Published December 2009
Methane hydrates are solid crystalline lattices of ice that encapsulate molecules of natural gas. Enormous volumes of methane hydrates have been discovered in several regions of the world. For hydrates to form and maintain stable molecular structures, the constituents (water and natural gas) can only exist within a limited temperature/pressure environment. There is enough natural gas in known methane hydrate formations to meet the world's demand for natural gas for many decades. The problem is developing a cost competitive while safe and environmentally friendly process for capturing the natural gas within hydrates.
Several conceptual processes have been developed and patented by energy companies, and are being tested, for natural gas recovery from methane hydrates. These include the depressurization method, thermal recovery method, chemical injection method, and displacement recovery method.
SRIC has prepared a capital cost and production cost estimate for producing natural gas from methane hydrates using the depressurization method at a production capacity of 19.25 billion scf/year (53 MM-scf/d). Depending on design basis assumptions related to hydrate formation characteristics, depth, reservoir size, and economic assumptions involving project ROI, we believe that natural gas can be produced at well head costs (including ROI) of 4.50—10 $US/k-scf. These costs are in the range of commercial prices for natural gas at distribution hubs, but are well above commercially viable (as of 2009) well head prices.
Improvements in the specific technologies identified, and possible combinations of the technologies when applied to a specific hydrate formation, have the potential to substantially reduce overall production cost.