Chinese Natural Gas Announcement: Much Ado About Nothing -- November 24, 2022

This is simply for the archives and to put things into perspective.

In a long note like this, there will be content and typographical errors. Links will take you to very old postings; some of the links will be broken. This is for my edification. Readers may want to fact check everything. If there's one thing I don't understand when it comes to fossil energy, it's natural gas and how it's measured.

There is a lot here but the bottom line: the Chinese announcement that came out this week regarding a newly discovered natural gas reservoir is trivial. Lots of ado about nothing.

This Chinese play won't be developed until I'm long past investing. Maybe Sophia will be in charge of the family portfolio by then.

But here we go.

First, re-look at these blog posts from long ago:

• terms: confusion (see below, if interested, unimportant for this discussion).

• natural gas king: US -- natural gas "king."

• global reserves: Arctic LNG

• proved reserves: 

Other recent stories on natural gas reserves

• Marcellus: 480 trillion cubic feet of technically recoverable gas,

• reserves, staggering:

Disclaimer: I often make simple arithmetic errors. Numbers rounded. Natural gas reserves according to BP/wiki, 2013 - 2014 (US estimate as of December 2013). Top five countries:

• Russia: 6,000 trillion cubic feet
• Iran: 1,000 trillion cubic feet
• Qatar: 900 trillion cubic feet
• Turkmenistan: 600 trillion cubic feet
• US: 350 trillion cubic feet
• #11: Australia: 152 trillion cubic feet (as of January, 2014). (See this post.)
  

Now, let's go back and re-run the numbers that were posted earlier:

• that recent huge Mediterranean natural gas find: 30 trillion cubic feet
• Barnett, revised USGS figures: 53 trillion cubic feet
• Utica, newly revised figures: 782 trillion cubic feet
• Marcellus, EIA revised estimates: 65 trillion cubic feet, "proved" reserves
• Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
• Qatar: 800 trillion cubic feet, wiki, conversion

Maybe it's just me, and maybe I made a colossal mistake, but if I did not make a mistake -- and I often make horrendously simply arithmetic errors -- but if I did not make a mistake:

• the Utica alone, newly revised, has more reserves than Turkmenistan, #4
• the Utica and the Marcellus, along, would put the US in the #3 position, ahead of Qatar
• if the US fields not included are similarly revised, it's possible the US would move to #2, second only to Russia

If this is accurate, this is another under-reported story in the US. I don't always agree with Thomas Boone Pickens, but in this case, I think he had it right. It's a crying shame what the Obama administration is doing to the US.

Now, today, from oilprice: 

Conversion, bcm to tcf:

• 146 bcm = 5.1556 tcf (this number may vary slightly from site to site)

From The Oil & Gas Journal, December 17, 2021:

USGS reports that Williston basin’s Bakken and Three Forks formations within Montana and North Dakota include 4.3 billion bbl of unconventional oil and 4.9 tcf of unconventional natural gas, both reduced from its 2013 assessment.

The US Geological Survey (USGS) reports that Williston basin’s Bakken and Three Forks formations within Montana and North Dakota include 4.3 billion bbl of unconventional oil and 4.9 tcf of unconventional natural gas.

This assessment is for undiscovered, technically recoverable resources and updates a 2013 USGS assessment of Williston basin which found that undiscovered reserves totaled 7.4 billion bbl for Bakken and 6.7 tcf for Three Forks.

Since the 2013 assessment, more than 6,400 additional wells have been drilled in the Bakken formation, and about 4,100 wells have been drilled in the underlying Three Forks formation, resulting in both more production and more knowledge of the basin’s resources.

To date, more than 17,500 total wells have been drilled into Bakken and Three Forks formations, and about 4 billion bbl oil have been produced from these units.

The Bakken boom began in Montana in 2000 and in North Dakota in 2007.

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Terms of Confusion

Some links may be broken after all these years.

See this post from LinkedIn.

This is a long, long post, but I think the best bit was this, and yes, the writer actually says it ... near the bottom of the post, and I quote verbatim:

The question I always get is how long does one TCF of gas last? The answer depends on ... how fast you take the gas out of the reservoir. 

LOL. I haven't had so much fun since I read Art Berman's analysis of the shale revolution.

I may have posted this years ago. I don't know. If not, I should have. From Bharat (Bob) Shah over at LinkedIn, he begins:

If you are associated with any aspect of an LNG plant, you know that the LNG plant capacity is always specified in tons per year. And that the LNG onshore storage is always in cubic meters and so is capacity of LNG carriers. And then LNG is sold on dollars per MMBTU. The heating value is in BTU/SCF. The gas flow coming in the plant is referenced in MMSCFD and the reservoir capacity is TCF. 

And that's the problem:

• LNG plant capacity: tons per year
• LNG onshore storage: cubic meters
• LNG carriers: cubic meters
• LNG is sold: on dollars per MMBTU
• heating value: BTU/SCF
• gas flow in the plant: MMSCFD
• reservoir capacity: TCF
• size of the head of a pin: measured in the number of dancing angels

So, Bob makes it very, very simple:

• Basis: one train, in his example, has an annualized 5 MPTA or 5,000,000 tons/year or 5 million tons or, I suppose, 5MM tons, or maybe 5 M tons 

• So, back to the 5 MPTA = 571 tons / hour   (divide 5 million by the number of hours in a full year, 8,760 hours in a full year)

• 571 tons/hour = 1.26 MM (yup, all of a sudden we have switched to "MM") lbs/hour

• 1.26 MM lbs/hour = 75,449 Lb-Moles/Hour  (I can't make this stuff up, a quick switch from "lbs" to "Lb-Moles" -- which for a moment I thought was lobster-moles)

I assume we're about to get to the number of angels dancing on the head of a pin.

So, a few more calculations, and we get to, and I can't make this up either, 1TCF approximates (we've been using "equal" signs until now, but now it's an approximation) 18 MM tons of LNG.