Noble Energy plans first Colorado LNG facility
The Houston-based Noble Energy (Noble) announced to build and operate the first facility in Colorado, USA, to produce liquefied natural gas (LNG).
With a production capacity of only 100,000 gallons per day (approximately 60,000 tonnes per year), this Colorado LNG plant will rank among the smallest ones ever built and will process 8.5 million cubic feet per day (cf/d) of natural gas.
Noble purpose in this LNG project is economic and environmental as to supply a clean transportation fuel to trucks and rigs in the region.
Noble will use primarily this LNG to its own trucks and rigs in the nearby Weld County and DJ Basin.
Then Noble will supply other oil and gas producers in the region.
Noble is the largest oil and gas producer of the Denver-Julesburg Basin in the north of Denver and considering the low price of the gas in the USA, this resource appears highly attractive when compared with oil-based transportation fuels such as diesel.
In addition the natural gas used for transportation eliminates most of the solid micro-particles such as produced by diesel and gasoline and reduces significantly the emissions of carbon dioxide, nitrogen oxide and volatile organic compound.
Noble has estimated the Colorado LNG project to require $45 million capital expenditure, making the investment highly profitable in respect with the spread between gas price and oil price.
This LNG facility should be built in Keota, about 70 kilometers northeast of Greeley in Colorado, adjacent to a greenfield natural gas processing plant project previously announced and to supply the feedstock for the LNG plant.
This Keota gas processing facility will have a capacity of 30 million cf/d.
The total cost of the two facilities should reach $90 million capital expenditure.
This investment is part of the $10 billion program planned by Noble in Colorado over the next five years including $1.7 billion in 2013.
This Colorado LNG plant has been designed at front end engineering and design (FEED) stage, by the Denver office of the Houston-based Audubon Engineering.
Noble expects the Keota gas processing plant to start operations in 2014 and the LNG plant to follow in 2015.
Colorado LNG to upgrade Noble expertise for Leviathan
In addition to all the benefits mentioned above regarding the environmental and financial aspects of the Colorado LNG project, Noble will build up a unique expertise in leading LNG project and in taking operatorship role in the perspective of its giant Leviathan LNG project.
Located 135 kilometers west offshore Israel in the Mediterranean Sea, Leviathan is the largest project that Noble should decide to develop in 2013.
Lying by 1,700 meters of water depth, the Leviathan non-associated gas field is estimated to hold 17 trillion cubic feet of natural gas recoverable reserves..
In December 2012, Noble and its partners in Leviathan farmed-out 30% of their shares to Woodside Petroleum (Woodside) from Australia in order to bring in the team a large company with consistent LNG project and operations expertise.
According to the terms of the agreement, Woodside would become the operator in the case Leviathan would develop an LNG project.
As a result the partners in the Leviathan project stand as:
– Noble 30% to remain the upstream operator
– Woodside 30% to become the operator of any LNG development.
– Delek Group 30% with its units Avner Oil and Gas LP and Delek Drilling LP
– Ratio Oil 10%
Noble is planning to develop Leviathan in phases where the first two phases should be based on conventional floating, production, storage and offloading (FPSO) vessels as to supply Israel for its own consumption.
Next phases should be designed to export LNG, either with floating LNG (FLNG) vessel, either through export pipeline and Israel onshore LNG trains.
The first FPSO should be awarded this year to one of the current bidders BW Offshore, Modec, SBM Offshore and Technip.
It should have a processing capacity of 1.2 billion cf/d of natural gas.
The second FPSO should be significantly bigger with 1.7 billion cf/d capacity.
In parallel, Noble and Woodside are working on the pre-front end engineering and design (pre-FEED) of the Leviathan LNG solution with Daewoo Shipbuilding & Marine Engineering (DSME).
In this context of cooperation with experienced companies such as Woodside and DSME, the Colorado LNG project will give the opportunity to Noble to keep a leading role in the Leviathan LNG project.
