DNV GL: Operators could benefit from capturing flare gas

140 billion cubic meters of natural gas produced together with oil is wastefully burned or “flared” at thousands of oil fields around the world, DNV GL says.

The company, citing World Bank data, claims that this is the equivalent to the combined gas consumption of Central and South America in 2013. Now new DNV GL research shows alternatives to flaring and their economic viability.

Based on real locations and field conditions, both on- and offshore, DNV GL’s methodology uses gas flowrate and distance to market to select the most appropriate technical solutions on a case-by-case basis.

According to DNV GL, the methodology could present new revenue opportunities, particularly for smaller-scale operators, while helping them to reduce emissions and stay ahead of regulatory requirements.

DNV GL says that its methodology is informed by detailed case studies in four countries: Russia, USA, Algeria and Vietnam. Each geographical setting provides different technical, regulatory and economic challenges.

Martin Layfield, global segment leader of the Gas Value Chain with DNV GL, said: “It’s a significant challenge to turn waste from flaring and venting into a profitable economic product with sound environmental benefits, however our research shows that there are economically viable solutions that can assist in carbon abatement and develop flare gas for societal use.

 

“…without a global cost penalty for emitted carbon, there are few business incentives to capture the flared gas. “

 

“Existing solutions are mature for large-scale applications, but most flaring is very small-scale. We need innovation in applying associated gas to energy intensive processes, such as air separation and water desalination. Though some solutions might be immature for near-term implementation, current applications such as micro LNG, compressed natural gas, natural gas hydrates (NGHs) and conversion methods can deliver significant benefits, and are proving to do so in some cases in certain markets like North America,” he continued.

Flaring of gas contributes to climate change and releases toxic components that can harm the health and the well-being of local communities. It also wastes a valuable energy resource that could be used to advance the sustainable development of producing countries. Most flaring occurs at either ageing and/or remote installations.

However,  DNV GL says, without a global cost penalty for emitted carbon, there are few business incentives to capture the flared gas. Financial barriers can significantly impede the efforts to reduce emissions and this is particularly true for countries with developing economies. Access to funding to develop projects and the implementation of technologies is a factor and it is hoped that the work conducted by DNV GL can help to demonstrate the economic scenarios which can instill confidence in the industry to achieve more, the company says.

 

“…the objective is to support the industry in raising the standards of safer, smarter and greener performance.”

Similarly, DNV GL continues, regulatory drivers are limited in many geographies. However, the World Bank initiative to end routine gas flaring at oil production sites by 2030 is helping to drive industry momentum, with endorsement by ten countries, ten oil companies and seven development institutions.

“This research helps identify new value chains and revenue streams that can help meet the industry’s demand for sustainable, cost-effective and reliable alternatives to gas flaring. The objective is to support the industry in raising the standards of safer, smarter and greener performance. This will reduce CO2 emissions and local pollution and ultimately improve the quality of life in local communities around oil and gas extraction,” said Elisabeth Tørstad, CEO of DNV GL – Oil & Gas.

“At DNV GL we are committed to contributing to the sustainable development of the industries we engage in. We believe technology to be a key enabler and invest 5% of our annual revenue in R&D,” she said.

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