Monte Carlo Valuation of natural gas investments

This paper deals with the valuation of energy assets related to natural gas. In particular, we evaluate a baseload Natural Gas Combined Cycle (NGCC) power plant and an ancillary instalation, namely a Liquefied Natural Gas (LNG) facility, in a realistic setting; specifically, these investments enjoy a long useful life but require some non-negligible time to build. Then we focus on the valuation of several investment options again in a realistic setting. These include the option to invest in the power plant when there is uncertainty concerning the initial outlay, or the option's time to maturity, or the cost of CO2 emission permits, or when there is a chance to double the plant size in the future. Our model comprises three sources of risk. We consider uncertain gas prices with regard to both the current level and the long-run equilibrium level; the current electricity price is also uncertain. They all are assumed to show mean reversion. The two-factor model for natural gas price is calibrated using data from NYMEX NG futures contracts. Also, we calibrate the one-factor model for electricity price using data from the Spanish wholesale electricity market, respectively. Then we use the estimated parameter values alongside actual physical parameters from a case study to value natural gas plants. Finally, the calibrated parameters are also used in a Monte Carlo simulation framework to evaluate several American-type options to invest in these energy assets. We accomplish this by following the least squares MC approach.

Simulation of Natural Gas Production in Hydrate Reservoirs

This paper simulates a one-dimensional physical model of natural gas production from hydrate dissociation in a reservoir by depressurization. According to the principles of solid hydrate decomposition in stratum and flow of natural gas in porous medium, the pressure governing equations for both gas zone and hydrate zone are set up based on the physical production model. Using the approximation reported by N. N. Verigin et al. (1980), the nonlinear governing equations are simplified and the self-similar solutions are obtained. Through calculation, for different reservoir parameters, the distribution characters of pressure are analyzed. The decline trend of natural gas production rate with time is also studied. The simulation results show that production of natural gas from a hydrate reservoir is very sensitive to several reservoir parameters, such as wellbore pressure and stratum porosity and permeability.

Effects of natural gas pipeline condensate and crude oil spills, and comments on remediation, with emphasis on south Louisiana salt marshes: a review

This report reviews some of the natural ecological processes at work within a salt marsh as they relate to a spill of natural gas condensate - a mixture of aliphatic hydrocarbons, n-hexane, benzene, toluene, and xylene. It also reviews the environmental impacts of some of the components of natural gas condensate as well as related compounds (crude oil, higher molecular weight hydrocarbons, polycyclic aromatic hydrocarons - PAHs, linear alkyl-benzenes - LABs, etc.) on salt marsh ecosystems in southern Louisiana and elsewhere in the world. The behavior and persistence of these compounds once they have entered the environment is also considered.

Effect of microwave on formation/decomposition of natural gas hydrate

Natural gas hydrate (NGH) reservoirs have been considered as a substantial future clean energy resource and how to recover gas from these reservoirs feasibly and economically is very important. Microwave heating will be taken as a promising method for gas production from gas hydrates for its advantages of fast heat transfer and flexible application. In this work, we investigate the formation/decomposition behavior of natural gas hydrate with different power of microwave (2450MHZ), preliminarily analyze the impact of microwave on phase equilibrium of gas hydrate,and make calculation based on van der Waals-Platteeuw model. It is found that microwave of a certain amount of power can reduce the induction time and sub-cooling degree of NGH formation, e.g., 20W microwave power can lead to a decrease of about 3A degrees C in sub-cooling degree and the shortening of induction time from 4.5 hours to 1.3 hours. Microwave can make rapid NGH decomposition, and water from NGH decomposition accelerates the decomposition of NGH with the decomposition of NGH. Under the same pressure, microwave can increase NGH phase equilibrium temperature. Different dielectric properties of each composition of NGH may cause a distinct difference in temperature in the process of NGH decomposition. Therefore, NGH decomposition by microwave can be affected by many factors.

Empirical analysis and improved modelling of natural gas demand in Ireland

Countries across the world are being challenged to decarbonise their energy systems in response to diminishing fossil fuel reserves, rising GHG emissions and the dangerous threat of climate change. There has been a renewed interest in energy efficiency, renewable energy and low carbon energy as policy‐makers seek to identify and put in place the most robust sustainable energy system that can address this challenge. This thesis seeks to improve the evidence base underpinning energy policy decisions in Ireland with a particular focus on natural gas, which in 2011 grew to have a 30% share of Ireland’s TPER. Natural gas is used in all sectors of the Irish economy and is seen by many as a transition fuel to a low-carbon energy system; it is also a uniquely excellent source of data for many aspects of energy consumption. A detailed decomposition analysis of natural gas consumption in the residential sector quantifies many of the structural drives of change, with activity (R2 = 0.97) and intensity (R2 = 0.69) being the best explainers of changing gas demand. The 2002 residential building regulations are subject to an ex-post evaluation, which using empirical data finds a 44 ±9.5% shortfall in expected energy savings as well as a 13±1.6% level of non-compliance. A detailed energy demand model of the entire Irish energy system is presented together with scenario analysis of a large number of energy efficiency policies, which show an aggregate reduction in TFC of 8.9% compared to a reference scenario. The role for natural gas as a transition fuel over a long time horizon (2005-2050) is analysed using an energy systems model and a decomposition analysis, which shows the contribution of fuel switching to natural gas to be worth 12 percentage points of an overall 80% reduction in CO2 emissions. Finally, an analysis of the potential for CCS in Ireland finds gas CCS to be more robust than coal CCS for changes in fuel prices, capital costs and emissions reduction and the cost optimal location for a gas CCS plant in Ireland is found to be in Cork with sequestration in the depleted gas field of Kinsale.

Treatment of natural gas streams with ionic liquids

Being of high relevance for many technological applications, the solubility of sour gases in solvents of low volatility is still poorly described and understood. Aiming at purifying natural gas streams, the present work contributes for a more detailed knowledge and better understanding of the solubility of sour gases in these fluids, in particularly on ionic liquids. A new apparatus, developed and validated specially for phase equilibria studies of this type of systems, allowed the study of the solvent basicity, molecular weight and polarity influence on the absorption of carbon dioxide and methane. The non ideality of carbon dioxide solutions in ionic liquids and other low volatile solvents, with which carbon dioxide is known to form electron donor-acceptor complexes, is discussed, allowing the development of a correlation able to describe the carbon dioxide solubility in low volatile solvents. Furthermore, the non ideality of solutions of light compounds, such as SO2, NH3 and H2S, in ionic liquids is also investigated and shown to present negative deviations to the ideality in the liquid phase, that can be predicted by the Flory-Huggins model. For last, the effect of the ionic liquid polarity, described through the Kamlet-Taft parameters, on the CO2/CH4 and H2S/CH4 selectivities is also evaluated and shown to stand as a viable tool for the selection of ionic liquids with enhanced selectivities.

The political economy of natural gas in Trinidad and Tobago

Includes bibliography

Volume of natural gas within gas-hydrate and free-gas occurrences in ODP Leg 164 sites

Leg 164 of the Ocean Drilling Program was designed to investigate the occurrence of gas hydrate in the sedimentary section beneath the Blake Ridge on the southeastern continental margin of North America. Sites 994, 995, and 997 were drilled on the Blake Ridge to refine our understanding of the in situ characteristics of natural gas hydrate. Because gas hydrate is unstable at surface pressure and temperature conditions, a major emphasis was placed on the downhole logging program to determine the in situ physical properties of the gas hydrate-bearing sediments. Downhole logging tool strings deployed on Leg 164 included the Schlumberger quad-combination tool (NGT, LSS/SDT, DIT, CNT-G, HLDT), the Formation MicroScanner (FMS), and the Geochemical Combination Tool (GST). Electrical resistivity (DIT) and acoustic transit-time (LSS/SDT) downhole logs from Sites 994, 995, and 997 indicate the presence of gas hydrate in the depth interval between 185 and 450 mbsf on the Blake Ridge. Electrical resistivity log calculations suggest that the gas hydrate-bearing sedimentary section on the Blake Ridge may contain between 2 and 11 percent bulk volume (vol%) gas hydrate. We have determined that the log-inferred gas hydrates and underlying free-gas accumulations on the Blake Ridge may contain as much as 57 trillion m**3 of gas.