lot of western Canadian gas contains inerts which must be removed prior to sales.  This can get expensive, especially for liquefaction.

If one ships the raw gas to Athabasca, no inerts removal may be required at the burner tip, and the low-cost fuel can be used to generate enough steam to create the largest producing oil field ever seen in North America, perhaps the world.

Current production is 1.3 mmbpod but there is 1.7 trillion bbls in place there.

[thackney]

While I applaud the growth of natural gas production and export here, I continue to wonder whether instead of getting on the LNG bandwagon, it would be more favorable for Canada to use that gas from the Horn River and other prolific fields to burn to generate steam and unleash Athabasca.

A lot of western Canadian gas contains inerts which must be removed prior to sales.  This can get expensive, especially for liquefaction.

If one ships the raw gas to Athabasca, no inerts removal may be required at the burner tip, and the low-cost fuel can be used to generate enough steam to create the largest producing oil field ever seen in North America, perhaps the world.

Current production is 1.3 mmbpod but there is 1.7 trillion bbls in place there.

Any significant inerts will typically be removed closer to the field and not near the downstream user.  If there is significant contamination percentage, operators want that removed before most of the miles of transportation.  Otherwise you are burning up horsepower moving waste product raising the transportation costs.

[IsailedawayfromFR]

Any significant inerts will typically be removed closer to the field and not near the downstream user.  If there is significant contamination percentage, operators want that removed before most of the miles of transportation.  Otherwise you are burning up horsepower moving waste product raising the transportation costs.

10 to 12% CO2.

The resource of Horn River and 2 other BC plays may contain up to 2 quadrillion cf of gas.  That is not gas in place, but potentially recoverable.

Impressive.

When I researched unconventional plays years ago, I found Horn River as one of the best technically of all the plays.  Its downside is remoteness and seasonal (tundra) problems.

http://www.naturalgasintel.com/hornriverinfo

[Joe Wooten]

10 to 12% CO2.

The resource of Horn River and 2 other BC plays may contain up to 2 quadrillion cf of gas.  That is not gas in place, but potentially recoverable.

Impressive.

When I researched unconventional plays years ago, I found Horn River as one of the best technically of all the plays.  Its downside is remoteness and seasonal (tundra) problems.

http://www.naturalgasintel.com/hornriverinfo

You can use that CO2 for tertiary recovery projects.......

[IsailedawayfromFR]

You can use that CO2 for tertiary recovery projects.......

Yep, if the reservoirs are suitable for them. Need them deep enough for higher pressures and oils need to be right viscosity to achieve miscibility.

Unfortunately, those at Athabasca are generally not suitable, hence the need for steam, which are for shallow reservoirs having high viscosity.

[Joe Wooten]

Yep, if the reservoirs are suitable for them. Need them deep enough for higher pressures and oils need to be right viscosity to achieve miscibility.

Unfortunately, those at Athabasca are generally not suitable, hence the need for steam, which are for shallow reservoirs having high viscosity.

The oil fields around Mitchell, Nolan, Howard, and Scurry counties are amenable to CO2 injection. When I was a junior engineer at the Morgan Creek Power Plant near Colorado City in 1979-1981, a company approached us with a proposal to put CO2 scrubbers on the boilers on Units 5 and 6 and use the gas for injection in local tertiary recovery projects. Texas Electric readily agreed, as they would get paid for it, and an AE was hired to begin the design process. About 6 months later, a major deep gas strike was made up in the Texas/Oklahoma panhandles that had a LOT of CO2 in it that could be stripped out much cheaper than taking it out of the plant boiler exhaust stacks. I think there were two more power plants with other companies involved too. The project was cancelled about 2 months after that.

[Hoodat]

After 8+ years of delay in building pipelines from the Williston Basin to the US Gulf Coast, Canada has gone westward and will now be able to get a much better price for oil & gas than they were getting from the US.

Democrats once again screwing over America.

[thackney]

After 8+ years of delay in building pipelines from the Williston Basin to the US Gulf Coast, Canada has gone westward and will now be able to get a much better price for oil & gas than they were getting from the US.

Democrats once again screwing over America.

Canadian Oil Pain Grows as Crude Discount to WTI Hits $40
https://www.rigzone.com/news/wire/canadian_oil_pain_grows_as_crude_discount_to_wti_hits_40-03-oct-2018-157104-article/
October 03, 2018

Canadian heavy crude’s discount to West Texas Intermediate futures increased to the widest in almost five years, raising the specter of local oil producers curtailing operations.

Western Canadian Select’s discount for November fell 65 cents to $41.40 a barrel Wednesday, the biggest since November 2013, data compiled by Bloomberg show. The plunge came as new supply from Suncor Energy Inc.’s Fort Hills mine helps to fill pipelines to capacity.

“If you get this sustained wide differential, you are going to see these guys start to ramp down production,” Mike Walls, a Genscape Inc. analyst, said by phone.

When discounts widened to $30 a barrel early this year on the back of a pipeline outage, companies including Cenovus Energy Inc. and Canadian Natural Resources Ltd. said they were cutting some production or starting maintenance earlier than planned. Yet, with oil sands maintenance soon to wind down and further maintenance not planned until next spring, there is “no relief valve for the next two to four months,” according to Walls.

Other grades of Canadian crude are also suffering. Light synthetic crude, produced from bitumen processed in an oil sands upgrader, fell to a $19.75 a barrel discount to New York futures on Tuesday as Syncrude Canada Ltd. prepared its upgrader next month back to full production after a plant-wide shutdown in June. New pipeline projects, including the Trans Mountain expansion to the Vancouver area, have been stymied by court-imposed delays....

[IsailedawayfromFR]

The oil fields around Mitchell, Nolan, Howard, and Scurry counties are amenable to CO2 injection. When I was a junior engineer at the Morgan Creek Power Plant near Colorado City in 1979-1981, a company approached us with a proposal to put CO2 scrubbers on the boilers on Units 5 and 6 and use the gas for injection in local tertiary recovery projects. Texas Electric readily agreed, as they would get paid for it, and an AE was hired to begin the design process. About 6 months later, a major deep gas strike was made up in the Texas/Oklahoma panhandles that had a LOT of CO2 in it that could be stripped out much cheaper than taking it out of the plant boiler exhaust stacks. I think there were two more power plants with other companies involved too. The project was cancelled about 2 months after that.

Didn't mean to imply that there is no utility there for enhanced recovery via CO2.  In fact, there are recent projects brewing such as seen here.  Most CO2 is being sequestered for environmental reasons, not for EOR.

Canadian carbon capture and storage projects will soon sequester up to 6.4 million tonnes of CO2 per year


What I meant to say is that most of the oil in Western Canada remains in Athabasca which is not amenable to added recovery via CO2.

[Joe Wooten]

Didn't mean to imply that there is no utility there for enhanced recovery via CO2.  In fact, there are recent projects brewing such as seen here.  Most CO2 is being sequestered for environmental reasons, not for EOR.

Canadian carbon capture and storage projects will soon sequester up to 6.4 million tonnes of CO2 per year


What I meant to say is that most of the oil in Western Canada remains in Athabasca which is not amenable to added recovery via CO2.

They could build another pipeline and ship the gas to Texas for EOR......