Economic Analysis of Offshore Gas Field Development – SGRI 2016

SESSION: SGI – Research translation and commercialisation – Wednesday 28th September (12:55-13:10)

Kris photo B&WTitle: Economic Analysis of Offshore Gas Field Development

Author: Kris Anderson

The year, 2016, has seen Japanese Liquefied Natural Gas (LNG) import prices fall below 6 USD/mmBTU from highs of over 18 USD/mmBTU in 2012. This has led to several high profile deep water LNG projects being either delayed or cancelled. There is therefore an urgent need for deep water operators to find ways to reduce costs so that deep water assets can be profitable. Smaller gas fields are typically the most challenging to develop, as the small volumes of gas make it difficult to obtain a return on the large capital expenditure necessary to develop deep water fields. A successful approach commonly utilised in the North Sea sector is to tie-back smaller fields to existing infrastructure. Subsea boosting technology has made long distance tie-backs a commercial reality, creating the potential to produce deep water gas fields that are too small to justify dedicated infrastructure. This presentation will discuss some of the economic and technical aspects associated with long distance tie-backs either to shore or to existing offshore infrastructure.