Evaluating strategies for monetizing the natural gas supply in Brazil - the role of storage, liquid processing and conversion to hydrogen

Abstract

This thesis defines three strategies for monetizing natural gas reserves in Brazil and it is divided into three papers, two published and one submitted. In the first paper, submitted, Natural Gas processing options were assessed by comparing fuel or petrochemical options. A natural gas processing unit was designed using the open-source software “DWSIM” and a financial stochastic net present value was calculated. In the end a market crash evaluation was performed based on the main barriers in this field. The second paper, published, evaluates the cost-effectiveness of Underground gas storage facilities as strategy to monetize onshore natural gas resources. Gas pipelines were designed using the software Pipeline Studio by Emerson. The third paper, published, develops a strategy for transitioning from fossil fuels to hydrogen, based on the use of blue hydrogen produced in Steam methane reforming process. A global strategy applying natural gas production forecasts assessed potential hydrogen production and addressed a strategy for stimulating the hydrogen market using idle capacity and natural gas transport capacity. Findings show that the three strategies can be associated and produce positive results. Natural Gas Liquids strategy is feasible for both fuels and petrochemicals. The market crash test indicated sever restrictions for petrochemicals in Brazil, tough. UGS facilities are feasible options for developing the NG industry and offer costs and tariff reduction when designing pipelines and are relevant for hub formation. Finally blue hydrogen production seems possible when CO2 generated in Steam Methane Reforming facilities are used in Enhanced Oil Recovery. Although these strategies showed promising results, institutional conditions in Brazil have recently changed and need evaluation before considering investments.