Western States Coal Mine Methane Recovery and Use Workshop
Two Rivers Convention Center
Grand Junction, CO
April 19 - 20, 2005

Updated January 2009

Continued from Page 2

Project Considerations

The items below are factors for project development:

• Gas production rate
• Gas ownership and royalty payments
• State and other taxes
• Equipment site
• Well leases and approval requirements
• Gathering system and collection of gases
• Feed and product gas compression
• Power 
• Air permits
• Gas treatment – N2, CO2, H2S, O2, H2O
• Pipeline gas sales

These considerations can be simplified into gas production, gathering, processing and sales.  To generalize, many gas producers tend to drill and produce the gas, while desiring the sale of the gas at the wellhead and leaving the downstream activities to others.  The remaining items can involve gathering companies for collecting the gas (often including gas sales to the pipeline) and Engelhard / Guild for the supply of the Molecular Gate adsorption system.

Commercial scenarios that can be considered include the following:

1. Gas production, gathering and sales by the leaseholder who also purchases the Molecular Gate adsorption system. The scope of supply beyond the Molecular Gate unit itself can also include feed and product gas compression, turnkey installation and remote monitoring.
2. In addition to the above, a gathering company could be brought in to collect the gas from the wells and can also take title to the gas at the wellhead along with the responsibility for gas sales.  In general, the gathering company will be paid on the basis of gas collected.
3. Financing considerations where the Molecular Gate adsorption system is paid over time rather than purchased.
4. Percent of proceeds contracts where the Molecular Gate adsorption system plus compression is installed in exchange for a share of the sales gas revenue.
5. Percent of proceeds contracts can also include gathering companies to collect the gas for a share of the revenue.

The minimal flow rate for reasonable economics is approximately 0.5 MM SCFD.  This flow can be attractive for stand-alone projects, or can permit a level of cash flow, as a field is developed to provide larger flows.  Systems can often be debottlenecked, typically to twice the initial flow rate, by increasing the adsorbent volume.

The Molecular Gate adsorption system economics are most favorable for lower levels of impurities in the feed.  Lower impurity concentrations mean higher hydrocarbon concentrations and sales gas flows, require lower adsorbent quantities, have lower methane losses and result in lower capital and operating costs. 

In CO2 removal from coal bed methane, the feed and product compression mean a large fuel sink exists.  Thus, feeds that are relatively low in CO2, less than about 10%, are most attractive since the tail gas can be used as fuel and there is no loss of methane from the system.  In this application, the capital cost of the Molecular Gate adsorption system will generally be similar to that of an amine plant for smaller flows, while having operational advantages.  For larger flows, the Molecular Gate adsorption system offers savings in the 20% range as compared to amine plus glycol systems.

For N2 removal from GOB or abandoned coal mines the economics can be favorable even at small flows of 0.5 MM SCFD where the nitrogen is less than about 30%.  In addressing the nitrogen in the feed, it is also important to recognize that the system will remove CO2 and a portion of any oxygen in the feed without separate processing. 

Summary

In addition to the growth of interest in coal bed methane, gas production from GOB gas and coal mine methane is growing. The need for the removal of nitrogen, carbon dioxide, oxygen and water, along with a large fuel demand using tail gas as fuel, is also on the rise.  These dynamics present an ideal fit for the skid-mounted, expandable, unattended operation of the Molecular Gate adsorption system.

Download Article