Optimal dynamic allocation of mobile plants to monetize associated or stranded natural gas, part I: Bakken shale play case study

Title

Optimal dynamic allocation of mobile plants to monetize associated or stranded natural gas, part I: Bakken shale play case study

Publication Type
Journal Article
Year of Publication
2015
Journal
Energy
Volume
93
Issue
2
Pagination
1581-1594
Date Published
12/2015
Abstract

Associated or stranded natural gas presents a challenge to monetize due to its low volume and lack of supporting infrastructure. Recent proposals for deploying mobile, modular plants, such as those which perform GTL (gas-to-liquids) conversion or produce LNG (liquefied natural gas) on a small scale, have been identified as possible attractive routes to gas monetization. However, such technologies are yet unproven in the marketplace. To assess their potential, we propose a multi-period optimization framework which determines the optimal dynamic allocation and operating decisions for a decision maker who utilizes mobile plants to monetize associated or stranded gas. We then apply this framework to a case study of the Bakken shale play. Our framework is implemented to determine the optimal NPV (net present value) which would be realized over a twenty-year time frame. Sensitivity studies on the technology costs and conversion inputs conclude that the profitability and viability of mobile technologies remain valid for a wide range of possible inputs.