State and U.S. Department of Energy officials are working toward on a plan for a long-term production test of methane from hydrates on the North Slope. The state Department of Natural Resources announced July 31 it was setting aside 11 tracts of unleased state lands on the slope for methane hydrate research.
Methane, the main component of natural gas, is locked in immense quantities in ice-type formations held in permafrost. The U.S. Geological Survey estimates resources of 84 trillion cubic feet across the North Slope.
In recent years industry and government scientists have been gaining a better understanding of hydrates and how the methane might be extracted.
Hydrate research wells have been drilled in the Prudhoe Bay field as well as in the MacKenzie River delta of Canada, with methane produced in tests that lasted several days. The results point toward ways the methane might be commercially extracted, and the next step is a longer-term production test using those methods.
Large quantities of methane in hydrates are also estimated to exist offshore, in the Gulf of Mexico and the continental shelves of many nations. Japan and India have been active in test drilling off their coasts, and earlier this year Japanese researchers conducted the first tests of methane from an offshore hydrate.
In April, the state announced an agreement with the U.S. Department of Energy to cooperate on unconventional oil and gas research, and meetings were held last week in Anchorage between state DNR and DOE officials to map out the next steps, state Division of Oil and Gas director Bill Barron said.
“What we’re proposing is some form of government and industry consortium to begin R&D,” with a long-term production test site in mind, Barron said.
Eventually a solicitation of interest will be circulated to industry, either to a select group of companies or an open solicitation, he said.
BP and ConocoPhillips were operators on two separate previous tests on the North Slope, as well as Anadarko Petroleum in an earlier test, all with participation and co-funding from the DOE and participation from Japanese companies interested in methane hydrates.
The BP and ConocoPhillips tests were within the Prudhoe Bay field and there were concerns at the time about the test drilling programs possibly interfering with ongoing oilfield operations.
Barron said the current initiative is aimed at identifying a site outside the existing fields but close enough to take advantage of infrastructure.
The 11 tracts selected are just north of the Prudhoe field and are unleased. The state has withdrawn the tracts from the upcoming fall North Slope onshore and Beaufort Sea lease sales, Barron said.
“These tracts were selected due to their potential to support methane hydrate research. They share four characteristics: proximity to known hydrate deposits, location within zones with a probability of hydrate occurrence; proximity to existing North Slope infrastructure; and unleased, unemcumbered status,” Barron said in a statement.
In an interview, Barron said state and DOE scientists selected the area after evaluating 2-D and 3-D seismic data the state has on file. The seismic work was done by industry and was shared with the state so that it can be used for resource evaluation, Barron said, although the state must hold it confidential.
As the state-DOE evaluation continues some additional seismic may be required by the proposed consortium to narrow down a site for a well and production test.
Initially an ice pad and exploration well would be drilled to confirm the hydrate presence. If work continues, a gravel pad and facilities to support a long-term test could be built.
The level of interest in methane hydrates by established North Slope companies like BP and ConocoPhillips is uncertain given the glut of natural gas in North America and the uncertainties as to whether the large conventional gas reserves of the slope can be marketed.
However, Japanese companies or Indian companies may be interested in a consortium because of the lack of large conventional gas resources on those countries.
“We believe there will be industry players. We think the Japanese will be interested,” Barron said.
The confirmation of possible production technologies for hydrates done at a North Slope test site can help companies in Japan develop their own offshore hydrates, just as the initial research wells provided information that helped Japan’s recent tests.
Barron said the state’s contribution of the leases, involving 26,000 acres, is a substantial commitment to the effort with DOE, which will be contributing its resources, including budget and technical expertise.
Tim Bradner can be reached at email@example.com.