Natural Gas Dynamics - Mod 2

Gas Exploration,
Production and
Unconventional
Gas
Natural Gas Dynamics
Module 2
Vivek Chandra
vchandra@natgas.info
www.natgas.info
www.naturalgasdynamics.com
v1202 Copyright held by author copying multiple slides prohibited
2
Gas exploration
Exploration methods for both gas and oil are very similar
Exploration is based on principles of Geology and Geophysics
Prior to these methods, oil and gas usually found by surface indications such
as seeps and gas releases
Exploration Chronology
Regional geologic surveys
Based on gravity and other large scale, low resolution surveys to
identify large structures
Focused mapping and modeling
Based on detailed seismic surveys to model the possible hydrocarbon
system and identify source, reservoir, trap and seal
Exploration Drilling
To confirm rock and fluid structure by driling and wireline (well-logs)
data
3
Focus mapping: Seismic
Energy waves are sent into the ground and their reflections and strength
measured by sensors
Reflected waves influenced by density and thickness of rock layers
allowing calculations of depth of rock layers
Data collected and processed to produce virtual cross-sections of the
earth
4
Onshore and offshore seismic
5
Seismic data processing
6
Seismic technology has improved ..
Onshore field in United States
Better technology and computing power can add potential to old fields
7
Well log data
Wells are drilled to collect subsurface data
Data collected by sophisticated tools lowered
into well, measuring electrical, nuclear,
sonic, and pressure data
Data can be matched with Seismic data to
give accurate depth matching
8
Gas production at surface
Gas and other fluids from well
(Oil, Water, NGLs, etc)
channeled into smaller pipe
called tubing.
There may be multiple tubings
in well, producing from different
depths
On surface, fluids pass through
a valve system (Christmas Tree)
and then to surface processing
facilities for separation and
further processing
Unconventional Gas
9 Source: EIA 2011
Unconventional gas
10
Growth of unconventional gas has reversed decades of declining gas
reserves in North America
Source: Bank of America Merrill Lynch Shale Gas: Present & Future presentation February 2009
Magnitude of unconventionals is huge
11 Source: ConocoPhillips presentation Gas Resource Plays New Frontiers APPEA June 2009
Unconventional gas will dominate US
supply
12 Source: FACTS FGE presentation: Unconventional Gas: Implications for the Global LNG Market , LNGA, March 2012
In 2035, ~80% unconventional
In 2008, shale
gas accounted
for 30% of total
US gas
discoveries,
rising to over
60% in 2011
predictions of
75% by 2015
and 80% by
2030
Unconventional impact will be global (1)
13
Source: ExxonMobil The Outlook For Energy View to 2040 ; 2012
Global extent of unconventional gas(2)
14
Source: Graph from TriZen report Impact of Unconventional Gas 2011. Text from Bernstein Research How unconventional gas fits into
the gas market , Finding Petroleum Conference April 2010
15 Source: Daiwa Capital Markets report The New Energy Primer September 2011
Global distribution of unconventional
gas (3)
Unconventionals will change
production rankings
16 Source: IEA World Energy Outlook Golden Rules for a Golden Age of Gas 2012
Coal seam methane (CSM)
Coal seam methane (also called CBM coal bed methane or CSG coal
seam gas) is methane, produced during the creation of coal from peat.
It is mostly methane gas held in place on surface of coal by water
pressure.
Water pressure must be reduce to allow methane to flow from the coal.
The amount of gas present in a coal seam depends on the depth and
thickness of the seam and the coal constituency and flow rates depend
on the permeability of the coal.
Coal seam methane refers to the source of the gas but, once produced,
it is otherwise indistinguishable from conventional natural gas methane.
In contrast with natural gas sources:
Coals seam wells often have lower gas flows;
Wells to extract coal seam gas are generally shallower (300 m - 1,000 m);
Coal seam gas processing plants are less complex since the gas has less
impurities or NGLs or CO
2
17
Not all coal contains CSM
18 Source: NRLC Coalbed Methane Conference April 2002 William T Brown
The coal must have the correct composition to encourage methane production,
and must also contain fractures (or cracks) in the coal seam to allow methane
to flow to the well bore
CSM production profile
19
CSM well diagram : moving water to get gas
20
Large amounts of water are usually
produced to release methane
molecules from coal face
Disposal of water is a major issue with
CSM development
Number of wells required for CSM
production significantly larger than
that for conventional fields, but wells
are generally less deep
For GLNG, a LNG project based on
Australian CSM gas, the first 3 MTA
train would require gas from 500 wells
+ further 800 wells over the 20 year
life of the field to produce 5 tcf. By
contrast, a conventional LNG project
such as Pluto needs only 5-6 wells to
produce the same amount of gas
Salinity of water from CSM production
21
Water must be disposed (by
pumping back in ground, or
left in surface ponds, or must
be treated prior to use
CSM development mindset
22 Source: Santos presentation CSG to LNG A world first APPEA June09
CBM to LNG will require enormous number
of wells
23 Source: APLNG Project Overview, Origin Energy, September 2011
300 to 500 wells
required every year !
How do they
estimate the future
cost of this ?
So far, it seems that
the results are not
encouraging..
Calorific value of CBM is much lower
24 Source: Arrow Energy presentation : Asian LNG : Feb 2010
CSM vs. conventional development
Conventional Gas Coal Seam Methane
Reservoir Typically carbonate or
sandstone where gas is stored in
pores between rock grains.
Average depth > 1,500 meters
Methane absorbed on surface of coal,
which is both the source and the
reservoir for the gas. Typical reservoirs
400 900 meters deep
Gas
composition
Typically, natural gas will
contain methane + NGL + some
impurities
Very dry methane with no NGL or
impurities
Exploration Expensive, technically
sophisticated process based on
high risk / high reward
Based primarily on simple drilling and
coring, often leveraging on coal mining
data
Production Quick ramp-up, high production
rates per well possible. Limited
water production during early
phase
Dewatering required prior to production,
peak production may take long time to
achieve, limited production per well,
quick decline possible
Reserves
Certification
Usually done during exploration
/ evaluation phase using data
from relatively few wells
Majority of reserves certified during
production phase, typically using data
from large number of wells.
25 Source: Based on Citibank QGC Report September 2008 and author analysis
CSM production to grow worldwide
26 Source: ConocoPhillips presentation Gas Resource Plays New Frontiers APPEA June 2009
CSM observations
CSM is already playing a very important role in gas production in certain
regions of the world
In the US, 8% of all onshore gas is produced from CSM and 20% of
Eastern Australian gas is coming from CSM
CSM reserves, if believed, are enormous (100s of tcf in Eastern
Australia) but it is still not clear if production can be low cost
LNG from CSM can be supported as long as LNG prices stay high.
However, challenges remain :
Drilling results are not always consistent
Ongoing well drilling requirement is a wildcard as costs - difficult to estimate
over 20 yrs
Water disposal a growing issue
Rising labor costs
Large LNG companies (Shell, BG, ConocoPhillips. Petronas) are
betting that CSM will be a viable feed for future LNG projects and
thus partnering with local companies. I am not convinced as yet..
27
Shale gas
Shale gas is now becoming a true game-changer in the
industry, especially in the US
Massive reserves some estimates are 750 2000 Tcf in North
America alone
Today, shale gas accounts for around 5 bcf/d (out of total around 23
bcf/d). In 2005, the entire industry barely existed! Maybe 50% of
production in 10 years as conventional gas reserves decline
Although difficult to extract, the gas may contain
significant NGLs
Producing gas from a rock with ultralow permeability
significant porosity required new efficient technology
Production growth coincided with horizontal well technology, and
improvement in hydraulic fracturing skills & materials greatest
achievements in last decade!
28
How the world has changed !
29
What we knew 25 years ago
What we now know
Source: ConocoPhillips presentation Gas Resource Plays New Frontiers APPEA June 2009
Permeability Comparisons
30
As compared to conventional gas reservoirs, permeability in Shale and Tight
gas is very low - Much lower than cement !
Source: Wilson HTM Equities Research Australian Shale Gas Sector Report July 2011
Shale gas drilling in US
31
Source: Citibank report Shale Gas a game changer for chemical industry March 2010
Complicated logistics for shale gas
32
Trucks
filled
with
sand
Frac
pump
trucks
Source: Canadian Energy Research Institute : Shale Gas Plays in North America , February 2011
Total
capex for
one full
crew
could be
~$40-50
MM and
require
50 crew
members
Production per well can decline quickly
33
Typically, shale
gas wells
deliver 25% of
ultimate
potential in
first year, and
50% within
four years
but even in a
small area,
results can
vary
significantly
Operators are getting more efficient...
34
Break even prices keeping in-line with lower gas prices
plentiful supply will keep US prices low for a while
Shale gas can be competitive with
conventional gas
35
Source: WoodMac Energy Seminar: North America Shale Gas, May2010
Onshore Canada
....especially if the gas has NGLs
36
Generally drier gas (with less liquids !)
Source: Credit Suisse Global Gas Report November 2011
North American shale gas resource is
huge
37 Source: Wilson HTM Equities Research Australian Shale Gas Sector Report July 2011
EIA estimates
technically
recoverable
resource =
862 Tcf
(Conventional
resource =
2,543 Tcf)
Marcellus could be the 2
nd
largest gas field in the world !
38
According to Chesapeake Energy, US Shale gas fields have recoverable reserves
that would rank three of them in the top six gas fields in the world
Source: Wilson HTM Equities Research Australian Shale Gas Sector Report July 2011
Shale gas in US is truly a game-changer
39 Source: ConocoPhillips :The Bright Future of Natural Gas June 2010
Global shale gas numbers from EIA
40 Source: FACTS FGE presentation: Unconventional Gas: Implications for the Global LNG Market , LNGA, March 2012
Chinas potential could be larger than US
Can the US shale gas experience be repeated globally ?
Five factors that were key influencing elements for shale
gas growth in the U.S
Limited gas reserves driving increased prices.
Technological advances in horizontal drilling and
fracturing techniques
Nimble independent exploration and production
companies, working with service providers to advance
conventional technologies into unconventional gas
Availability of capital.
Relatively easy access to land, fueled by the private
ownership of surface and mineral rights and industry-
friendly regulations.
41
Source: Deloitte: Natural Gas Revolution or evolution? - 2011
Shale gas development challenging
outside US
42 Source: Wood Mac presentation North American Shale: Global Gas Markets April 2011
43
Source:International Gas Union presentation The Transformation of Global Gas Markets: New Dynamics and Commercial Drivers,Oct 2011
Even with challenges, unconventionals cant be
ignored
44
Questions ?
Vivek Chandra
vchandra@natgas.info
www.natgas.info
www.naturalgasdynamics.com
v1202
Copyright held by author
copying multiple slides
prohibited

Natural Gas Dynamics - Mod 2

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Natural Gas Dynamics - Mod 2

Transféré par

Droits d'auteur :

Formats disponibles

Gas Exploration,

Vous aimerez peut-être aussi