World
Changing Trends in Gas World
Khondkar Abdus Saleque
Natural gas is the fuel of choice of the twenty-first century. It is cleaner and more environment-friendly than other traditional forms of fossil fuels oil and coal. Moreover, the days of cheap oil are gone. It is getting more and more difficult to find oil. The price is also sky rocketing. Coal is dirty and burning coal creates greater emissions of greenhouse gas causing serious environmental degradation.
Energy world is first turning towards natural gas. Countries, which earlier used to flare associated gas of oil have now started to recover it and utilize. In this changing world focus developed and developing nations alike making natural gas as an essential element of fuel basket. Bangladesh unlike many countries is distinctly lucky to have significant amount of natural gas. The gas industry is about 60 years old. But unfortunately id did not attain the required maturity. Among various reasons the lack of specific knowledge and absence of proper human resource development plan impeding Bangladesh to explore and exploit the natural gas reserve and resource properly.
This write up is not intended for the experts. It is for common people and young natural gas sector professionals of Bangladesh who like to learn. Bangladesh energy sector is predominantly gas depenpendent and will remain so for several more years. A basic understanding of natural gas value chain may be useful for most us when the nation appears to be confused on various contentious issues regarding proper exploration and exploitation of the God gifted natural resource. Many industrially developed countries like Japan and Korea do not have. We know that gas is a precious natural resource. We know that considering our requirement to fuel developing economy we have to make use of every drop of gas in the most economic way. We need to have proper vision to develop the resource with a well-conceived mission to achieve the mission.
But for lack of specific strategy to develop our competent human resource and lack of political commitment natural gas sector did not achieve the appropriate growth to match our growing demand. Our Urea fertilizer production is exclusively dependent on gas, power generation depends 90% on gas. It is our engine for growth. But if you look at Petrobangla or some of its companies wrong professionals having not even the basic concept of gas industry are spearheading. Serious crisis of honest, competent manpower has bogged down the development and operation activities. Different experts give four different views of gas reserve resource. People having very shallow knowledge pretend to be masters of the trade. At least a hundred of very competent and fair thinking professionals having years of exposure in various segment of gas chain have opted to try their luck abroad getting unfair treatment in Bangladesh. They in fact failed to survive in environment where corrupt, inefficient persons having political backing were favored. The serious brain drain has brought the gas sector to almost ruins.
The author knows about 100 very accomplished Bangladeshi gas sector professionals who have migrated to Countries like Canada, USA, Australia and various western European countries finding unfriendly working environment. Only few of them are doing line jobs. Most of them are wasting time and energy doing odd jobs for survival. On the other hand Bangladesh Gas sector is suffering from acute shortage of competent technical personnel. Petroleum and reservoir engineering is the most neglected area. Modern quality control and safety standards are not practiced in gas sector infrastructure development. Gas transmission and marketing also lacks efficiency and control.
The gas sector needs fresh blood. Whether it is upstream exploration & production, midstream transmission or downstream utilization sound professionals with vision and commitment needs to be infused. It is for these fresh professionals and general readers the following write up is targeted.
Natural gas chain
Natural gas industry is large, capital intensive and highly concentrated. Since natural gas exploration and production are closely linked to oil exploration and production, this particular upstream segment is dominated by oil majors. On the other hand midstream and downstream segments transmission and distribution of gas are more or less similar to electricity transmission and distribution.
Traditionally, in a highly regulated natural gas market, gas production companies explore, extract and produce gas and then sell to pipeline companies for transportation to local distribution companies' .The LDCs put the gas in the market for end users. The industry thus used to be vertically integrated and gas production, transportation and distribution services were provided as a bundle to end users. Natural gas industry used to be a natural monopoly, dominated by state-owned utilities. It remained like this for a while till market penetration of gas was very limited. But with surging oil price in international market and growing consciousness about greenhouse gas emission due to burning of coal gas became the fuel of choice. Gas market liberalization started in many countries leading to a process of unbundling supply from transportation of natural gas and expanding the choice of the consumers. Pipeline or transmission companies are increasingly independent from producers or distribution companies. Some transmission companies sometimes sell gas directly to large consumers.
The formation of Gas Transmission Company Ltd (GTCL) in Bangladesh followed the trend. We have several producers –state owned and IOCs on the upstream and four LDCs on the downstream. GTCL in the middle has the natural monopoly to evacuate gas from sales custody transfer point of all producers and transport to custody transfer points of all LDCs. The efficiency of gas business to a large extent depends on appropriate gas transportation infrastructure to efficiently evacuate and transport the gas to growth centres. Transmission companies operate large gas transmission pipeline utilizing state of the art technology. SCADA system operates on the basis of real time data. Large transmission system comprises of several thousand kilometers of gas transmission pipelines through rugged terrains having several remote controlled compressor stations, mixing stations. Transmission companies monitor load dispatch
and ensure security of supply in the gas grid.
The structure of the natural gas markets is experiencing challenging mutations in the age of liberalization. The natural gas sector is undergoing fundamental restructuring, which is linked to the opening up of world gas markets to giant multi-energy companies, for whom natural gas will play key role. The industry is witnessing mergers and acquisitions, restructuring and regrouping, with the creation of multi- utilities and services businesses as well as re-focused gas enterprises with international extension of gas companies participations and activities and arrival of newcomers across borders and across sectors. Vertical integration has therefore been reduced and there has been increasing horizontal integration in the energy sector.
Delivery of natural gas to end-users is normally done by local distribution companies (LDCs). This may be state owned, owned by investors or by municipalities for several years they have had exclusive control on gas marketing in specific areas. Reforms in natural gas market is now exposing them to competition. End users are now given choice to buy gas directly from producers, transporters, marketers or other LDCs. They can also have different type of contracts for storage and other services as well as get discounts if they gather with others. Most large natural gas users tend to buy gas directly from producers or marketers, while residential, commercial and industrial customers continue with LDCs.
Gas industry has become very dynamic. Evolution of technology in gas industry is making gas industry more and more efficient every passing day. Innovations also save energy, help to reduce costs and environmental impacts of energy and allow gas more closer to end-users at affordable cost. Development in natural gas technology has played a leading role in improving the outlook for natural gas all over the world. Innovations in the natural gas industry occur constantly at any point in the natural gas supply chain as well as in the different natural gas applications.
The main technological advancement in natural gas prospecting is seismology, which is the study of sound or seismic wave movements. It allows studying the lower layers of earth crust without drilling into them. By analyzing the effects of vibrations in the crust, geologists can assess the kind of rock that is present in a certain layer and how deep it can be found. With recent computing technology, the value of seismic data has increased and geologists can create three –dimensional maps of the rock layers beneath the earth surface. With this 3-D Seismic technology, a computer can analyze the data obtained from thousands of seismic measurements and develops a 3-D model. Geologists can also measure magnetic characteristics of rocks with magnetometers, which are devices the technology of which has evolved considerably in order to place them properly in helicopters, airplanes and later in satellites.
Natural gas is captured by drilling hole into the reservoir rock. Drilling can be onshore or offshore. Equipment used for drilling depends on the location of the natural gas trap and the nature of the rock. If it is a shallow formation a cable drilling can be used. It raises and drops repeatedly a heavy metal bit into the earth/s surface. In deeper formations rotary drilling rigs are used. Drilling rigs are used in most of the wells now. This method consists of a sharp bit to drill through earth and rock layers. Innovations in drilling techniques allow gathering more information about wells, drilling deeper and reduce costs. These also allow access to natural gas reserves, which could not be accessed earlier. Modern technology allows measurement while drilling, automation of drilling rigs and horizontal drilling.
Once natural gas has been found it has to be recovered efficiently .The most efficient recovery is characterized by the maximum recovery during a period of time without damaging the formation. Several tests are carried out at this stage. Most often, the natural gas is under pressure and will come out of the hole on its own. In some cases, pumps and other more complicated procedures are required to remove the natural gas from the ground. The most common lifting method is rod pumping.
Natural gas processing implies, the gathering, conditioning and refining of raw natural gas in order to convert it in useful energy for its different applications. This processing involves first the extraction of the natural gas liquids from the natural gas stream and then fractioning of natural gas liquids into separate components. Innovations in gas processing technology allow separation of most of the associated elements other than methane from natural gas. Absorption and the cryogenic expansion process are sophisticated and ensues dropping out majority of natural gas liquid to get pure and dry natural gas for transportation.
Processed pipeline quality gas goes into transmission system from source to growth centers. It can be transported from onshore and offshore source through pipelines usually made of mild steel piping of sizes usually ranging from 20” – 42 “ of diameter. Since gas is moved at high pressures, there are compressor stations along the pipeline in order to maintain the level of pressure needed. Computer based pipeline simulation programmes are applied to identify capacity control and determining the requirement of future addition of additional pipeline and compression of integrated gas grid. Satellite or microwave based Supervisory Control and Data Acquisition System (SCADA) is used in modern gas grid operation for instant monitoring and control of gas grid. SCADA can remotely operate pipeline stations and line valves. Regular pigging of in service pipelines and monitoring of Cathodic Protection are the usual part of system operation. Intelligent pigging technology is very useful tool for metal loss survey of in-service pipelines. In about sixty years of gas industry Bangladesh only could conduct the intelligent pigging once for 14” OD Titas Gas transmission pipeline. Another attempt to conduct this in Ashuganj –Bakhrabad loop line failed at the early stage.
Regular inspection of special points likes waterway crossings, highway and rail track crossings valve stations are essential to retain efficiency and avoid encroachment of transmission system. Large transmission system has significant line pack- the inventory of gas in the system. Effective utilization of line pack is also an essential way of peak shaving. Apart from line pack, compressors and LNG storage are also used for peak shaving. Regular patrolling of transmission system occasionally in the air but more frequently on land is essential activity. Every gas utilizing country has specific gas safety rules. But in many developing countries the transmission system is not properly inspected once in operation. Bangladesh gas sector in recent times observed some failures of high-pressure gas pipelines under rivers.
However, in general compared to other energy sources, natural gas transportation is very efficient because the portion of energy lost from origin to destination is low. Buried pipelines are the safest means of transporation if planned, constructed and managed properly. Natural gas can also be transported by sea. In that case it is transported into liquefied natural gas (LNG). The liquefaction process removes oxygen, carbon dioxide, sulphur compounds and water. A full LNG chain consists of a liquefaction plant, low temperature and pressurized transport ships and regasification terminal. In many gas utilizing countries natural gas is also stored in underground salt cavern or above ground LNG storage allowing gas industry to meet seasonal demand fluctuations. These are usually close to demand centers. The LDCs can rely on stored gas in peak demand periods and service their customers continuously and on time. They also sell gas in spot market during off peak periods.
Distribution and sales are terminal activities. Gas distribution and marketing are often bundled. The distribution network can be palled and developed utilizing various computer aided design tools. In a particular city prior to contracting distribution network proper prevailing and projected gas load survey must be conducted. Based on survey data computer program can produce proper network system. These days for medium and low-pressure system LDPE (Low Density Polyethylene) and MDPE (Medium Density Polyethylene) pipes are used in many countries in addition to traditional MS pipes. LDCs receive metered gas at designated Custody Transfer Points from Transmission Company. Gas in transmission system is not odorized. But distribution system apart from regulating and metering LDCs also odorize the gas usually with Tetra Hydro Thiophene (THT). Distribution companies can have SCADA and telemetry to monitor and control the system.
These days meters having scanning system and accuracy in the range of +- 0.5 % ensure that every drop of gas is accounted for. Distribution network is usually in relatively congested city areas. So regular maintenance of CP in case of MS network is essential. Regular leakage survey may also be done to avoid gas accidents. People should be made ware that Natural gas can form explosive mixture if mixed with certain proportion of air. Explosive mixture can cause serious damage. Every small consumer must be made aware of the danger associated with gas use. Urea fertilizer and other petrochemicals like methanol, ethanol etc use NG as feed stock. Other major use is for generating electricity. These days Combined Cycle Power plants use NG very efficiently and economically.
Bangladesh gas sector now requires change of mindset. It is sad that in several years we failed to develop proper work ethics and culture in the industry. Gas sector failed to retain competent professionals. Non-professionals and people having very poor academic records and track record are now in key positions. Gas infrastructures constructed with borrowed money are not maintained properly. There are no technical audit, very little accountability. Wonder why fresh line professionals are not recruited regularly and given proper incentives and training to retain them. However, for the benefit of young gas professionals of Bangladesh the next write up will address the natural gas market liberalization.