Large new gas resource on North Slope, from methane hydrates, to be tested this winter

Alaska’s North Slope has always been a kind of technology incubator for the petroleum industry.

Horizontal drilling and “multi-lateral” wells, where several wells are drilled underground, were all done first, at least on a commercial scale, on the slope.

Now another breakthrough technology, and a potential vast new resource, is to be tested

A U.S.-Japan consortium of government research agencies will conduct the first long-term production test of methane, the main component of natural gas, produced from hydrates, an underground ice structure.

Hydrates can hold immense amounts of methane, and scientists in government and industry have long thought that of ways could be found to produce gas from hydrates it would open a vast new resource for the North Slope and elsewhere in the Arctic, and offshore, where hydrates are found.

Alaska’s Division of Oil and Gas has approved a drilling agreement Aug. 4 for test production wells to be drilled into a hydrate in the Prudhoe Bay oil field.

The consortium – of the Japan Oil, Gas and Metals National Corporation (JOGMEC), the U.S. Department of Energy, the U.S. Geological Survey, and the U.S. National Energy Technology Laboratory –– is funding the effort to conduct a long-term production test through 2024, said John Crowther, Deputy Commissioner of the state Department of Natural Resources.

Crowther said three wells are planned, one for monitoring and two for the production test. There is also an existing well, drilled previously to determine the location of the hydrate and to draw core samples for analyisis, that will be a second monitoring well.

Site preparations are underway now and drilling will begin this winter, with production continuing for about a year. ASRC Energy Solutions, a subsidiary of Arctic Slope Regional Corp., the Alaska Native development corporation for the North Slope, will manage the project, Crowther said.

Hydrates are ice lattices, or structures, that form under certain temperature and pressure conditions. Hydrates are known to exist across the Arctic including the North Slope and in certain offshore locations, such as off Japan’s coasts, which is why Japan’s government research organization, JOGMEC, is interested.

Industry has other reasons for wanting to know more about hydrates, because they can be drilling hazards. Drillers have unknowingly penetrated hydrates, where the pressure of released gas can be very high, and well gas blowouts have occurred. No injuries or spills of hydrocarbons have yet resulted but companies are concerned about the potential injuries, fire and damaged equipment.

With industry cooperation the U.S. agencies an JOGMEC have worked together over several years on ways to identify the presence of hydrates, in part to locate potential drilling hazards.

The consortium of agencies have located hydrates on the North Slope and in Canada’s MacKenzie delta. Hydrates have also been found offshore Japan by JOGMEC and limited production tests were done in Canada and offshore Japan.

But while the ability to produce methane has been shown a long-term production test is needed to test the feasibility of continuous production, at least technically.

The research consortium will now do a long-term test after negotiating an agreement with North Slope oil producing companies to conduct the test using existing infrastructure in Prudhoe Bay, which will lower costs.

Prudhoe owners Hilcorp Energy, ConocoPhillips and ExxonMobil have agreed to the use of the field facilities, which they own.

“Alaska is one of the only areas with well-characterized and abundant onshore subsurface hydrate deposits close to existing oil and gas infrastructure, the Division of Oil and Gas said in its statement.

In 2018, the U.S. Geological Survey assessed the mean undiscovered conventional resource potential of methane hydrates on the North Slope to be almost 54 trillion cubic feet of gas.

While the resource is ther, it’s not clear that methane can be extracted from without destabilizing the hydrate by lowering its pressure, possibly causing it to dissolve.

The goal of the current project is to determine whether the methane can be predictably and consistently produced in a way that maintains the stability of the hydrate.

Scientists believe it can be done, although the mechanisms must be better understood. A particular problem the agency scientists will focus on is a “freezeback” problem, where the depressurization of the hydrate caused by the withdrawal of methane causes it to freeze up again, stopping the flow of gas.

Scientists believe this problem can be solved by withdrawing methane gradually so the freezing doesn’t occur, but determining the proper rates of withdrawal is important.

There is some evidence that gas released from hydrates does occur, however. There are anecdotes of gas production from shallow gas fields in the Russian and North American Arctic that appear to come partly from hydrates adjacent to the conventional gas reservoir.

For example, at the South Barrow gas field at Utqiagvik, on the North Slope, gas has been produced for the local Inupiat for decades with no sign of pressure loss in the reservoir, which has been a puzzle for petroleum engineers and geologists.

Indications are that the reservoir is being replenished with gas from an unknown source, and a hydrate is suspected.

Meanwhile, if the technical feasibility of producing from a hydrate can be demonstrated there is also the question of whether it can be done economically. For example, if the gas can only be produced at low rates to avoid a freeze-back, is the quantity sufficient to make the project profitable?

Only time and further tests can determine that, but once public sector government researchers solve the science problems, the private sector can step in with companies finding ways to improve productivity and lower costs.

However, there is also the question on how to get this potential immense resource to market from the North Slope, because there are already large resources of proven conventional gas on the slope but no way to transport the gas, at least for now.