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Japan, US to test methane hydrate output at Prudhoe Bay, Alaska North Slope

Japan will run its first methane hydrate production test jointly with the U.S. on the Alaska North Slope following drilling works in 2020-2021, as the resource-poor country accelerates technological developments to commercialize output at home, the Ministry of Economy, Trade and Industry said Oct. 16.

The onshore methane hydrate production test will take place at the Prudhoe Bay unit from fiscal 2021-2022 from April to March for up to a year, after selecting an operator and subsequent drilling of production test and geo-data wells, Ministry of Economy, Trade and Industry, or METI, officials said. Methane hydrates are natural gas molecules trapped in lattice-like ice formations.

The production test, which follows the drilling of an initial test well within the Prudhoe Bay unit in December 2018, aims to collect data on production behavior as well as testing methane hydrate production technology.

The initial test well drilling, involving state-owned Japan Oil Gas and Metals National Corp., the U.S. Department of Energy's National Energy Technology Laboratory and the U.S. Geological Survey, confirmed the occurrence of methane hydrate at a location within the Prudhoe Bay unit.

For Japan, the onshore production test in Alaska is one of the country's key pillars to develop methane hydrate technology to start a pilot project led by the private sector over five years to fiscal 2027-2028 as part of the current government plan.

The development of methane hydrates also offers Japan a potential domestic source of energy free of geopolitical constraints amid increasing supply concerns after a series of events in the Middle East this year.

On the domestic front, Japan plans to run a series of offshore surveys including 3D seismic surveys in fiscal 2020-2021 to find methane hydrate concentrated zones in order to run test drillings in fiscal 2022-2023.

Although there are a number of technical barriers to methane hydrate production, such as achieving sufficient flow rates to reduce output costs, known resources could be large enough to meet Japan's demand for about 10 years, based on its confirmation of 40 Tcf of methane hydrate resources in place in the southern Sea of Kumano in 2007.

The nation has been pursuing research into this area for some time. The recently announced testing follows Japan's second series of production tests of methane hydrate offshore central Japan, in which the one well produced a total of 200,000 cubic meters of natural gas over 24 days in 2017. Japan had drilled the two production wells to reach layers containing methane hydrates about 300 meters below the seabed at a water depth of around 1,000 meters.

This was the second round of offshore methane hydrate production tests globally after Japan produced 120,000 cubic meters, or 20,000 cubic meters per day, of gas from methane hydrate at an earlier offshore production test at the Daini-Atsumi Knoll in March 2013. That first output test was stopped after six days it had been planned to run for two weeks because of an inflow of sand into the production well.

After the 2013 offshore production test, Japan adopted a decreasing pressure system for the second round of methane hydrate output tests in 2017. Researchers used sand control measures in the form of shape memory polymers in the two production wells and drilled two monitoring wells to record changes in temperatures and pressures in different seabed layers during the production test.

METI has requested a budget of ¥26.3 billion, or $242 million, for supporting surveys and developments of oil, natural gas and methane hydrate in Japanese waters in fiscal 2020-2021.

Takeo Kumagai is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.