A novel way to achieve early commercialisation of tight-sand and shale gas fields: small-scale modularised liquefied natural gas
Hongfeng Wu A * , Kevin Gao B , Fengxu Jian A , Mark Nicholas B and William Walton AA
B
Hongfeng Wu is a Director and Principal Reservoir Engineer at MA and has extensive experience in real-world management of oil and gas assets from exploration, through development, production, and abandonment. With a 28-year career in the oil and gas industry, he is well-versed in the multi-faceted decisions required during project management and re-invigoration of old fields. Previously, Hong Feng held senior technical positions at Shell, BP and CNOOC. |
Kevin Gao is the Managing Director of AMG Integrated Cryogenic Solutions, specialising in liquefied natural gas (LNG) infrastructure, trading, and transportation across Australia and Asia. With over a decade in the energy sector, he has led major LNG projects and mergers and acquisitions (M&A) deals. Previously, he held leadership roles at China Energy Reserve. He holds a Commerce degree and is fluent in English and Mandarin. |
Fengxu Jian is a Senior geoscience advisor who has spent over 30 years delivering top-tier and reliable solutions for a plethora of global oil and gas projects covering field appraisal, development, and production on conventional and unconventional assets in Australia/New Zealand, Southeast Asia, United States, West Africa, United Kingdom, South America, and the Middle East. Fengxu holds a PhD in Sedimentology and Stratigraphy and had worked in key senior technical leadership roles within Chevron for over 20 years. |
Mark Nicholas is a highly experienced engineer and a Fellow of Engineers Australia, with broad experience across a wide range of industries including earth sciences, mechanical engineering, construction, renewable energy, and communication technologies. His career has seen him work as a senior executive across the Asia Pacific region and in global business development roles. An experienced non-executive director, he holds a Bachelor of Engineering (UNSW) and an MBA (Deakin). |
William Walton, Principal, Reserves and Resources at Molyneux Advisors, leverages over 40 years of oil and gas industry experience in asset maturation, development, and assessment. His career, covering a variety of roles in BP and Shell, encompasses resources/reserves consultancy, project leadership, and geoscience studies, underlining his comprehensive approach in leading resource assurance and reporting. |
Abstract
Based upon published reports, tight-sand and shale gas are one of the largest sources of natural gas under development globally, with annual production increasing dramatically from 2008 to 2023. This was particularly so in China, driven by advancements in drilling and completion technology such as multi-stage hydraulic fracturing in long horizontal wells. Given Australia’s geological setting and industrial environment, which have some similarities with USA and Canada, the country has potential to become a major player in commercially viable tight sand/shale gas production. An estimated 12.93 TCF of 2C contingent gas resources have been identified in Australia, primarily located in the Beetaloo Sub-basin within the greater McArthur Basin, as well as in the Cooper Basin, Canning Basin and Bowen-Surat Basins. However, developing tight-sand and shale gas resources in Australia presents numerous challenges, including their remote location, lack of existing gas export infrastructure, and well productivity constraints due to restrictions on the use of hydraulic fracturing. Additionally, a high-cost environment further hinders the path to commercial production. In China, a small-scale modularised LNG production approach has been successfully applied to tight sand/shale gas developments in the Sichuan Basin, demonstrating how early cash flow and extended production information can provide key support for an operator’s financial position in the market, increasing the chance of development. Lessons from these case studies could be instrumental in overcoming the challenges faced by Australia’s operators for development of this resource type, potentially paving the way to successful commercialisation.
Keywords: Australia, China, commercialisation, development challenges, shale gas, small-scale modularised LNG, stranded gas field, tight gas sand reservoir.
Hongfeng Wu is a Director and Principal Reservoir Engineer at MA and has extensive experience in real-world management of oil and gas assets from exploration, through development, production, and abandonment. With a 28-year career in the oil and gas industry, he is well-versed in the multi-faceted decisions required during project management and re-invigoration of old fields. Previously, Hong Feng held senior technical positions at Shell, BP and CNOOC. |
Kevin Gao is the Managing Director of AMG Integrated Cryogenic Solutions, specialising in liquefied natural gas (LNG) infrastructure, trading, and transportation across Australia and Asia. With over a decade in the energy sector, he has led major LNG projects and mergers and acquisitions (M&A) deals. Previously, he held leadership roles at China Energy Reserve. He holds a Commerce degree and is fluent in English and Mandarin. |
Fengxu Jian is a Senior geoscience advisor who has spent over 30 years delivering top-tier and reliable solutions for a plethora of global oil and gas projects covering field appraisal, development, and production on conventional and unconventional assets in Australia/New Zealand, Southeast Asia, United States, West Africa, United Kingdom, South America, and the Middle East. Fengxu holds a PhD in Sedimentology and Stratigraphy and had worked in key senior technical leadership roles within Chevron for over 20 years. |
Mark Nicholas is a highly experienced engineer and a Fellow of Engineers Australia, with broad experience across a wide range of industries including earth sciences, mechanical engineering, construction, renewable energy, and communication technologies. His career has seen him work as a senior executive across the Asia Pacific region and in global business development roles. An experienced non-executive director, he holds a Bachelor of Engineering (UNSW) and an MBA (Deakin). |
William Walton, Principal, Reserves and Resources at Molyneux Advisors, leverages over 40 years of oil and gas industry experience in asset maturation, development, and assessment. His career, covering a variety of roles in BP and Shell, encompasses resources/reserves consultancy, project leadership, and geoscience studies, underlining his comprehensive approach in leading resource assurance and reporting. |
