Flared gas utilization strategy - opportunities for small-scale uses of gas (English)
The main objective of this study is to assess the technical feasibility, and economic viability of using flared gas in various applications ranging from rural electrification to commercial, and industrial usage. The following four options have been identified... See More +
The main objective of this study is to assess the technical feasibility, and economic viability of using flared gas in various applications ranging from rural electrification to commercial, and industrial usage. The following four options have been identified, and considered for using associated gas: 1) Power production at the oil field for transmission to existing power grid (medium-scale); 2) Power production at the oil field for electrification of non-electrified rural area (small-scale); 3) Supply of piped gas to larger consumers, such as heat and power plants, and industries (medium-scale); and, 4) Liquefied petroleum gas production (LPG), alone or in combination with other means of use (small-scale). The study has identified a number of realistic options for the small-scale use of flare gas, evaluated based on the case studies, and lessons learned. Economic and financial model analyses for initial screening purposes, appear to indicate that flaring reduction is a win-win option in many cases. Subsidies are in general not needed-companies, governments, consumers, and the environment all stand to gain. The exceptions are: a) Where markets are far away (for a medium-size oil field, it will be feasible to move the gas or power roughly 500 km in order to get to a market); b) Where gas deposits are small (model calculations indicate that gas utilization from oil fields with gas yields over 2,500-5,000 m3 per day can be viable); and, c) Where prices are distorted by domestic fuel subsidies. The analysis also indicates that there is little economic difference between (a) transporting gas in pipelines to an industrial gas customer, or an existing power plant, and, (b) power generation at the site, and then transmission of power, by way of power lines to the load center. Finally, the model suggests that LPG utilization becomes economically advantageous at LPG prices (world market) over US$300 per ton, provided that the raw flare gas yields over 15 percent LPG, or when the gas yield from the field is higher than 60,000 m3 per day. To counter constraints, it is recommended to: open opportunities for private entities to take part in the production, and distribution of gas and electricity; investigate the framework for LPG distribution as part of a decision to produce LPG; and, to focus (by Governments) on the availability of a wholesale-priced natural gas supply, on accessing gas transportation in major pipelines, at the same prices as large users, clearly regulated, and, on entrepreneurs' access to technology and expertise. Also recommended, is the availability of financing for new small-scale projects, including financing for investments in customer fuel conversion equipment, as well as tax, or other incentives to motivate small-scale customers to convert to gas.
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