1.Team 3 | Shale Gas 1 SPE YP EDUCATIONAL WEEK 2014

2. Unconventional Shale Gas Presented by Team 3 SPE YP Educational Week, SPE Egypt Energy For The Future 3. Team 3 | Shale Gas 3 Objective:- Make a detailed study on shale gas trying to show its extraction process and its challenges especially for application in Egypt . Vision & Objective Vision:- Set a primary base criteria for shale gas characteristics and its potential helping in further estimation of it. 4. Team 3 | Shale Gas 4 WORK PROGRESS Introduction 1 Shale properties 2 Reservoir characterization 3 Drilling 4 Hydraulic frac 5 Surface processing 6 Economics 7 5. Team 3 | Shale Gas 5 Introduction 6. Team 3 | Shale Gas 6 World consumption 7. Team 3 | Shale Gas 7 World Facts US production by fuelUS production by source 8. Team 3 | Shale Gas 8 Shale Gas Revolution 4 Major Changes 1. A low cost era is beginning 2. Petrochemical will be a Gas based industry 3. Gas power generation will increase 4. All of the above will provide more and more numerous future careers 9. Team 3 | Shale Gas 9 Shale Gas Map 2013 TRR in TCF Algeria 707 USA 1161 China 1115 Argentina 802 Canada 573 Mexico 545 Australia 437 South Africa 390 Russia 285 Brazil 245 Others 1535 10. Team 3 | Shale Gas 10 G&G PROPERTIES 11. Team 3 | Shale Gas 12 Whats Shale ?? Shale gas Natural Gas which is naturally trapped within very fine grained sedimentary rocks called shale or mudstone. Millions of years ago, the mud and silt that was deposited in ancient oceans and lakes often contained plant and animal debris. Over time these sediments containing this organic material were compacted and solidified through burial, and with increasing temperature and pressure formed shale and mudstone. 12. Team 3 | Shale Gas 13 Shale Different Forms Fine Grained Black Shale Inter-bedded with Coarser Siltstones Fractured Shale Shale and mud rich rocks often vary in color as well as grain size. Colors may vary from dark brown or grey through to black shale 13. Team 3 | Shale Gas 14 A measure of how much pressure and temperature the rock has been subjected to. More mature, higher gas ratio Vitrinite reflectance (% Ro), where a value above approximately 1.0%1.1% Ro indicates the organic matter is sufficiently mature to generate gas . Thermal Maturity Effective bulk permeability in gas shale is typically much less than 0.1 (md), although exceptions exist where the rock is naturally fractured (Antrim shale) Pore Space amount of organic material present > 2% Total Organic Content Characteristics for Potential Shale Gas 14. Team 3 | Shale Gas 15 Data Acquisition Coring For more Penetration through the target zone Logging For larger stimulated reservoir volume 15. Team 3 | Shale Gas 16 Gas Shale Coring Multi-scale Visualization High resolution micro-CT (Computer Tomography) Dual beam SEM FIB: Focused Ion Beam Gas injection & NMR GeoMechanics 16. Team 3 | Shale Gas 17 Shale lithology and mineralogy logging Gamma-ray and Spectral Gamma-ray 17. Team 3 | Shale Gas 18 Density Log and Photoelectric Factor (PE Log) Neutron Log Sonic Log Porosity Logs 18. Team 3 | Shale Gas 19 Laterolog Induction log Micro-Resistivity Basics Resistivity Logs (Water Saturation) 19. Team 3 | Shale Gas 20 Nuclear Magnetic Resonance (NMR LOG) Borehole Temperature- Logging Other Logs 20. Team 3 | Shale Gas 21 Shale Gas Horizontal Production Logging Production Logging Measurements Horizontal Production Logging Horizontal Production Logging Challenges 21. Team 3 | Shale Gas 22 Shale Gas Reservoir ! What Do We Have to Consider? Ultralow-Permeability Triple Porosity Behavior Gas Adsorption/Desorption Nano-Pores Effect 22. Property Antrim Ohio New Albany Barnett Lewis Depth (ft) 6002400 20005000 6004900 65008500 30006000 Net thickness (ft) 70120 30100 50100 50200 200300 Bottom-hole temperature (_F) 75 100 80105 200 130170 TOC (%) 0.324 04.7 125 4.50 0.452.5 Total porosity (%) 9 4.7 1014 45 35.5 Gas-filled porosity (%) 4 2.0 5 2.5 13.5 Water-filled porosity (%) 4 2.53.0 48 1.9 12 Permeability thickness 15000 0.1550 NA 0.012 6400 Gas content (scf/ton) 40100 60100 4080 300350 1545 Adsorbed gas (%) 70 50 4060 20 6085 Reservoir pressure (psi) 400 5002000 300600 30004000 10001500 Pressure gradient (psi/ft) 0.35 0.150.40 0.43 0.430.44 0.200.25 Gas production (mcf/day) 40500 30500 1050 1001000 100200 Well spacing (ac) 40160 40160 80 80160 80320 Recovery factor (%) 2060 1020 1020 815 515 Gas in place (bcf/section) 615 510 710 3040 850 Reserves (mmcf/well) 2001200 150600 150600 5001500 6002000 Historic production area Otsego County, Pike County, Harrison County, Wise County, San Juan & Rio Arriba Geological, Geochemical, and Reservoir Parameters for Five Shale-Gas Systems(Hill and Nelson (2000)) 23. Team 3 | Shale Gas 24 3. Adsorbed Gas 2. Natural Fractures 1. Matrix Pores A Triple porosity Model is appropriate to describe the gas storage mechanism because it includes both the free gas and adsorbed gas. Briefly speaking, triple porosity is dual porosity system combined with gas adsorption. Triple Porosity Behavior Gas Filled Pores 24. Team 3 | Shale Gas 25 Shale can hold significant quantities of gas adsorbed on the surface of the organics in the shale formation. Adsorbed gas can be the dominant in-place resource for shallow, organic-rich shales. Gas Adsorption/Desorption 25. Team 3 | Shale Gas 26 Gas flow in Nano-pores cannot be described simply by the Darcy equation. Processes such as Knudsen diffusion and slip flow at the solid ma-trix separate gas flow behavior from Darcy-type flow. Nano-Pores Effect 26. Team 3 | Shale Gas 27 Depletion of free gas stored in the fracture network (Darcy Flow) Gas Production Mechanisms Depletion of free gas stored in the matrix (Knudsen diffusion and slip flow in micropores) Desorption of Adsorbed Gas (Gas diffusion ) 27. Team 3 | Shale Gas 28 Rate VS Time Curve Lasting one to three months The primary controlling variables are : Fracture permeability Fracture spacing Effective lateral length. The response is dominated by: Fracture permeability The width of the stimulated area Secondary variables during the middle time region are matrix porosity and net thickness. Important variables in the late time region are Matrix permeability Matrix porosity Fracture spacing of any natural fractures in the non-stimulated area. 28. Team 3 | Shale Gas 29 Estimate the OGIP OGIP = Free Gas + Adsorbed Gas There`s a significant uncertainty in the ultimate recovery of the fields to which analogy might be made. Volumetric Method The effect of adsorbed gas should be included. Adequate matches could be obtained during history matching and accurate predictions could be made for future reservoir performance. Material Balance The PDA for shale/tight gas is different from conventional methods based on radial flow and boundary dominated flow, which were developed first by Arps. Decline Curve Analysis The presence of massive multi- cluster, multi-stage hydraulic fractures only makes the reservoir modeling of shale formation more complicated. Since hydraulic fractures are the main reason for economic production from shale, modeling their behavior becomes one of the most important aspects of modeling storage and flow in shale formations. Numerical Simulation Reserve Determination & Production Forecast for Shale Gas 29. Team 3 | Shale Gas 30 Shale Gas Development Horizontal drilling For more Penetration through the target zone Multi-stage frac For larger stimulated reservoir volume Higher gas market price For encouragement of investment 30. Team 3 | Shale Gas 31 Horizontal Drilling 31. Team 3 | Shale Gas 32 Drilling Process Period May take from 90 to 120 days Function Horizontal penetration to increase the produced interval Number of Wells 4:8 wells as typical 12:16 wells may be possible Design Stretched more than 3000 ft underground 3 millions Ib of steel and cement are used 32. Team 3 | Shale Gas 33 Drilling Considerations Considerations Longer Lateral Faster Higher Build Rate High Quality Special Designed Drill Bits Rotary Steerable System(RSS) 33. Team 3 | Shale Gas 34 Bits Products New different drilling bits products for higher penetration rate and less borehole problems ONYX II Premium PDC Cutter Improved thermal stability and abrasion resistance through new materials and manufacturing processes for increased footage and ROP in tough formations. 34. Team 3 | Shale Gas 35 Drilling Fluid Challenges Water Base Mud Tight Spots Shale Instability Stuck Pipe Hole Pack Off Torque & Drag WBM VS OBM More drilling days were spent on the same footage with WBM . 35. Team 3 | Shale Gas 36 Mud New Systems Thedevelopmentofanewwaterbaseddrillingfluidsystemcompatiblewiththeseformationswouldbeanimportant stepinthedevelopmentofshalegasdrilling. The Terra-Max system In addition to addressing the operators waste management issues, use of the high-performance WBM achieved an average ROP of about 50 ft/hr, which was comparable to ROP rates using OBM, according to Baker Hughes. Benefits Excellent wellbore stability Superior clay inhibition Enhanced rates of penetration Reduced torque and drag 36. Team 3 | Shale Gas 37 Completion 37. Team 3 | Shale Gas 38 Completion Characteristics Cost USD 7.75 million for 5,000 ft laterals USD 4.75 million for 2,500 ft laterals Cemented Laterals Range from 2,500 to 5,300 ft Completion Fluids 18,000 bbl of slick water 200,000 lbm 100 mesh sand Types of Casing 75% Cased Hole 25% Open Hole 38. Team 3 | Shale Gas 39 Plug & Perf. VS OH Completion Plug & Perf. 75% of Shale gas wells More reliable Achieve better production results Verifiable zonal isolation Indicate exactly where frac is going More flexible if things dont go as planned OH Completion 25 % of Shale Gas wells No perforating needed Faster stimulation times No intervention with CT is needed More stages can be simulated in less time Greater reservoir contact Limited cementing operations Low Cost 39. Team 3 | Shale Gas 40 Rupture Disc Valve (RDV) Challenge: Overcome the costly, timely and risky first stage of Plug & Perf. Rupture Disc Valve It is downhole valve exists as part of the casing string, It provides positive isolation and allows for a pressure integrity test of the casing to be performed. The RDV is cemented in place and requires no changes to the cement operation or chemistry. It is pressure activated and once the sliding sleeve in the valve is opened, the wellbore fluid is exposed to the cement sheath in the annular space then fracturing operation can begin. It saves 100,000 $ per each well. 40. Team 3 | Shale Gas 41 Hydraulic Fracture 41. Team 3 | Shale Gas 42 Frac Target Simple Bi-wing. Common used one in conventional reservoirs Intensive Complex Frac. Massive frac is needed for unconventional shale gas 42. Team 3 | Shale Gas 43 Frac Process 1. Pad injection 2. Increased prop concentrations 3. Flush 4. Pressure bled off 5. Recovery of injected fluids 43. Team 3 | Shale Gas 44 What frac. fluid will be used? How effectively can it transport proppant and how it is distributed? Is the proppant strong enough and retain strength over the long term? Where did the frac. go and what did it touch (or not)? What is the maximum length of lateral that can be placed into the formation and effectively cleaned up after fracturing? Is there a good lower frac. barrier? How to make it safe and keep away from the ground water ? 1 Beginning With The End In Mind 2 3 4 5 6 7 44. Team 3 | Shale Gas 45 Common Practice Multi-stage frac More than 30 stages per each well Huge amount of fluid Between 3:5 million gallons of water High pump rate Using slick water at 100 bbl/minute for longer frac Higher Horse power More than 80 KHP is needed 45. Team 3 | Shale Gas 46 Open and Closed Fractures Some or all may be filled with Cement Localized Tectonics could create a second fracture set which could offset the original fractures Hydrocarbon Expulsion and/or Gas Cracking could create a new gas filled fractures network Frac Distribution in Shale Gas Hydraulic frac. will create fractures parallel to the maximum horizontal stress Reactivation of pre- existing fractures 46. Team 3 | Shale Gas 47 Frac Parameters Frac Network Size Higher SRV results in better well performance. Frac Network Density Small frac spacing results in better well performance 47. Team 3 | Shale Gas 48 Challenges Main Shale Properties Source Availability Land Area Shale properties low permeability brittleness properties natural fractures Main challenges Source availability Surface Water Groundwater Municipal Water Industrial Water Recycled Produced Water Collected Water Private Water Purchases Land area 2:5 acre needed 2 frac crews with concentration of equipment Stockpiling for equipment transport Tanker trucks for water requirements 48. Team 3 | Shale Gas 49 Environmental Effects Air Pollution Equipment emits CO2 nearly 400 tons per well during transportation of water, wastewater and equipment Water Issues Chemicals added pollute aquifers or surface water Reducing the availability of water for essential uses Flow back disposal Containing radioactive substances Other problems Short-term increase in traffic volume, dust and noise Induced seismicity into the ground 49. Team 3 | Shale Gas 50 New Technologies Trying to confront the main challenges of lack sources and provide new prop for more gas production Broadband Sequence by SLB - Feb 19, 2014 - Features Composite fluid; blend of degradable fibers and multimodal particles - Re-fracturing operations Perforating first interval Temporary perf clusters isolation No need for bridge-plug - Benefits Stimulating maximum perfs and zones of increased initiation pressure Increased Stimulated Reservoir Volume SRV Increased production by 20% and PI by 6x and decreased plug-and- perf completion time and cost by 40% 50. Team 3 | Shale Gas 51 New Technologies Trying to confront the main challenges of lack sources and provide new prop for more gas production LaserFrac Features Thermal induced stress Laser as a source of heat Thermal cracking Requirements Brittle materials are particularly sensitive to thermal fracture Expansion and contraction of grain Benefits Eliminate the source availability problem 51. Team 3 | Shale Gas 52 TREATMENT OF SHALE GAS PRODUCED WATER FOR DISCHARGE: How we can use the produced water ? 1. Injection 2. Surface Discharge/Beneficial use 3. Reuse in HVHF Challenges : 1. Water quality 2. High TDS concentrations limits treatment options 3. All treatment processes results in a test stream maybe liquid, solid or both. 4. All of the PW management options and treatment goals may be inter-related. 52. Team 3 | Shale Gas 53 Reuse of Flow Back Water in HVHF Benefits: Reduced withdrawals (and associated concerns) Reduced Disposal needs Reduced environmental concerns Challenges Blended water must be suitable for fracture fluid May require treatment for TDS, scale, microbes Not necessarily a no-treatment option 53. Team 3 | Shale Gas 54 Economics 54. Team 3 | Shale Gas 55 Resources Classification 55. Team 3 | Shale Gas 56 Impact of Technology and Economic Conditions on Gas Recovery 56. Team 3 | Shale Gas 57 Unconventional Economics Principal reasons why the development of shale plays remains economically risky is that: The High Uncertainty : The estimated ultimate recovery (EUR) is poorly constrained during the early stages of field development. A stochastic approach that accounts for the spatial spread of well productivities is included, using production volume probabilities P10P50-P90. The Huge number of wells that have to be drilled Each well recovers less gas per well when compared to a well in a conventional reservoir, many more wells have to be drilled in unconventional reservoirs to recover the gas. The need for drilling more wells translates into the need for higher investment and higher economic risk when it comes to the management of unconventional gas reservoirs. 57. Team 3 | Shale Gas 58 Thank You !