Monetizing stranded gas : economic valuation of GTL and LNG projects
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Globally, there are significant quantities of natural gas reserves that lie economically or physically stranded from markets. Options to monetize such reserves include Gas to Liquids (GTL) and Liquefied Natural Gas (LNG) technologies. GTL is a unique monetization option that brings natural gas products to crude oil markets. This technology is commercially immature, appears to have attractive market potential, requires substantial capital investments, and has uncertain operating costs and revenue generation. LNG is a more established monetization option. Project economics for the two technologies are reviewed, as well as literature evaluating such for either or both. Discounted cash flow models are studied for two project scenarios, and results are discussed and compared. The modeling effort seeks to inform the decision to invest in GTL or LNG for the monetization of a stranded gas reserve.