Shale Gas Innovation & Commercialization

Transcription

1 Shale Gas Innovation & Commercialization Shale Gas Innovation & Commercialization Established Spring of 2011 by the Ben Franklin Center Established Technology (SGICC) Spring Partners of 2011 of by Central the Ben & Northern Franklin PA Technology Partners of Central & Northern PA Goals & Objectives: Goals Discover, & Objectives: encourage and support translational Discover, research encourage and technological and support developments translational in research small and companies technological developments in small companies to: to benefit the growth of the shale gas play in benefit Pennsylvania the growth in of an the environmentally shale gas play sound in Pennsylvania in an environmentally manner sound manner create jobs for the citizens of the Commonwealth

2 How Much Natural Gas Can The Marcellus Shale Produce? How Much Natural Gas Can The Marcellus Shale Produce?

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4 A wide range of jobs are necessary for drilling and operating Job Type and Headcount for a Typical Gas Well Layout data recorders Fracture stimulate well Transport - Drilling Drilling for 3-D seismic Seismic surveying Drilling contractors Seismic permitting Construction and restoration Coil tubing clean outs Cementers Install production equipment Workover rig crews Casing crews Frac tree and manifold set up Water equipment set up Directional drilling Flow back water hauling Wireline company personnel On site supervision Surveying Top Drive provider Frac Tank providers Drilling mud and chemicals provider State inspectors On site supervision Sources: HIS Global Insight, ANGA, September 2009

5 Similarly, a wide range of equipment and materials is required for each natural gas well Exploration Production Processing Distribution Data recorders Drilling rigs Equipment rentals Truck transportation Drilling rigs Steel pipes and casing Cutting and machine tools Pumps Compressors Water and handling eqp. Proppants, sand, and ceramics Truck transportation Tanks Data recorders Turbine sets Power boilers Tanks Truck transportation Steel pipes and casing Compressors Tanks Truck transportation Steel pipes and casing Compressors Information compiled by ADI ANALYTICS LLC. ENERGY INSIGHT AND CONSULTING

6 Opportunities for Supply Chain Analysis During Drilling and Typical well uses between 4 and 5 million gallons of water during the drilling and fracturing process Trucked to site? (1000 truck loads/ well) Piped to site? Source(s) Tradeoffs Typical well uses approx tons of sand ( proppants ) that are pumped down with the water to hold open cracks/fissures in the shale. Trucked to site? (100+ loads/ well) Railed to strategic locations?

7 Opportunities for Supply Chain Analysis for Oil & Gas Industry Strategic locations for warehouses, staging locations, and just-in-time deliveries to remote sites Strategic planning of well drilling and shipment of materials from one site to the next Strategic consolidations, mergers or acquisitions to provide one-stop-shop for Tier 1 suppliers like Schlumberger and Halliburton who are carrying out the drilling operations

8 Marcellus Shale Coalition launches Marcellus on Main Street Initiative Pittsburgh Business Times Tuesday, March 6, 2012 The Marcellus Shale Coalition is rolling out an online business directory of small and medium-size firms that are or want to be part of the oil and gas supply chain.

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10 Shell Cracker Plant Decision Pennsylvania wins coveted $2B Shell cracker plant project Royal Dutch Shell has chosen Pennsylvania over other Marcellus Shale area states as the potential location for its $2-billion ethane cracker. The region's workforce and economy would benefit from the project, said Kathryn Klaber, president and executive director of the Marcellus Shale Coalition. About 10,000 construction jobs will be created. Pittsburgh Tribune-Review 3/15 Bloomberg News Shell May Build Chemical Plant Near Pittsburgh to Tap Gas By Jim Polson and Romy Varghese on March 15, 2012 Shell last year joined competitors including Dow Chemical Co. (DOW) and Chevron Phillips Chemical Co. in proposing an ethane cracker, which makes raw materials for plastic, that would take advantage of low gas prices relative to oil. The plant may also make polyethylene, the most widely used plastic, and mono- ethylene glycol, a raw material for polyester, to meet rising U.S. use, A study by the American Chemistry Council said the plant would create 10,000 permanent jobs in chemical and supplier industries. (Wall Street Journal / 0315)

11 What are the Natural Gas Natural-gas production wells in portions of the Marcellus Shale and Utica Shale Region (southwestern PA and Eastern Ohio) contain significant amounts of condensates or natural gas liquids (NGLs). These include: Ethane Propane Butane These NGLs are worth significantly more than the Methane, especially now with the suppressed natural gas price. Ethane can be catalytically cracked to form Ethylene which is a starting building block for many other key chemicals used to make plastics and other commodity chemicals The key is what industries will be spawned and where should they be located to use the NGLs and the ethylene (and other commodity chemicals) that will be produced?

12 Fall 2012 Shale Gas Utilization Conference in early planning Planning Two (2) Day Event: Day 1 Transportation Focused Supply Chain Issues: CNG and LNG Refueling Station Infrastructure key locations to get traction for vehicle conversions Day 2 Natural Gas Liquids Focus Potential Supply Chain Issues: End uses for the various liquids Liquids processing location(s) Location of spin out related businesses from cracker plant Tentative Dates: September Penn Stater