A conceptual cost minimization model for estimating methane hydrate upstream activity in NEA for policy-making

Methane hydrates are present in substantial quantities in Northeast Asia and have the potential to disrupt global energy markets once economical extraction methods are identified and developed. Any Northeast Asian country that is able to exploit its methane hydrate resources will potentially alter its need for hydrocarbon imports. This would greatly impact future energy trade relations between Northeast Asia and Organization of the Petroleum Exporting Countries participants and could result in a shift from a broader bilateral energy trade relationship into a narrow one. Demand would decrease and hydrocarbon price fluctuations would affect revenue streams as well as international trade partnerships. In this study, we attempt to present a conceptual operational research cost model for methane hydrate integration into the energy mix in the Northeast Asian countries. Our approach takes into account key parameters including the volume of estimated reserves to minimize the cost per unit of methane hydrate in upstream processes while considering natural gas accounting as a reference point, in a reservoir dynamics-based analysis under market constraints. Finally, we propose policy recommendation based on our analysis. Key-Words: Gas hydrates, North East Asia, Activity report, Trade partnerships, Price breakdown, Policy recommendations.