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Solution To Wasted Gas:Solution To Wasted Gas:Flaring And Associated Flaring And Associated Gas In NigeriaGas In Nigeria

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Gas Solution for the Niger Delta• Associated/Flaring gas issues in Nigeria• Market background & alternatives• Internergie Solution• Technical and commercial factors

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Associated/Flaring gas Issues in Nigeria

• Gas flares has been burning in Nigeria since the 1960's• The flames are visible from space and are brighter than the lights of Lagos,

Nigeria's largest city• Years of flaring has reduced life expectancy in the region to only 43 years

old• Region has highest infant mortality rate, 12% of newborns fail to see out

their first year• Flaring was made illegal in 1984, but has since continued due to little or no

viable solutions.• Recent claims in flare reductions has been due to militant problems, which

caused drawback on production• Flaring costs Nigeria $1.46 billion annually in lost revenue according to

NOAA

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Associated Gas is a Global Problem

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Re-injected14 TCF

Flared6 TCF

Asia

North America

Africa

Middle East

Central & S America

Europe

Russia

= 27% of annual US gasconsumption !

~4 TCFNot used to enhance

oil recovery

> 10 TCF (= 4.6 mmboe per day)

Source: International Energy Annual 2005 World Bank GGFR 2006,2007“Innovation, Dedication, Service”

TCF – Trillion cubic feet

250 km

Satellite image of gas flaring in Nigeria

Distressed Gas–An Increasing E&P Challenge

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Environmental Issues

New fields not allowed to flare

Existing fields risk shut-in or financial penalties

Gas Re-injectionHigh cost – wells in deepwater can cost $200 to $250 million

Gas breakthrough risks, limits production, threat to reserves

Wasted Hydrocarbon ‘Asset’

Gas un-bookable as “reserves”

Governments concerned by national resource issues

Gas Infrastructure Issues

High cost of pipelines in remote or deepwater areas

Multi-party, complex infrastructure projects take time

“Innovation, Dedication, Service”

Current Offshore Gas Management Problems

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• Employ gas as FPSO fuel source

• Pipe gas to onshore infrastructure

• Re-inject gas into reservoir

• Flare gas

“Innovation, Dedication, Service”

Emerging Gas Utilization Options

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• CNG – High infrastructure cost– Economics favourable at 200+ MMscfd– Concepts being developed– Economics dependent on distance to shore

• FLNG– High infrastructure cost

– Economics favourable at 400+ MMscfd

– Project studies underway

• Gas to Wire– High cost for deep water and remote fields

– Needs local market for power

– Economics dependent on distance to shore

“Innovation, Dedication, Service”

INTENERGIE SOLUTION

- Plant replaces gas re-injection wells• Savings in excess of $250 million to $1 billion.• Company realizes immediate revenue from previously re-injected or flared gas transformed to higher grade crude.• Plant mounted on FSPO already attached to field.• Greater revenue from Higher grade crude than LNG gas sales, with much less costs.• Plant can be placed on skid mounts and used onshore.

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Integrate the plant with the production facilityConvert the associated gas into syncrude

Co-mingle and transport with the natural crude

Intenergie Solution at 2-50 MMscfd

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Workable Solution – Technical Factors

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• Safety– No oxygen supply required– Offshore certification

• Operability & Reliability– No catalyst handling on facility– Exchangeable 25 tonne reactor modules– Handles high CO2 gas– Handles variable gas composition & flow-rate

• Seaworthiness– Low liquid inventory– Low C.O.G.– Motion insensitivity

• Scalability– Accommodates production decline over field life

“Innovation, Dedication, Service”

Commercial Factors—Field Development

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TimeAvoid multi-party gas infrastructure negotiations

Overcome flaring restrictionsAcceleration….

CapexSavings in gas re-injection wells & equipment

Savings in gas pipeline infrastructureOffset by….

RevenueAdditional syncrude revenue

No additional storage / transport / market costsIncreased….

Reserves Distressed gas now bookable as reservesIncreased….

Project Enabler

Enhanced Oilfield NPV

“Innovation, Dedication, Service”

SUMMARY• True ‘standalone’ solution• Strong economics where gas infrastructure or

re-injection are avoided• Key engineering aspects identified & addressed

by pre-FEED studies• Technology verified by major independent

groups• Operability & complete process verified by

current operating pilot plants.• Manufacturing route & partners established

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Visit Us at www.intenergie.com