Whither Arctic oil and gas?
Most of the current Arctic exploration focuses on oil, but efforts are building to tap substantial stranded gas reserves
The Arctic is one of the last frontiers for oil and gas exploration. Technology, impatient governments and the global need for more energy have placed urgency on unlocking the region’s massive resources. Leta Smith of IHS Inc. takes a look over the Arctic Circle at a blizzard of E&P activity.
Twenty-five percent of the world’s undeveloped gas probably lies above the Arctic Circle. Whereas slightly more than one-third of the 150 trillion cubic feet (Tcf) of discovered non-associated gas remains undeveloped, this is changing in three key regions: the Mackenzie Delta, the North Slope of Alaska and the Barents Sea. The Alaska state government recently approved TransCanada Pipelines Limited’s bid for the construction of a gas pipeline to transport North Slope gas to the south. And the Mackenzie Gas Project plans to connect gas discoveries in the Mackenzie Delta with southern markets via a 1,220-kilometre pipeline. Although still in the planning stages, this project passed a substantial milestone in 2007 when its partners signed a comprehensive socio-economic agreement with the Northwest Territories government.
Gas production in Western Canada has been flat for the past eight years, while in the United States it has been bouncing along a plateau. The U.S. Energy Information Administration (EIA) forecasts U.S. gas consumption to increase approximately 9 billion cubic feet per day (Bcf/d). If both the Mackenzie Pipeline and the Alaska pipeline are built by then, they will help offset, but not completely meet, the increased North American gas demand by adding an estimated 4.9 Bcf/d.
Norway and Russia are also gearing up to tap Arctic gas resources, but in the form of LNG rather than pipelines. In 2007, StatoilHydro’s Snohvit discovery (Figure 1) in the Barents Sea was brought onstream, feeding gas to a liquefaction plant onshore at the world’s northernmost LNG plant. Further development on two additional fields, Askeladd and Albatross, will continue at least through 2018.
In addition to being the first offshore development in the Barents Sea, Snohvit is significant for its liquefaction processes specifically designed for Arctic conditions. Moreover, the development has other eye-catching technical features, being connected to shore by a subsea tie-back and setting a record in terms of distance for piping multi-phase fluid streams.
Entries