Ziff Energy, GPMi Launch LNG Study

Ziff Energy and Gas Processing Management Inc. analyze the gas growth areas of the Western Canadian Sedimentary Basin in Alberta and British Columbia.

Ziff Energy, a division of HSB Solomon Associates LLC (Solomon), and Gas Processing Management Inc. (GPMi) announced the launch of the Gas West for LNG Growth Study, which analyzes the gas growth areas of the Western Canadian Sedimentary Basin in Alberta and British Columbia as key suppliers of natural gas to the developing liquefied natural gas (LNG) facilities on the West Coast of British Columbia (Canada) and Oregon (United States).

The proponents of 16 natural gas liquefaction (NGL) and export facilities have applied to the Canadian National Energy Board for licenses to export gas volumes or have announced potential projects. More than 30 Bcf/d of natural gas feedstock may be required from a basin that currently produces 13 Bcf/d—a sizeable potential production, investment, and activity growth opportunity.

“It is no longer the lower price of Canadian gas that will drive activity levels,” said Bill Gwozd, P.Eng., Senior Vice President of Gas Services at Ziff Energy. “Instead, it is the full-cycle cost of drilling and field exploitation, gas gathering and processing, gas transport to the West Coast, gas liquefaction, LNG tankers to Asia, and regasification for Asian gas utilities and industrials that will determine the ultimate volume of LNG that will be harvested from Canada. If the Canadian industry can manage the full-cycle costs of the LNG chain and compete on a worldwide scale, then Asia will consume as much LNG as we can reasonably deliver,” says Gwozd.

The Gas West for LNG Growth Study will:

• Assess the risk associated with the proposed LNG facilities and construct an independent assessment of how activity in the basin will unfold.
• Forecast gas production to 2035 from the growth areas with a focus on tight gas in the Cretaceous and Montney formations, and shale gas in the Duvernay, Horn River, Liard, and Cordova Basins.
• Sequence basin development based on resource ownership, gas characteristics, hydrocarbon liquids content, development costs and economics, and LNG facility access.
• Assess the required long-haul gas feedstock pipelines to the LNG facilities to build a logical case for integrated development.
• Analyze the existing sales gas systems to the producing area’s gas processing facilities and define opportunities to modify, expand and construct new pipes.

The Gas West for LNG Growth Study, the first step toward understanding natural gas as a specific product focus, will be released in the second quarter of 2014. This study is the fifth in a six-study series titled, “Western Canada Gas Supply and Infrastructure Study,” which are supported by 50 industry subscriptions and 25 different companies.

The four completed studies in the series are as follows:

• South Montney Tight Gas Growth, January 2012
• Tight Gas and North Duvernay Growth, June 2012
• South Duvernay Growth, February 2013
• North Montney and Shale Gas Analysis, November 2013

The series’ sixth study, titled “Western Canada NGL Supply and Infrastructure Growth Study – Impact of LNG Development,” will analyze similar issues related to NGL. This study will be available in the third quarter of 2014.

“The completed studies provide important and timely analyses that detail the resource and optimize the development of the infrastructure for the gas growth regions in Western Canada from an independent and unbiased perspective,” said Bob Child, P.Eng., Principal at GPMi and a study co-author. “They focus on optimizing capital, reducing operating expenses, enhancing product recoveries and shortening cycle times as if an industry team owned all the resources and assets.”

The Gas West for LNG Growth Study is based on publically available data sources; no data is requested from study subscribers. Due to the developing nature of the area infrastructure, Ziff Energy and GPMi may conduct interviews with operators of existing and developing infrastructure to ensure that the study uses the most current data.

Ziff Energy and GPMi will jointly analyze and develop the strategic analysis for the owners and operators of the LNG plants, production and infrastructure, and for investors, governments and interested parties to consider.

“We believe that the Gas West for LNG Growth Study has the potential to support the industry in its efforts to effectively and efficiently develop an Asian-focused LNG supply,” adds Bill Armstrong, P.Eng., Principal at GPMi. “An integrated approach has the potential to decrease capacity overbuild and improve utilizations, increase the efficient use and overall effectiveness of the infrastructure, increase recoveries of the associated resources and ultimately result in increased competitiveness of the Western Canadian basin on the North American and international markets. LNG purchasers consider several factors including the growth of LNG markets, the decline of existing LNG supply sources, diversification and reliability of LNG supply locations, and the delivered price.”

ziffenergy.com

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