Comparative Analysis of Utilization options for Stranded Natural Gas in Nigeria

Abstract

The petroleum industry is continually seeking ways to utilise stranded natural gas
emanating from the flare stack in oil processing facilities. The very common practice has
been to reinject stranded and marginal gas for enhanced recovery purposes.
Notwithstanding, there has been a growing concern as to how these stranded gasses can be
brought to the market for direct use by end users. However, this study aims at reviewing
available natural gas utilizations for stranded natural gas exploitation. In addition, this
study focuses on performing economic evaluation of four major gas utilization options: gasto-
liquid (GTL), compressed natural gas (CNG), natural gas hydrate (NGH) and liquefied
natural gas (LNG). Economic indicators such as internal rate of return (IRR), net present
value (NPV) and Payout time (POT). Nonetheless, the analysis revealed that CNG yielded
the highest productivity index of 3.01. This value was seconded by NGH with a productivity
index of 1.33. Also, IRR results showed that GTL and LNG are nearly mutually exclusive
projects since they have approximately same IRR of about 20%. Sensitivity analysis
performed on these gas utilization options, showed that NGH is a great utilization for
medium and small gas supply chains. Meanwhile, CNG is best for very large stranded
natural gas exploitations. More so, either LNG or GTL can be used for large stranded
natural gas exploitations. Nevertheless, GTL will be more economically viable considering
the number of cuts that can be obtained from it (diesel, methane gas, ethane, DPK and even
PMS through catalytic cracking procedures).