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Japan says methane hydrate output test crucial for commercial production

Tokyo (Platts)--10 Apr 2017 943 am EDT/1343 GMT


Japan is set to conduct what will be a "crucial" offshore output test of gas from methane hydrate as its results will decide the future of commercial production, a senior official at the Ministry of Economy, Trade and Industry said Monday.

The Chikyu drilling ship arrived at the Daini-Atsumi Knoll in Nankai trough, 80 kilometers (49.6 miles) south of the Atsumi Peninsula in Aichi prefecture and will start finishing the two production wells already drilled at the site, Yuki Sadamitsu, METI's director of oil and gas division, said at a press briefing.

The test would mark a crucial step in the path to commercialization of methane hydrate production, Sadamitsu said.

Once the production wells are drilled another 50-60 meters to reach methane hydrate layers about 300 meters below the seabed at a water depth of around 1,000 meters, the Chikyu will start extracting gas from methane hydrate using the decreased pressure system for a flare test in late April or early May, he added.

This will be the second offshore methane hydrate production test globally after Japan produced 120,000 cubic meters, or 20,000 cu m/day, of gas from methane hydrate in a six-day offshore production test at the Daini-Atsumi Knoll in March 2013. This followed more than a decade of field research as well as testing of various technologies.

Although there are a number of technical barriers to methane hydrate production, such as achieving sufficient flow rates to reduce output costs, known resources could be large enough to meet Japan's demand for about 10 years, based on its confirmation of 40 Tcf of methane hydrate resources in place in the southern Sea of Kumano in 2007.

Commercialization of methane hydrates would involve deposits of water and methane gas from solid, ice-like hydrates, located deep underwater where cold temperatures and extreme pressure causes the gas to condense and solidify.

LESSONS FROM THE FIRST TEST

The first output test, which was stopped in six days though it had been planned for two weeks due to inflow of sand into the sole production well, Japan was testing two different sand control measures, using shape memory polymers in the two production wells in the upcoming test, Sadamitsu said.

This time Japan aims to produce gas non-stop for about three to four weeks from one of the two wells and test another well with different sand control measures to produce gas for about a week, he said.

In addition, two monitoring wells are being drilled to record changes in temperatures and pressures in different seabed layers during the upcoming production test.

The Japanese government is currently reviewing its five-year Basic Plan on Ocean Policy that will expire at the end of March 2018. It aims to start another commercial methane hydrate project around 2023.

"As part of this process, we are drawing our roadmap for commercializing methane hydrate in the next five to 10 years," Sadamitsu said.

"Based on the upcoming test results, we will proceed to draw our roadmap spend throughout this fiscal year [2017-2018]," he added.

Even if Japan could produce gas from methane hydrate non-stop as planned, it might not mean commercial production soon unless it could produce for five or eight years without stopping output, he said.

Stabilizing output for a longer period and lowering production costs could be "major hurdles" to commercializing gas production from methane hydrate, he said.

Noting that natural gas prices could stay low amid considerable shale gas reserves in the US, Sadamitsu said that "we have recognized that there are bigger hurdles to considerably lowering costs for commercialization."

State-owned Japan Oil, Gas and Metals National Corp., or Jogmec, is leading the methane hydrate output test for METI. Operator Japan Methane Hydrate Operating Co. chartered the Chikyu drilling ship.

JMH was formed in October 2014 as a joint venture by 11 Japanese companies, to take part in the planned next round of testing of pore-filling type methane hydrate.

JMH stakeholders are Japan Petroleum Exploration (33%), Japan Drilling Co. (18%), Inpex (13%), Idemitsu Kosan (5%), JX Nippon Oil & Gas Exploration(5%), Nippon Steel & Sumikin Engineering (5%), Chiyoda (5%), Toyo Engineering (5%), JGC (5%), Mitsui Oil Exploration Co. (5%), and Mitsubishi Gas Chemical (1%).

--Takeo Kumagai, takeo.kumagai@spglobal.com

--Edited by E Shailaja Nair, shailaja.nair@spglobal.com




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