Solution Gas Utilization Alternatives
Authors: Wagner J.V. 
Published: October 2008

Abstract
Currently, there are two Canadian offshore oil production projects under way. The first, the Gravity Base Structure (GBS) concept based Hibernia field development, has reached its initial production phase. The second project, the Floating Production Storage Offloading (FPSO) concept based Terra Nova field development, is in its engineering and construction phase. In both instances, the solution (associated) gas in excess of fuel requirements is proposed to be reinjected as an energy conservation measure.
Several other projects, such as Husky's White Rose and Chevron's Hebron, have significant potential for future development in the same area. It is highly probable that these projects will employ the FPSO concept. It is also expected that the solution gas disposal issues of such second generation projects will be of more significance in their regulatory approval process and the operators may be forced to look for alternatives to gas reinjection.
Three gas utilization alternatives for a FPSO concept based project have been considered and evaluated in this paper:LNG productionMethanol productionGas-to-liquids conversion
The evaluation of these alternatives is based on a first passs creening type of study which considers the technical and economical merits of each alternative. Publicly available information and in-house data, compiled within Fluor Daniel's various offices, was used to establish the basic parameters.

1.0 Introduction
Oil and gas development in the Province of Newfoundland and Labrador is in its early stage and the offshore industry emphasis is almost exclusively on oil production. At the Hibernia field, the GBS is installed and the first wells are in production. The Terra Nova project, based on an FPSO shipshaped concept, is in its engineering and construction stage and first oil is expected by late 2000.
The next generation fields, White Rose and Hebron, intended to undergo delineation drilling in late 1998 and early 1999. Conceptual engineering activities for these fields may start in mid-1999, with first oil production slated for late 2003 or early 2004. Figures 1–1 and 1–2 indicate the relative locations of Newfoundland and the individual fields and projects, in the Grand Banks area, offshore Newfoundland.
While the offshore industry is presently focused on the oil potential of the Grand Banks area, it is believed that gas may be available in quantities that will meet a commercial threshold. To meet the commercial threshold, estimated at about 500 MMSCFD for an approximate 15 year plateau, coordinated planning for all the developments may be required. The aggregate reserves would have to include gas associated with produced oil, gas resident in the gas caps of the oil zones and gas located in gas-only fields. However, it is believed that such a coordinated development is 8 to 10 years away. For this reason, the first and second generation oil production projects, which will be coming on stream between now and 2006, are left with few options regarding solution gas disposal or utilization and they will be project specific. The current method of solution gas disposal is either by reinjection into an oil producing zone, to maintain the reservoir pressure, or reinjection to a storage zone as an energy conservation measure. Flaring is only permitted in an emergency situation and for ashort time duration. From a reservoir management point of view, long term gas injection for pressure maintenance is not always possible or practical. Depending on the structure, the injected gas can break through and in many instances gas reinjection can result in reduced oil production and lower oil recovery levels. He