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Abu Dhabi, UAEWednesday 19 December 2018

Quicktake: gas sector terminology explained

With Adnoc signing two major gas deals in the first two days of Adipec, we explain industry jargon

An LNG carrier. Natural gas production and demand is set to soar. Bloomberg
An LNG carrier. Natural gas production and demand is set to soar. Bloomberg

Abu Dhabi National Oil Company on Monday signed an agreement with Saudi Aramco to jointly explore and invest in natural gas and liquefied natural gas opportunities. On Tuesday, Adnoc awarded a 25 per cent stake to Italy’s Eni in a multi-billion dollar sour gas concession. The two deals, signed during the Abu Dhabi International Petroleum Exhibition and Conference, are part of the emirate's plans to achieve gas self-sufficiency, broaden its revenue base and free up more crude for exports.

What is natural gas?

Natural gas is found deep beneath the earth's surface, mainly consisting of methane and is used as fuel, to fire power plants and in industries to make materials and chemicals. Earlier this month, Abu Dhabi announced it found 15 trillion cubic feet of gas in existing and untapped blocks. The discoveries would add 7.1 per cent to existing reserves of gas, which stood at around 209.7 trillion cubic feet at the end of 2017, according to the latest BP Statistical Review of World Energy. Bahrain, the Arabian Gulf’s smallest oil producer, in April said it found up to 20 trillion cubic feet of gas offshore.

What is LNG?

LNG stands for liquefied natural gas. Simply put, LNG is natural gas that has been cooled to a liquid state, at about -127 Celsius, for shipping and storage. The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state. This process makes it possible to transport gas mainly through large ships/tankers called LNG carriers that are equipped with onboard, super-cooled tanks, according to US Energy Information Administration. On arrival at the destination, LNG is warmed up and used for heating, cooking as well as electricity generation and other industrial purposes.

What is tight gas?

Tight gas commonly refers to deposits with low permeability of gas mainly through sandstones. The technology used to extract gas from sandstone formations is the same used to produce gas from carbonates and coal seams. The biggest challenge for the producers in tight gas reservoirs is to have accurate stimulations to produce enough gas volumes to make commercial sense.

What is sour gas?

Sour gas fields contain a high level of sulphur which needs to be extracted to produce gas for commercial consumption. Abu Dhabi has substantial reserves of sour gas and the emirate’s Supreme Petroleum Council approved a Dh486bn five-year capital expenditure plan that will help unlock its sour gas reserves.

What is condensate?

Condensate is a light hydrocarbon liquid produced with gas and which fetches a higher price than normal crude because it is easier to refine into by-products. It is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from gas fields.