Turning flare gas into revenue makes sense. But manually evaluating the many “Gas to Value” (G2V) alternatives is complex and time-consuming. A model that combines rigorous techno-economic analysis with thermodynamic simulation can speed up the search for a site’s optimum G2V solution. With examples from two North American basins.
GLEN HAY and DREW POMERANTZ, SLB
There’s growing pressure, both in the U.S. and globally, to end routine flaring and cut flaring-related greenhouse gas (GHG) emissions from operations. Beyond the regulatory and reputational risks, flaring associated gas is a missed revenue opportunity. While voluntary or regulatory flare elimination is often viewed as a cost, under the right circumstances flare elimination can turn a profit. But not all options do.
HOW NOT TO FLARE: MYRIAD OPTIONS
The most common alternatives to flaring associated gas are to either reinject it, combust it for power/heat generation or export it for sale. Historically, routine flaring was put in place when neither of these three options made economic or operational sense. There were no other alternatives. Today, a whole host of technologies exist to make better use of associated gas. These “Gas to Value” (G2V) technologies offer ways of converting gas into sellable or locally usable products.
Broadly speaking, there are four groups of G2V options, by product. Associated gas can be turned into:
Fuels, including, among others, compressed natural gas, liquefied natural gas and hydrogen.
Power, including for local use, transmission to grid or for computing (including the mining of cryptocurrency);
Specialty chemicals, including, among others, methanol, mixed alcohols, formaldehyde and urea;
Specialty products, including carbon fiber, fertilizer and artificial protein.
These four groups only show the types of products that can be made. In many cases, there are multiple ways to make a single product.
For example, if the product is power (Fig. 1), that could be made with an engine or with a turbine. Additionally, there are different gas processing steps that are required (for example removing H2S, removing CO2, removing H2O), depending on local factors. Based on those three considerations alone (product, process, extra steps), the number of possible G2V solutions multiplies quickly. In practice, only a few will be technically suitable for a given site, even before economics are considered. When it comes to G2V technology, there’s no shortage of options and no single silver bullet.
So how do operators interested in G2V decide which technology is the right solution for their asset? If and how well a G2V technology will perform at a site depends on countless local factors across geology, infrastructure and market conditions. Manually evaluating and ranking each technology’s specific performance in the context of these local factors is complex, time-consuming and, frankly, near impossible. This is compounded further by the fact that some of the technologies available today utilize processes — reactive conversion, for example — that are less common in upstream processes and therefore less familiar to operators.
The authors outline a solution to this challenge: a proven G2V assessment methodology that uses rigorous techno-economic analysis and thermodynamic simulation to determine technical feasibility, revenue generation and emissions reduction for each technology at a specific location.
The resulting model pulls in a diverse set of economic, technical and practical variables, as well as accommodating an operator’s specific goals — so operators can see an accurate picture of the costs and benefits of each technology and choose the right solution for them.
ALL OPTIONS CONSIDERED, OVERLAID WITH THERMODYNAMICS
At the heart of the techno-economic analysis sits detailed intelligence on a broad range of established and (vetted) new G2V technologies. This information is constantly updated, with ongoing research identifying feasible G2V technologies and providers amongst the many fresh arrivals.
The performance (both economic and operational) of G2V technologies at a specific location is hugely dependent on the properties of the flare gas they are being applied to, such as the flow rate, pressure, and composition. This is why thermodynamics is an important part of the overall analysis. It helps us understand how energy transformations happen and, crucially, how efficiently they happen.
Thermodynamic process simulation is used across the energy industry to design and optimize processing plants and other facilities—by considering the specific chemical properties of the gas or fluid that is being processed and modeling its behavior under specific conditions (flow rate, pressure, temperature) for a given process. For example, thermodynamics can model whether a horizontal separator or a vertical separator will more efficiently separate oil and gas based on the oil density, gas richness, and gas-to-oil ratio.
More recently, engineers have created thermodynamics models of the dozens of different G2V processes (Fig. 2). Combining these models with local information, such as the flare gas volume and composition, allows thermodynamic simulation to determine each technology’s site-specific efficiency (how much product a technology is going to make), product specification (which determines the price the product can be sold at) and power/resource requirements (how much it is going to cost to make the product). Any required pre- or post-treatment, to cope with H2S for example, is also modeled as part of the thermodynamic simulation. Using a consistent simulation engine for all G2V solutions reviewed, plus any pre-treatment required, ensures the results used for the comparative analysis are all based on the same assumptions.
The modeling is flexible and easily updated as vendors improve their equipment — with new catalysts, for example. The simulation engine (SymmetryTM process simulation software), which creates processes with unit operations connected by fluid streams in a mass and energy balanced environment, also provides accurate molecular-level analysis of input and output chemicals and their interactions with other gases and fluids like natural crude. This is essential to precisely calculate product specification under varying operating conditions.
To ensure that the models for each technology are based on accurate and robust equipment and process data, technology performance is verified in the field through boots-on-the-ground visits to operational sites. This includes confirming equipment specifications, making independent measurements of input and output flows, and taking samples to check gas composition. Running this real-world data through the simulation can reveal deviations from a vendor’s claimed process efficiency and ensure the accuracy of the modeled results.
Results from the thermodynamic simulations form the basis of a full techno-economic analysis. For each G2V technology, thermodynamics computes the quality and quantity of product created, as well as the amount and type of inputs required (including power, labor, water, etc.). Economic estimates of the prices of G2V products and cost of G2V inputs then turn the thermodynamic models into predictors of profit and loss. In many cases, those prices and costs have significant regional variability: for example, the prices of products like methanol and costs like labor vary dramatically from region to region. In many cases those future prices are uncertain, and sensitivity analysis can identify the risks different G2V technologies are exposed to based on future price changes.
The deliverable of this technoeconomic analysis is a report describing every feasible G2V technology that could be implemented at a specific location and estimating its location-specific profit and loss as well as its overall GHG emission. With that information, operators can select the right G2V technology for their location.
G2V ANALYSIS, IN PRACTICE
Flare gas monetization projects start with gathering a range of site-specific parameters and factors, as well as capturing the operator’s plans and objectives.
In many cases, the duration of a G2V project has a particularly large impact. Years-long projects with consistent volumes are ideal, but G2V projects can also be short-lived. They can have gas volumes that drop as wells age, or that rise as new wells nearby come onstream.
Lead times for G2V equipment also matter in the context of project timing, as does the maturity of technologies (i.e., their technology readiness level/TRL). Some operators explore the upside of emerging G2V technologies, while others prefer to stick to fully proven solutions.
Based on the above parameters, preferences and priorities, initial technoeconomic analysis often quickly identifies a short list of most promising G2V technologies. The analysis also flags potential issues with some equipment or the need for pre-treatment, which can add cost. For example, some G2V technologies are highly sensitive to H2S, and some are not. The analysis identifies which technologies will be inefficient because they require extensive sweetening, and which ones can avoid that expense.
Once the most likely products to convert the associated gas into have been identified, the analysis looks in detail at the different ways to produce that product. The model is typically rerun many times to compare scenarios with different equipment combinations to show how various equipment choices affect efficiency, production volumes, environmental footprint, the cost of equipment and net profit.
CASE STUDY: Finding the right G2V solution in the Uintah Basin
A flare gas monetization project in the Uintah Basin in the central U.S. aimed to both reduce emissions and create revenue. In evaluating many potential products that the flared gas could be converted into, G2V analysis revealed a serendipitous match between the chemistry of a synthetic fuel that could be produced and the chemistry of the local crude. This match made gas-to-synthetic fuels (mainly gasoline and diesel) a particularly profitable G2V technology in this specific location because the matched chemistry between the synthesized and natural hydrocarbons results in significant cost savings downstream.
In addition to revenue generation, the operator was particularly interested in emissions reduction from G2V. Thermodynamic analysis also computes the GHG footprint of G2V technologies, and Figure 3 shows emission contributions from carbon dioxide and methane (at x25 global warming potential) for some of the different G2V scenarios considered at Uintah.
The following runs through some of the considerations made to narrow down, refine and optimize G2V options as part of the project, highlighting interesting aspects and challenges of this particular G2V analysis — and the factors that can significantly shift the economics of a given solution.
LOCAL FACTORS
The Uintah example also highlights the complex interplay of location factors and their impact on G2V choices. Both technical feasibility and economic performance of a G2V technology depend on local factors that fall into three groups:
Geological factors (for example, gas composition and volume, ambient temperature);
Infrastructure factors (for example, equipment already installed to process or transport gas/product; availability, cost, and GHG footprint of grid power to run equipment);
Market factors (for example, attainable prices for product produced, existence of and distance to markets for specific products).
In the Uintah project, local gas composition — rich, sweet gas — was perfectly suited to CNG/LNG conversion but the distance to market was an issue. Trucking costs pushed CAPEX and OPEX too high.
The route to market is easier if flare gas can be treated or converted to a fluid suitable for blending with the liquids or gases already produced and exported. Molecular-level modeling (as part of the thermodynamic simulation) accurately predicts product specification to indicate if this is feasible with a given technology scenario, where simple index rules for blending would be far too inaccurate. This analysis was key in finding the best option in the Uintah project. The Uintah’s uniquely high paraffinic natural crude was a good match to the proposed synthetically produced hydrocarbons (Ref. 1).
That meant it blended well, but the resulting fluid’s pour-point temperature was very low. That risked wax formation in the blended fluid which might require heating during transportation or upon delivery. Molecular level analysis identified a maximum amount of the synfuel that could be blended to the natural crude before wax formation became a problem. From there, the analysis determined the optimal way to blend the synthetic fuel and natural crude to maximize profit and mitigate the risk of wax formation.
WHEN THE PRICE IS RIGHT
Adding the synfuel at the gasoline and diesel cut ranges also meant the blended crude additions could fetch significantly higher price than that raw crude oil in local markets.
The model confirmed that gas-to-synfuel was the optimal overall solution: these specific synfuel cuts would be transportable, and the equipment would run reliably in local conditions — yielding excellent revenue while reducing overall emissions from flaring by 60–85%.
EQUIPMENT MATTERS
The Uintah project also illustrates another key success factor in optimizing G2V solutions: matching plant size and turndown capacity closely with input gas volume and variability. Figure 4 shows a generic turndown capacity versus flaring volumes for a decline production curve over time. In this scenario, multiple smaller solutions of the same technology can be chosen over a larger-scale version due to scheduled mobile removal of extra capacity over time.
Operating a plant at maximum capacity typically gives the greatest efficiency, and it is usually possible to engineer a plant where the capacity matches current production. However, if production declines, the plant must be operated at reduced capacity—and reduced efficiency—or additional gas must be purchased and delivered to the plant.
The G2V analysis can consider incline and decline production curves, along with changes in gas composition, to find the best economic solution for the whole life of the project. Though perhaps less efficient initially, deploying multiple smaller units instead of a single larger unit not only adds flexibility to handle a range of production volumes but also usually costs less if the larger unit needs to be customized for feed volumes. If the standard fabricated sizes of off-the-shelf equipment do not align well with gas volumes, customizing can add 50% or more to the cost.
Multiple smaller units can be slowly turned down (and off) as volumes drop. Spare assets can potentially then serve other parts of the field, so they must be mobile — another consideration the model can accommodate. For the Uintah project, it was able to propose a practical equipment solution that would be fast to deploy and able to adapt to changing needs over the duration of the project.
CONCLUSION: FIND THE VALUE IN YOUR FLARE
Not flaring associated gas can make business sense. G2V technologies offer opportunities to generate revenue from the gas. The rigorous and proven methodology presented here accelerates the search for the right G2V solution(s) for a given site. It is technology agnostic, looking to assess and compare all available G2V technologies in the context of a specific site. It can quickly eliminate candidates from the widest range of options, while reducing project risk and speeding up deployment.
There is no such thing as one “best” solution, only the optimal solution for each well and operator. In the authors’ experience, most of the time, at least one alternative is viable. And when that optimal solution is found, it is a triple win: effective G2V technologies help comply with regulations, reduce overall GHG emissions and increase revenues.
As G2V becomes common practice, the type of techno-economic analysis presented here serves not just to make the best decision, but to also reduce the cost of that decision-making process. The authors hope that this will persuade more operators to embrace the benefits — and access the revenue opportunities — of ending routine flaring.
BAKKEN OPERATOR CUTS COSTS, MAXIMIZES EMISSIONS REDUCTIONS
A large producer in the Bakken shale wanted to stop flaring at multiple wells without pipeline connections and to cut emissions as much as possible.
G2V analysis focused on the ten largest wells that accounted for half of emissions. Just under 40 scenarios were considered in detail. Those that didn’t give the emissions reductions the operator was looking for were discarded.
Winter snows in the North Bakken often make road access difficult, so that ruled out G2V processes requiring a consumable (such as solvents or inhibitors) that would have to be trucked to location. But the low temperatures also mean local demand for methanol is high — for use as an antifreeze and for flow assurance.
Because of this high local demand for methanol, synthesizing it from associated gas quickly became the frontrunner of the G2V options under review. Methanol as an output product was then explored in more detail, using thermodynamic modeling and techno-economic analysis to compare various methanol processes.
The analysis showed a two-step process could produce high purity methanol, but exporting it for sale was uneconomic. However, the analysis determined gas-to-methanol could be economic if the methanol could be used by the operator on the same locations where the technology would be installed. In addition, the analysis determined that a single-step methanol production process, which generates a lower purity methanol, was more cost-effective and still produced a sufficient purity to inhibit local pipeline hydrates and work as an antifreeze.
As a result, the G2V study recommended converting flare gas to methanol via a single step process and using that methanol on location. The chosen process minimized input costs; matched the local temperatures, the low feed gas volumes, and the gas properties; and could easily tolerate the purity of the synthesized methanol. The plant was relatively simple and small enough to fit on one flatbed truck, which again suited the remote location.
In this project, the operator’s need for low-purity methanol (in well-matched quantities) meant that synthesizing their own methanol was the most efficient G2V option, because it allowed the operator to stop flaring and stop buying methanol (in unnecessarily high purity). WO
REFERENCES
G. A. Hay, A. E. Pomerantz, and K. R. Pfeiffer, Thermodynamics Behind Rigorous Flared Gas Monetization Analysis, SPE HSE Conference and Exhibition, Abu Dhabi, UAE, 10-12 September 2024. SPE-220423-MS. https://doi.org/10.2118/220423-MS
G. Lorenzato et al., Financing Solutions to Reduce Natural Gas Flaring and Methane Emissions, World Bank Group, 2022. http://dx.doi.org/10.1596/978-1-4648-1850-9
Hay, G. and Kelly, K. 2023. Don't Flare, Monetize, Online SPE Tech Talk. https://streaming.spe.org/dont-flare-monetize (accessed November 2023).
Flaring management guidance for the oil and gas industry, Report 467, IPIECA-IOGP-GGFR, 2021. https://www.worldbank.org/
Glen Hay is an Emissions Management Consultant at SLB. With a background in chemical engineering and advanced process control, Glen has over two decades experience from downstream, petrochemical, and new technology projects globally. He has 14 peer-reviewed publications and four patents to his name. Part of the 2021 IOGP flares & vents taskforce, he joined the SLB methane team in the same year, focusing on flare monetization.
Drew Pomerantz leads the development of new methane and flare abatement technologies at SLB as an Emissions Technology Manager. He works with regulators, policymakers, entrepreneurs, and academics to advance methane technology and helps operators design and implement methane monitoring and reduction campaigns. An SPE Distinguished Lecturer 2022-23, Drew has a PHD in chemistry from Stanford, has published over 100 peer-reviewed papers and holds 25 patents.
