Volume 4 – Natural Gas: Economics and Environment. A Handbook for Students

The first chapter (17) of Natural Gas: Economics and Environment focuses on calculating the economics of various economic models referring to the (1) E&P-model, (2) CCGT-model and (3) LNG Model. The aim was to calculate the gas price in MMBTU, which was required to enable a profitable gas field development, based on the assumptions of the E&P-model. This gas price can be used subsequently as an input value to determine the costs of the fuel gas either for the CGGT-model to produce electricity (sold in cents per kwh) or in the LNG-model to determine the costs of LNG, when re-gasified in the receiving terminal of the buyer. The following image shows a spider diagram referring to the sensitivity of a change of variables of the Base Case (reserves, price etc.) with respect to result figures in terms of NPV, net present values.

Economic performance – output, profit, growth – represents the backbone of a company when it comes to creating commercial values. During the last decades, an increasing number of market participants have developed the view that this was not entirely sufficient. According to their perspective, corporations should not just invest to add (1) economic value but (2) social and (3) environmental value as well. This idea is associated with what is called the Triple Bottom Line, TBL. Social and environmental values are going to be described in the following chapter (18) with reference to HSEQ (health, safety, environment, and quality control). The image below (Source: NASA) shows the ozone hole over the Antarctic caused – amongst others – by chlorofluorocarbons (CFCs) having ascended into the stratosphere.

The last chapter (19) of volume 4 deals with historic and more recent technical developments in the upstream oil & gas industry. The image below left shows Captain Drake’s first oil well drilled in 1859 in Titusville /Pennsylvania (Source: Drake Well Museum) and the Troll A drilling platform (Source: OD – NPD) being towed to its location in the Norwegian sector of the North Sea.

The following table of contents provides a more detailed overview of the topics addressed in Natural Gas: Economics and Environment. Please note that the numbering continues with the 17th chapter in continuation of the seven chapters presented in the 1st volume (Natural Gas: Exploration and Properties), chapter 8-12 of volume 2 (Natural Gas: Operations and Transport) as well as chapter 13-16 dealt with in volume 3 (Natural Gas: Costumers and Consuming Industries).

17. Natural Gas: Economics
17.1. E&P Model and Information
17.1.1. Method of Calculation and Sensitivity of Results
17.1.2. Economics and Accounting
17.1.3. Reservoir: Natural Gas Reserves and Production Natural Gas: Definition Reserves Production
17.1.4. Natural Gas Projects: Types of Contracts
17.1.5. Financial Engineering of E&P- and Natural Gas Projects Financing Alternatives Reserve-Based Loan Project Financing Project Economics and Financial Cover Ratios Project Risks and Risk Mitigation Instruments: Insurances, Guarantees, Others Project Risks: Oil and Gas Projects Insurance: Oil and Gas Projects Market and Political Risks: Oil and Gas Projects – Risk Mitigation Instruments
17.1.6. Natural Gas Project Costs: Specific Aspects Exploration and Appraisal Costs Drilling Costs Development Costs Production Costs Pipeline Construction Costs
17.1.7. E&P-Model: Upstream Exploration and Production Project Gas Production E&P-Project Costs: CAPEX and OPEX Cost Recovery Profit Sharing Cash Flow and Results Economies of Scale
17.1.8. Natural Gas E&P-Project: Industry Examples In Salah – Onshore – Algeria Malampaya – Offshore – Philippines Gas Field Development – Offshore – Lead-Time Yacheng Gas Field Lan Tay and Lan Do Gas Fields Wet- and Dry Gas – Cost Estimate
17.2. CCGT-Model
17.2.1. CCGT-Model: Gas-to-Electricity Project CCGT-Model: Introduction and Overview CCGT-Model: Economics Base Case CAPEX and OPEX-Maintenance Costs Availability OPEX – Natural Gas Load Total Costs Electricity Output and Revenues Economics: Results Sensitivities
17.3. LNG-Model: Liquefied Natural Gas Project
17.3.1. LNG Plant
17.3.2. LNG Carriers
17.3.3. LNG Receiving Terminal – Regasification
17.3.4. LNG Unit Costs and Prices
References (17)

18. Natural Gas: HSEQ and Sustainability
18.1. H – Health and S – Safety during Operations
18.1.1. Natural Gas: Safety Aspects
18.1.2. Specific Health and Safety Aspects Blow-out Hydrogen Sulfide – H2S Naturally Occurring Radioactive Materials – NORM Fracking Gas Leakage Petrochemicals Toxicity
18.1.3. Production and Processing: Hazards, Safety, Automation and Q- Quality Control
18.2. E – Environment
18.2.1. Natural Gas Combustion: Emissions Emission – Substances Oxycombustion
18.2.2. Greenhouse Gases, Global Warming and Anoxic Events
18.2.3. Acid Rain – SOx and NOx Sulfurous Oxides – SOx Nitric Oxides – NOx
18.2.4. Ozone – Ozone Hole and Smog Ozone Hole Ozone and Smog
18.2.5. Heavy Metals – Lead and Mercury
References (18)

19. Industry Environment: Historical Overview and Current Developments in the Upstream Oil & Gas Industry
19.1. Historical Overview: From the Beginnings to the Ocean Floor
19.1.1. Oil & Gas Industry Development: Onshore – Origins Onshore Drilling Seismic Well Stimulation: First Frack
19.1.2. Oil & Gas Industry Development: Offshore – Origins Offshore Drilling Offshore Pipeline Construction Offshore Platforms and Production Technology
19.2. More Recent Developments: Selected Topics – From the Ocean Floor to Down-hole
19.2.1. Subsea Template, Completion, Riser, Drilling and Intervention Subsea Completion Subsea Template Subsea Riser Riser and Riserless Drilling Subsea Well Intervention Subsea Well Intervention: Riser and Riserless Subsea Well Intervention: Lower Marine Riser Package
19.2.2. Subsea Separation and Processing Type 1 System – Multiphase Pumps Type 2, 3 and 4 Systems – Separation and Pressure Boosting Subsea Separation and Processing: Further Industry Examples
19.2.3. Drilling, Completion and Subsea Drilling Units – Additional Aspects
19.2.4. Downhole Production Technology
19.3. Future Exploration Frontiers
References (19)


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