North American Natural Gas

Project #1, Pete - 4200

Ali Alsaffar, Jeremy Meyers, Sabrina Forbis

Introduction
North American Natural Gas

Annual production
Annual consumption
Reserves
Exports
Price
Gas pipeline systems and transportation
Developing projects and technology
Other points of interest

North American Annual Production

2010 N. America Estimates
28 Tcf (BP statistical review)
U.S. 21.5 Tcf (Vast majority).
o 76% of N. American production
o Recent increase due to
development of Marcellus,
Haynesville, etc.

3% increase in natural gas North American Natural Gas

Production right around 810 Bcm
~ 28 Tcf
production from 2000
2010
Technology advances, shale
gas discoveries.

Figure taken from BP Energy Outlook

Presentation, 2011

US remains worlds largest producer, despite weak North American gas prices,
while Canadian production saw worlds largest decline.

North American Projected

Production
Total N. American
production expected to
reach ~31.5 Tcf by 2025
(Energy Information Administration, 2002)

U.S. production expected to

be ~ 25 Tcf
Still around 77% of N.
American Production
Production projected growth
rate greater than that of
consumption (30% compared to
16%)

EIA Predicted that

over 23 yr. period,
N. American
production would
rise by ~13%

North America Natural Gas

consumption
Current consumption

Natural gas consumption is projected

to increase by 0.9 % per year from
28.8 Tcf in 2008 to 37.1 Tcf in 2035.

By the end of June 2011 the

consumption of natural gas
in the U.S. was 1.63 Tcf.

reference case number IEO2011

2006

2007

2008

2009

2010

Change
2010
over
2009

2.72
Tcf

2.86
Tcf

2.89
Tcf

2.85
Tcf

2.98
Tcf

4.7 %

2010
total
percent
age

26.9 %

North American Reserves

(Tcf)

Proved Reserves
Bermuda
Canada

0
57.3

Greenland 0
Mexico

Resources
Traditional 1739
Coalbed methane
Total

158

2170

13

United States

238

Total North America

Shale Gas Potential Resoures

6630

308.3

North American Current Exports

Majority of natural gas exportation

Japan (LNG from U.S. Japan decreased by 33%)

Canada
United States
Mexico

2011 OECD current estimate - 2.9 Tcf of natural

gas
U.S. 2 Tcf
Canada 0.5 Tcf
U.S. supply
= U.S. export
to Canada
Mexico supply
= less U.S. exports to Mexico

North American Projected Exports

Net exports to U.S. from
Canada expected to fall from
3.3 Tcf in 2007 - 2.2 Tcf in
2020
Due to decreasing gas production

From 20052030, LNG trade set

to grow 2X that of gas
production
Figure taken from EIA.gov, energy
forecasts

1.5 Tcf less gas will be exported in 2030

than in 2005.

US., Chile, Mexico small

difference in future exports of
natural gas expected.
Unless LNG market takes off

North America Natural Gas

prices
The natural gas price is set by market force
Commodity bought and sold by market players
Based on supply and demand

Year

2006

2007

2008

2009

2010

U.S.

$6.8
/Mscf
$5.9
/Mscf

$6.9
/Mscf
$6.2
/Mscf

$8.9
/Mscf
$8.0
/Mscf

$3.9
/Mscf
$3.4
/Mscf

$4.4
/Mscf
$3.8
/Mscf

Canada

Change
2010
over
2009
12.8 %
10.5 %

Pipeline Systems
US Natural Gas Pipeline
Network

210 NG Pipeline systems

Consist of interstate and
intrastate systems
305,000 miles of transmission
pipeline
1,400 compressor stations
More than 11,000 delivery points
24 Hubs
400 underground storage facilities
8 NG import facilities

Typical Pipeline Diameters

Interstate transmission = 16 48
Gathering and distribution systems = 6 16
Can be as narrow as

Pipeline SystemsContinued
A distribution system, such as a local utility, connects to
the interstate pipeline at a "city gate."
This facility reduces the pressure of the natural gas from
up to 1,500 psi down to a rate more appropriate to
consumer usage (as low as 3 psi).
Local utility adds mercaptan to the otherwise odorless gas
in concentrations no greater than 8 ppm per cubic foot

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Well
Processing Plant
Distribution Main
Compressor
Station
Storage Tank
Utility
Transmission
pipes
Service line
Gas meter
Appliance

North
American
Pipeline

+ Fully integrated natural gas transportation and distribution network

+ Only one significant new supply source left unconnected Arctic
gas.
+ If Alaska or the Northwest Territories is ever to be connected, it will
require enormous capital expenditures (Mackenzie over $15 billion
and Alaska over $40 billion) within one of the most stringent

TransCana
da
Pipelines
Approximately 42,500 miles

Moves 15 Bcf per day

connects virtually every major natural gas supply basin and
market
Provides 20% of Natural gas consumed in North America

Mackenzie Valley Pipeline

Proposed project to transport natural gas from the Beaufort Sea to

Northwest Territories
758 miles long and with an estimated cost of $16.2 Billion
Expected to move 652 Bcf / year

Alternative Transportation
Alternative to pipeline
transport:
Liquefied natural gas
(LNG)
Excellent for long
distance transport
Transport gas as liquid
fuel by way of:
o Barges
o Trucks
o Tankers

Three processes:
Transport
o Feedstock

Pre-Treatment
o Compression,
filtering, liquids
removal, purification

Liquefaction
o Intense cooling,
volume reduction

= High density gas, enabling storage, long

term use.

Natural Gas Developing projects and

technology
Innovative, new technologies have led to increased production
and profitability

1. Advances in the Exploration and Production sector.

3-D and 4-D Seismic Imagining.

. Vibrational technique has reduced the reliance on explosion methods and
reduced the impact on the environment.
. Has reduced the number of dry wells and drilling costs

CO2-sand Fracturing
. Injecting a mixture of proppant and carbon dioxide to fracture formation
. Used to help to increase the flow rate of natural gas from underground
formations

Slimhole drilling
. Drilling a smaller hole through which natural gas is recovered
. Can improve the efficiency and economy of drilling operation.

Hydraulic Fracturing
. A mix of water and sand injected into the rock at a very high pressure to free
natural gas trapped in tight formations

Natural Gas Developing projects and

Continued
technology
2. Liquefied natural gas (LNG).
Cooling the natural gas to approx. -260 F condenses the
gas into liquid form.
It is very practical in transportation of natural gas.

3. Natural Gas Fuel Cell.

The latest technology
in the industry of
natural gas.
Fuel cell that is
powered by natural
gas provides clean,
efficient electric
power
R&D for this
technology is still
ongoing.

Natural Gas Fuel Cell

Other Points of Interest

98% - U.S. natural gas consumed being
produced in North America.
22% - Percentage of natural gas in U.S. energy
consumption

Projections report that:

By 2035, >35% domestic gas consumption from Shale gas
By 2020, 65% U.S. gas production from unconventional plays.

Future of natural gas dependent on fracking, directional drilling,

and technology advances
In 10 years, 80% of well completions will utilizing hydraulic fracturing .

Closing Remarks
Natural gas promises much benefit

Decreasing reliance on foreign imports

Increasing domestic jobs and economic gain
Cleanest burning fossil fuel
Plentiful source of energy to help fuel our
future

References

http://
www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publicat
ions/statistical_energy_review_2011/STAGING/local_assets/pdf/statistical_review_of_
world_energy_full_report_2011.pdf
http://www.ecolo.org/documents/documents_in_english/nat_gas-infos-EIA-IOE.pdf
http://www.eia.gov/neic/speeches/newell_12162010.pdf
http://www.eia.gov/forecasts/ieo/pdf/0484%282011%29.pdf
http://
www.eia.gov/pub/oil_gas/natural_gas/feature_articles/2010/ngyir2009/ngyir2009.htm
l#imports
http://www.exxonmobil.com/corporate/files/news_pub_eo_2010.pdf
http://www.gas-plants.com/lng-plant.html
http://www.iea.org/stats/surveys/natgas.pdf
http://www.nrcan.gc.ca/eneene/sources/natnat/revrev-2020-eng.php
http://205.254.135.24/oil_gas/natural_gas/data_publications/eia914/eia914.html
http://www.bp.com/subsection.do?categoryId=9037150&contentId=7068622
http://www.naturalgas.org/environment/technology.asp