CO2 EOR – Quite a Story · 12/1/2012 · EOR Technologies were brought forward • CO. 2 ,...
Transcript of CO2 EOR – Quite a Story · 12/1/2012 · EOR Technologies were brought forward • CO. 2 ,...
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CO2 EOR – Quite a Story…and a couple of tall tales
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0100200300400500600700800
1988 1992 1996 2000 2004 2008
C O 2 O ther G as C hem ica l T herm al
US EOR Production - CO2 is playing a greater role
Reference: O&GJ
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CO2 Source and Transportation Business has doubled in size since 2003
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1985 1990 1995 2000 2005 2010
Permian Basin
WyomingMississippi
N. Dakota(MMcf/d)
__________________________Sources: KM estimates, Oil and Gas Journal, EIA, XOM, Dakota Gasification, DRI
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50,000
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1970 1972 1974 1976 1978 1980
Oil Production Mb/dProved Oil Reserves MMB
Domestic crude production peaked October 1970
• Production replacement ratio >1.0 became essential
• Production from large oil fields were declining
• Large Fields became the focus of Technology Development
That Seventies Show
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College Days – The Missouri School of Mines
Who would have thought…
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The time: 2:30 PM
The date: Wednesday April 20, 1977
The Class: Petr Eng 417 Recovery Methods
The Instructor: Dr. Len Koederitz
The Conclusion: 1. CO2 EOR was what I
wanted to do!
A pivotal moment in time
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The time: 2:30 PM
The date: Wednesday April 20, 1977
The Class: Petr Eng 417 Recovery Methods
The Instructor: Dr. Len Koederitz
The Conclusion: 1. CO2 EOR was what I
wanted to do!2. CO2 price of $1.00-
2.00/mcf was reasonable
A pivotal moment in time
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Supply/Demand Studies• EOR screening tools
developed• By-product supplies were
insufficient• Exploration efforts
commenced
Source Fields were identified and tested
• McElmo Dome, Doe Canyon
• Sheep Mountain• Bravo Dome• Jackson Dome
Perspectives from the 70’s – Source and Pipeline
Jackson Dome: 6 Tcf
Bravo Dome: 8 Tcf
Sheep Mtn: 1 TcfMcElmo, Doe: 30+ Tcf
Permian Basin : 20+ Tcf Gulf Coast Region :
2- 6 Tcf
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Pipeline concepts were evaluated
• Sizing, Quality Specs, Operating Specs
• Commercial Structures, Tariffs
• Regulatory impacts
By the end of the decade
• Sources had been found• Development plans were
underway• CRC Pipeline began
deliveries 4/71
Perspectives from the 70’s – Source and Pipeline
Jackson Dome: 6 Tcf
Bravo Dome: 8 Tcf
Sheep Mtn: 1 TcfMcElmo, Doe: 30+ Tcf
Permian Basin : 20+ Tcf Gulf Coast Region
:2- 6 Tcf
Jackson Dome: 6 Tcf
Bravo Dome: 8 Tcf
Sheep Mtn: 1 TcfMcElmo, Doe: 30+ Tcf
Permian Basin : 20+ Tcf Gulf Coast Region :
2- 6 Tcf
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EOR Technologies were brought forward
• CO2 , Thermal, Gas, Chemical
R&D spending focused on technologies applicable to large oil fields
• Pilot Testing• Sorw• Phase Behavior• Reservoir Modeling, Core Floods, 3-phase Kr• Metalurgy and Elastomer Selection
Sacroc and North Cross commence 4/71
Perspectives from the ’70s – EOR Field
Denver Unit CO2 Pilot
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Perspectives from the ’70s – EOR Field
EOR Technologies were brought forward
• CO2, Thermal, Gas, Chemical
R&D spending focused on technologies applicable to large oil fields
• Pilot Testing• Sorw• Phase Behavior• Reservoir Modeling, Core Floods, 3-phase Kr• Metalurgy and Elastomer Selection
Sacroc and North Cross commence 4/71
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Perspectives from the ’70s – EOR Field
EOR Technologies were brought forward
• CO2, Thermal, Gas, Chemical
R&D spending focused on technologies applicable to large oil fields
• Pilot Testing• Sorw• Phase Behavior• Reservoir Modeling, Core Floods, 3-phase Kr• Metalurgy and Elastomer Selection
Sacroc and North Cross commence 4/71
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Perspectives from the ’70s – EOR Field
EOR Technologies were brought forward
• CO2, Thermal, Gas, Chemical
R&D spending focused on technologies applicable to large oil fields
• Pilot Testing• Sorw• Phase Behavior• Reservoir Modeling, Core Floods, 3-phase Kr
• Metalurgy and Elastomer Selection
Sacroc and North Cross commence 4/71
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Perspectives from the ’70s – EOR Field
EOR Technologies were brought forward
• CO2, Thermal, Gas, Chemical
R&D spending focused on technologies applicable to large oil fields
• Pilot Testing• Sorw• Phase Behavior• Reservoir Modeling, Core Floods, 3-phase Kr• Metalurgy and Elastomer Selection
Sacroc and North Cross commence 4/71
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The ’80s
$0 $20 $40 $60 $80
$100 $120
1970 1980 1990 2000
Oil Prices - Historical and Projected
With high oil prices expectations; the major infrastructure and project work began.
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Source Field Developments
•McElmo Dome ‘83 1 BCF/d
•Sheep Mountain ‘83 300 MMCFD
•Bravo Dome ‘84 400 MMCFD
•Jackson Dome ‘85 240 MMCFD
CO2 Source and PL Operators in the 80’s
Perspectives from the 80’s – Source and Pipeline
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Source Wells and Field:
• Flow vs ESP• Fiberglass Tubing • Stainless Steel Flowlines• Operating Pressures, Temperatures• Dehydration with glycol and glycerol
Pipelines:• Crack arrestors• Water content spec• Metering• Pumping vs. compression
Perspectives from the 80’s – Source and Pipeline
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The Initial CO2 Pipelines –Several different business approaches were taken
Canyon Reef CarriersOwned by SACROC Unit
Cortez PLPartnership – posted tariff
Sheep Mountain PLJV-Undivided Interest
Bravo PLJV-Undivided Interest
Choctaw PLSingle Owner
Central Basin PLContract Carrier
WyomingSingle Owner
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Denver Unit, Wasson ODC, Willard, Cornell, Mahoney, Means, Seminole
San Andres Dolomite, ~5200’ deep• Initial slug size • Wag or continuous, wag ratio,
tapered wag• Flumping wells• Gas processing • H2 S treating: sulferox, selexol
Initial contracting for supplyVolumesPricingIn-kind deliveries, balancingTake-or-Pay/Project Failure
Early Permian Basin Projects
Denver UnitShell
BennettRanchShell
ODC UnitAmoco
Willard UnitArco
Cornell UnitCornell
Mahoney UnitMobil
Roberts UnitTexaco
Wasson Field
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Little Creek, W. Mallalieu, Olive
Tuscaloosa Sand, ~10,000’ deep, ~30’ of pay
• Strongly water wet• Gravity Over-ride• Continuous CO2
Injection• Sand Control• Continuous Inhibition
Early Mississippi CO2 Projects
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Ref: Holtz Case Studies
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Early Rockies EOR Projects
Rangley, Lost Soldier, Wertz
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$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50
$20.00 $40.00 $60.00 $80.00 $100.00
1982 1983 1985 1985 1986 1988
Early CO2 Contract Price vs Oil PriceDelivered at the Field
Reference: KMCO2 records, based on current Cortez PL tariff
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The early 1980’s – pretty heady times…and a lot of gutsy investments made
Courtesy: Raiders of the Lost Arc
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$0.00
$10.00
$20.00
$30.00
$40.00
1980 1985 1990 1995
Oil Prices - Historical
Perspectives on 1986 - 2000
What goes up with great expectations, often comes down.
In February 1986 oil prices collapsed.
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RetrenchmentCost ControlBusiness Process Redesign
Perspectives on 1986 – 2000 A lot of projects under water
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84 86 88 90 92 94 96 98 00
Active US CO2 EOR Projects
Courtesy: Bart Simpson
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Suddenly a heated exchange broke out between the King and the moat contractor. Courtesy: Larsen
Supply Contract Challenges
• Project economic failure• Volumes above TOP• Parsing language, provisions
The Dean of CO2 Contracting
• Jim Hefley – Amerada Hess
New CO2 Marketing Strategies Emerged
• Blanket supply arrangements• Trading CO2 for participation in projects• Industrial gas customer demand
Persistent Focus on all Costs
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Early Attempts to Expand CO2 Market
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Early Attempts to Expand CO2 Market
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Early Attempts to Expand CO2 Market
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Early Attempts to Expand CO2 Market
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Shell CO2 Company, Ltd. formed March 1998…and then Kinder Morgan buys Shell’s 80% interest in 2000
Best move I ever made(That’s Bill Morgan on the left)
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‘Scotty, we need more compression now!’
‘Captain, the vessels are too small…the facility is going to blow up!’
The ‘90’s was a decade of learning – projects don’t always work as originally drawn on paper
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CO2 EOR - Its not all just about the subsurface…It takes an integrated team to make it work
• Subsurface/Geo- sciences
• Facilities engineering
• Well engineering
• Operators
• Mechanics
• Commercial
• Financial staff
• Management
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$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
2000 2002 2004 2006 2008 2010
Oil Prices – Historical
2000 to Present
Oil prices began to steadily rise, finally, and the industry expanded.
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CO2 EOR Industry has been quite busy Despite changing ~90% of the players
0
20
40
60
80
100
120
84 86 88 90 92 94 96 98 00 02 04 06 08 10
Active US CO2 EOR Projects
Courtesy O&GJ
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An evolving business – The industry changes hands
CO2 Source and PL Operators - the 80’s
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An evolving business – The industry changes hands
CO2 Source and PL Operators - Present
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Courtesy O&GJ
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Courtesy O&GJ
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Clarke’s Third Law:Any sufficiently advanced technology is indistinguishable from magic
What we now take for granted:• Residual Oil Saturation to WF
• MMP testing, developed miscibility
• Elastomers
• Corrosion management
• Chemicals• Liners for Tubing • Non-metallic pipe
• Pumping, ESPs vs. compression
• Membrane Separation
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CO2 EOR Production/Injection History and Forecast A solid track record and a promising future.
0.00.20.40.60.81.01.21.4
1985 1995 2005 2015 2025 2035
CO2 EOR MMB/D
Fraction of Domestic Production
0.0
2.0
4.0
6.0
8.0
10.0
12.0
1985 1995 2005 2015 2025 2035
AnthropogenicNatural CO2 Bcf/d
References: AEO 2011 Forecast, O&GJ, Personal Knowledge
?
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Can we do it?
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It depends…
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We need continued advances in technology
Improve results + lower risk + reduce costs = more opportunities
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We need continued advances in technology
Improve results + lower risk + reduce costs = more opportunities
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We need professional help
0
20,000
40,000
60,000
80,000
100,000
1980 1985 1990 1995 2000 2005
US Engineering Graduates –Bachelor Degrees Awarded
Our country is not educating enough science and engineering students
Courtesy: National Science Foundation
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We need a mandate
When will the people pulling against us get tired of $4+/gallon gasoline?
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We need to restore public confidence
Education
Compliance
Operational Excellence
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We have a noble mission
“Every new CO2 project saves a town”- Chuck Fox
Snyder, Texas
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Rich Kinder of Kinder Morgan:
“Good things come to those who waiteth, if you work like hell while you waiteth.”
From someone who knows a lot about the energy business
Houston Business Journal Feb 16-22, 2001