A Techno-Economic Analysis of Natural Gas Valuation in the Amazon Region to Increase the Liquefied Petroleum Gas (LPG) Production in Ecuador

Darwin Ortiz, Damián Calderón, Alfredo Viloria and Marvin Ricaurte ()
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Darwin Ortiz: Grupo de Investigación Aplicada en Materiales y Procesos (GIAMP), School of Chemical Sciences and Engineering, Yachay Tech University, Hacienda San José s/n y Proyecto Yachay, Urcuquí 100119, Ecuador
Damián Calderón: Grupo de Investigación Aplicada en Materiales y Procesos (GIAMP), School of Chemical Sciences and Engineering, Yachay Tech University, Hacienda San José s/n y Proyecto Yachay, Urcuquí 100119, Ecuador
Alfredo Viloria: Grupo de Investigación Aplicada en Materiales y Procesos (GIAMP), School of Chemical Sciences and Engineering, Yachay Tech University, Hacienda San José s/n y Proyecto Yachay, Urcuquí 100119, Ecuador
Marvin Ricaurte: Grupo de Investigación Aplicada en Materiales y Procesos (GIAMP), School of Chemical Sciences and Engineering, Yachay Tech University, Hacienda San José s/n y Proyecto Yachay, Urcuquí 100119, Ecuador

Resources, 2023, vol. 12, issue 8, 1-21

Abstract: Liquefied petroleum gas (LPG) is a C 3 /C 4 ’s hydrocarbon mixture used as fuel gas, obtained through natural gas processing or crude oil refining. The Ecuadorian LPG production (~1.88 MMbbl/year) comes from the Shushufindi gas plant and the Esmeraldas refinery. However, LPG production cannot meet the Ecuadorian market demand, and over 90% of this commodity is imported. At the same time, the natural gas produced in the Amazon region is not fully valued. A significant quantity of the associated gas is flared (~100 MMscfd), representing wasted energy with a significant environmental impact. Therefore, this study aimed to develop a technical and economic assessment of the potential natural gas valuation in the Amazon region to increase LPG production. The study started with a detailed review of the associated gas produced in the Amazon region. The data were analyzed considering the geographic location of the hydrocarbon fields, molar composition, flowrates, and operational conditions. Then, a natural gas value chain visualization was proposed and technically analyzed. Finally, an economic feasibility (class V) study was conducted, considering a preliminary analysis of capital expenditure (CAPEX) and an economic balance. The outcome of this study showed that by processing 21.50 MMscfd of associated gas from the Sacha field, domestic LPG production could increase by 30.9%. The required infrastructure consists of conventional processes for natural gas processing, with an estimated CAPEX of 36.6 MMUSD. Furthermore, despite the domestic subsidies of commodities, the potential savings for the country would be 32.13 MMUSD/year, an alternative more economically viable than the current LPG imports. Thus, the investment cost will be justified.

Keywords: Amazon region; associated gas; Ecuador; gas flaring; liquefied petroleum gas; natural gas (search for similar items in EconPapers)
JEL-codes: Q1 Q2 Q3 Q4 Q5 (search for similar items in EconPapers)
Date: 2023
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