Commercial production from gas-hydrate accumulations will be realized in five to 10 years, according to Art Johnson, president of Kenner, Louisiana-based Hydrate Energy International.

"Limited production will occur even sooner," he told attendees at Hart Energy Publishing LP's second annual Developing Unconventional Gas conference in Fort Worth recently.

Key challenges researchers face are developing rubrics to identify and quantify prospects, including evaluation of appropriate pressure and temperature conditions, reservoir qualities and gas flux. Work needs to be done on production technology and transportation of produced gas from remote areas, he said. However, existing technology can be leveraged and new technology is rapidly emerging.

Furthermore, although developing gas hydrates is expensive, costs are not prohibitive, he said. Global activity is strong, with the U.S., Japan, India, Canada, China, Korea, Mexico, Chile and Ireland involved in programs and research. This year, China and South Korea have hydrate drilling programs planned, and seismic surveys are currently being shot specifically to assess hydrate potential.

BP has just drilled a well on Alaska's North Slope that encountered a very high percentage of hydrates, he added. The Mount Elbert prospect well is expected to verify the nature of one of 12 gas-hydrate accumulations within the Milne Point unit of the Prudhoe Bay region.

The project is a joint effort of BP, the Office of Fossil Energy's National Energy Technology Laboratory, the USGS, the Alaska native-owned Arctic Slope Regional Corp., the universities of Arizona and Alaska (Fairbanks), and others.

Japan, which drilled 32 wells in 2004, plans an Arctic production test this year with Canada. The two nations will extend testing into 2008. India, which drilled 39 hydrate wells in 2006, also plans production tests next year.

And, contrary to some industry perceptions, the Gulf of Mexico has all the components needed for commercial gas-hydrate prospects. Site selection is in progress for a multi-well drilling program by a consortium in the Gulf, and that program may kick off this year. (For more on this topic, see "Gas Hydrate," Oil and Gas Investor, January 2007.)

Deepwater leaseholders should take their hydrate resources into account, he added, as these resources will eventually be included in Minerals Management Service bid assessments.

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