csg field development overview – engineers australia · 2017. 5. 19. · nsw government before...

$: CSG Field Development Overview – Engineers Australia · 2017. 5. 19. · NSW Government before fracturing activities can commence › The FSMP should identify all relevant issues$
CSG Field Development Overview – Engineers AustraliaMike Roy | Head of Operations | 10 July 2012 | AGL External

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› The Australian Gas Light Company (AGLC) was formed in Sydney in1837. It was the second company to be listed on the stock exchange andturns 175 this year.

› 2,500+ employees across AGL Energy, ~150 employees in AGL UpstreamGas

› 3.4 million customer accounts across NSW, SA, VIC and QLD

› 64% of AGL’s installed capacity is low (gas fired) or zero emission

› Ownership of Upstream assets across QLD and NSW with a mixture ofconventional oilfield and CSG assets (predominantly CSG)

AGL key facts

» CSG Overview – Engineers Australia CPD Event

» 10 July 2012

» AGL External

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Gas Storage

› Silver Springs Underground

› Newcastle Facility

Petroleum Assets

› Camden CSG

› Gloucester CSG

› Hunter CSG

› Galilee CSG

› Silver Springs Conventional

› Cooper Eromanga Oil

Upstream Gas Assets


» 10 July 2012

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Camden key facts

› 143 wells drilled

› 89 producing wells connected to RPGP

› Gas production rate of 15 to 17.4TJ/day

› +265,000 domestic customers

› 100 kms of poly pipe gas gathering line

› Approximately 70 full time employees and contractors in theMacarthur region

› 45% of suppliers are locally based businesses

The Camden Gas Project has been producing Coal Seam Gas (CSG)since 2001, and is currently supplying around 5% of the NSW gasmarket .Data as at July 2012» CSG Overview – Engineers Australia CPD Event

» 10 July 2012

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Why does AGL invest in CSG?

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Eastern Australia gas demand

Source: AGL estimates

› Gladstone CSG to LNG projects will have a radical effect on gas demand

» Up to 8 LNG trains planned

» Gas demand could increase by about 250%

» Up to 6 more trains proposed

› Additional small-scale LNG projects possible

› Independent consultants are warning that:

» NSW is highly exposed to interstate gas supplies

» NSW consumers are likely to pay the price of delays to local CSG developments

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Historicaldomestic

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+Firm LNGcontracts6 trains

+2 moreLNG trains

Domesticcontracts


» 10 July 2012

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AGL’s strategic target: self-supply 100PJ/annum

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aAGL Long-term Gas Supply Contracts

Equity gas projects and new contracts to

meet demand


» 10 July 2012

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What is CSG?

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What is CSG?› Mainly methane (CH4), a

naturally occurring gas

› Produced from ancient organic matter and trapped in the small cracks or ‘cleats’ of coal seams

› Held in the cleats by water that saturates the coal seam

› About a third of eastern Australia’s natural gas is already sourced from CSG:

» In QLD it’s nearly 100%

» AGL’s CSG supplies around 5% of NSW’s gas requirements

Face Cleats

Butt Cleats

Typical coal cleats


» 10 July 2012

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Producing CSG operators must comply with:

› NSW Environmental Planning and Assessment (EP&A) Act 1979

› NSW Petroleum (Onshore) Act 1991

› Commonwealth Environment Protection and Biodiversity Conservation (EPBC) Act 1999

› NSW Protection of the Environment Operations (POEO) Act 1997

› NSW Water Management Act 2000 /Water Act 1912

› Rigid Environmental Assessment process including additional new REF requirements

› Commonwealth Independent Expert Scientific Committee (IESC) - $150m for scientific studies into the CSG industry


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PLUS evolving regulations and policy:› NSW CSG strategy

› Strategic Regional Land Use Plan

› Draft Codes of Practice Well Integrity

› Draft Codes of Practice Well Fracturing

› EPA Pollution Reduction Program

› Draft Aquifer Interference Policy

› Draft Codes of Practice for CSG Exploration

› Guideline for Community Consultation Requirements for Coal & CSG Exploration

› Guideline for Agricultural Impact Statements


» 10 July 2012

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Codes of Practice New South Wales

› Developed by the NSW Government in consultation with stakeholders

› Designed to ensure drilling standards, well integrity and fracture stimulation activities are conducted in a safe manner and that communities, the environment and groundwater resources are protected

› Sets out:

» principles, values, standards

» rules of behaviour

» procedures

» systems that contributes to achieving desired outcomes.

› Used by the NSW regulator to govern the activities of the CSG Operator


» 10 July 2012

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Codes of Practice NSW well integrityEnsures:

› Safety and Environment risks are identified and risk mitigation implemented

› Good industry practice

» Engineering design basis – Oil & Gas Standards (API)

» Data recording all critical information

» Laboratory testing for cement slurries

» Casing specifications and pressure testing

» Geological reports

» Wireline logs etc


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Ensures:

› An approved Fracture stimulation Management Plan (FSMP) approved by the NSW Government before fracturing activities can commence

› The FSMP should identify all relevant issues associated with the fracture stimulation activity and demonstrate how these will be managed to ensure that residual risks to the environment, community and workforce are reduced to acceptable levels

› Numerous mandatory requirements such as:

» Risk assessments associated with fracture stimulation activity, likelihood and consequence of each risk Chemical use (surface spills, injected chemicals and impact on

potential beneficial target aquifers or any other aquifer Land contamination Public safety Management of flowback water Fracture diagnostics

Codes of Practice NSW fracture stimulation


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AGL’s CSG operations?

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The construction of a well includes:

› A level ‘pad’

› Small drill cuttings area

› Access roads

› Compound fencing

› Environmental controls - silt fencing, sound monitoring, lighting, specific landowner conditions

Construction


» 10 July 2012

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CSG extractionCSG is released by:

› Drilling into the coal seam

› Cementing steel casing and

tubing into the drill hole

(‘completion’)

› Stimulating the coal seam: Horizontal drilling or hydraulic

fracturing

› Pumping out the water from the

coal seam (‘dewatering’)

› Releasing water depressurises

the coal seam and allows the

gas to flow out of the well AGL’s Ensign 67 Rig


» 10 July 2012

» AGL External

http://thegrid.agl.com.au/about/AGL Image Library/Gas and Upstream/Camden Gas Plant.jpg�

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Camden geologyCamden:

› Triassic sandstones are the aquifers

› One (upper) sandstone aquifer (isolated)

› Minor sandstone aquifers at depth (isolated)

› Shallow (very limited extent) alluvial aquifer

› No natural connection between sandstone aquifers, and between aquifers & coal seams

NOTE Water salinity is typically measured as the concentration of total dissolved solids (TDS)

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Water management: Groundwater

Aquifers

› AGL’s staged approach to groundwater:

» Desktop study

» Detailed groundwater investigation

» Modelling

» Monitoring program

» Ongoing updates

Water management activities at Gloucester


» 10 July 2012

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CSG produced water volumesProduced water volumes are a function of:

› Geology (rock type and permeability)

› Proximity to shallow aquifers and recharge areas

› Degree of confinement/isolation

Produced waters are small for NSW (coastal) Permian Basins:

› Camden (~90 wells operational -mature)

» Currently less than 3 ML pa

› Hunter (2 wells - exploration)» Programs in recent years < 1 ML pa

› Gloucester (~15 wells: exploration, awaiting development)

» Programs in recent years < 4 ML pa

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Total Field Produced Water Volumes


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› Average vertical depth is about

800 metres

› Drilling and completion takes 7-

10 days

› No connectivity between the well

and the surrounding aquifers

› Fracturing of coal seams is

required to enhance coal seam

water and gas production

AGL vertical well design


» 10 July 2012

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22CSG well integrity cross-section

Sucker Rod

Centraliser

Production Tubing

Production Casing

Surface Casing

Cement

Cement

› AGL follows Oil & Gas Standards using API casing and wellheads

› There are 4 barriers of protection down to 120 m below the surface

› Wells are pressure cemented to protect aquifers

› Cement is brought back to surface on surface and production casing

› Cement bond logs to confirm zonal isolation and cement quality

› Well integrity is not only important to protect shallow ground water aquifers but also to ensure zonalisolation across coal seams


» 10 July 2012

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Perforations

Cross section of perforation interval

Example of steel casing that has been perforated

Establishes communication between casing and the reservoir


» 10 July 2012

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› Is one method of stimulating the flow of gas

› Only vertical wells are fractured

› Process:» Fluid pumped into a formation

pushes open natural cleats

» Sand is pumped in to hold the ‘frac’ open

» End result: a highly conductive path for CSG to flow into the well and come to the surface

› Operation takes about 2 -3 days

› Frac fluid is typically 98.5% sand and water

› No BTEX chemicals used in frac fluids

Fracturing CSG wells

AGL fracturing operation in Gloucester


» 10 July 2012

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This is NOT a CSG frac:

Shale fracturing operation in Canada


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Additives used in fracturing› Fracturing fluids are selected based on key reservoir

properties

› AGL does not use BTEX additives, these additives serve no purpose for CSG wells

› Typical fracture fluids that may be used in CSG wells are:

» Water (viscosity of 1 cP);

» Linear gel (low viscosity, typically 12-20 cP);

» Crosslink gel (high viscosity, typically 200-1000 cP); and or foam nitrogen and water (mid-range viscosity; the foam assists with sand placement and assists with post fracture well cleanup

› Chemical additives may be used in hydraulic fracturing to ensure the CSG formation is effectively treated

› All fracture chemicals and constituents have undergone an independent Human Health and Ecological Risk Assessment for approval by EPA NSW


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(pods) (seeds) (pulp) (endosperm) (powder)

Guar

Derivates:

HPG

CMG

Double Derivate:

CMHPG

(LGC)

Gelling agent


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› Water

› Sand

› Gelling agents (viscosifiers)

› Crosslinkers (contingent)

› Buffers

› Breakers

› Microbiocides


» 10 July 2012

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Additives used in fracturing

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Fracture (view from mineback)


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Horizontal well design› Can also drill

horizontally in seam for up to 2,000 metres

› Drilling and completion takes 3-4 weeks

› No connectivity between the well and the surrounding aquifers

› All wells steel cased and cemented

› 30 horizontal wells drilled in Camden to date

› Pad drilling: as many as 6 wells per location

12-1/4” OH to 120m

8-1/2” OH to ~800m TVD

6-1/4” OH to ~3000m MD

6 1/4” OH sidetracks to access

any stranded reserves

Bulli

Balgownie

9-5/8” surface casing

7” production casing


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The realityCSG extraction requires depressurisation/dewatering of coal seams, and the real

issues are:

› Knowing geological and hydrogeological settings

› Understanding connectivity and possible impacts on water resources (both surface water and groundwater)

› Having a defensible conceptual model of different groundwater systems (and recharge, discharge and flow processes)

› Having good monitoring networks, sufficient baseline data and good predictive modelling tools

› Ensuring well integrity, and plug and abandonment completions – new CoP

› Knowing when fracture stimulation is required and applying it appropriately – new CoP

› Monitoring the chemicals being used in fracture stimulation

› Monitoring fracture mapping geometry – temp logs, sonic logs, microseismicmonitoring

› Developing sustainable options for produced water


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Minimal footprint after initial drilling› Coexists with agricultural

land uses

› Producing well enclosure is 6 x 6 metres plus access track

› Spacing typically 600 metres apart – vertical wells

› Spacing typically 1 to 2km – horizontal wells

› Life of well about 15 years

› Land is fully rehabilitated at life end

Camden enclosed well


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Well enclosure and components of a CSG well

Level Switch

Variable Choke

Safety Slam Shut Valve

Gauge and Safety Pressure

Sensor

Master Valve

Wellhead

PLC, RTU Control and Telemetry located outside back wall

Solar Panel

Flow Computer

Water/Gas Separator


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› Site selection minimises visual impact and noise on local community

› CSG is processed for sale into the natural gas supply network:

» Compressed

» Dehydrated

» Odorised

Central processing

Rosalind Park Gas Plant, Camden


» 10 July 2012

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» Presentation Title

» February 2008

» AGL Internal

Questions?

csg field development overview – engineers australia · 2017. 5. 19. · nsw government before...

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