White River Hub Rockies
gas Greater Access
Questar Pipeline Co. 12/17/2008
Questar and Enterprise announced that service has begun on the White
River Hub. Located in Rio Blanco County, Colo., the White River Hub
currently connects Enterprise's natural-gas processing plant at Meeker
with four interstate natural gas pipelines: Rockies Express Pipeline
LLC; Questar; Northwest Pipeline GP (including the Williams Willow
Creek processing plant, which is currently under construction); and
TransColorado Gas Transmission Company. Two more interstate pipelines,
the Wyoming Interstate Company and Colorado Interstate Gas systems, are
expected to be connected during the first quarter of 2009.
The White River Hub, a joint venture between Questar (the hub operator)
and Enterprise, consists of four miles of existing 36-inch diameter
pipe and about seven miles of new, 30-inch diameter pipe, plus tie-in
and metering facilities. The White River Hub provides more than 2.5
billion cubic feet per day (Bcf/d) of firm and interruptible
transportation/wheeling service allowing producers, marketers and
shippers to access downstream markets for natural gas volumes produced
in northwest Colorado's Piceance Basin. In addition to the existing
interconnects, a new interconnect with Northwest Pipeline GP's Colorado
Hub Connection pipeline is anticipated to be placed into service in the
fourth quarter of 2009.
"White River Hub provides Rockies producers with greater access to
markets served by pipelines in the Piceance and Uinta Basins," said
Allan Bradley, Questar Pipeline president and CEO "We hope to further
enhance market liquidity by working with the appropriate parties to
establish a new, published, regional pricing point designated 'White
River Hub'."
Michael A. Creel, Enterprise's president and CEO, said, "The White
River Hub is another example of our continuing strategy of expanding
the partnership's western franchise of integrated assets in order to
provide Piceance Basin producers with increased flexibility. The
expected completion of Enterprise's Meeker II project later this month
will complement the new White River header system and further enhance
our capabilities to provide shippers with the midstream services they
need to access the most attractive markets."
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China
Xinjiang Oil 20-Miln-Ton
Production
CNPC 12/17/2008
On December 12, Tarim Oilfield, operated by PetroChina Tarim Oilfield
Company, achieved an annual production of 20 million tons oil
equivalent for the year, making it the fourth 20-million-ton field in
China.
Tarim is China's largest petroliferous basin, in which a total of 27
oil and gas fields have been discovered by CNPC since 1989. By far,
CNPC has produced accumulatively 72.7 million tons of crude and 55
billion cubic meters of natural gas from Tarim Oilfield.
The field's output was five million tons in 2002 and up to 10 million
tons oil equivalent in the year 2005. After another three years, annual
production of the field reached 20 million tons oil equivalent,
representing a record efficiency in the history of China's oil industry.
Tarim Oilfield serves as a major gas source of the West-East Gas
Pipeline. Completion of a number of large-to-medium sized gas fields,
such Kela-2 and Yingmaili, provided a resource base for Tarim to
deliver 20 billion cubic meters of natural gas per annum for 30 years.
Since the West-East Gas Pipeline being operational five years ago,
Tarim Oilfield has totally delivered 43.5 billion cubic meters of gas
to 80 cities in 14 Provinces and Municipalities downstream the
pipeline, accelerating the transform of China's energy consumption
structure.
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China's
Xinjiang Kelameili Gas in Production
CNPC 12/17/2008
On December 15, the Phase I Project of Kelameili gas field, located in
the Junggar Basin in Xinjiang Uygur Autonomous Region, was put into
commercial production with a daily gas output of 1.5 million cubic
meters.
Kelameili gas field is confirmed to have a proven reserve of 100
billion cubic meters, the first reserve of this size ever discovered
around the Junggar basin. The gas field is operated by PetroChina
Xinjiang Oilfield Company and will be built in two phases, with planned
annual capacity for the first phase of one billion cubic meters.
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 ExxonMobil World's
Largest LNG Carrier 266,000 cu m
Exxon Mobil Corp. 12/17/2008
Exxon Mobil Corporation’s technology leadership in liquefied natural
gas or LNG has resulted in an industry breakthrough in carrier design
and size, enabling the more efficient transport of natural gas to
markets throughout the world.
The recent completion of the world’s first Q-Max LNG carrier, named
‘Mozah,’ marks a step change in LNG shipping by reducing transportation
cost, while improving energy efficiency and reducing emissions. The
innovative Q-Max ships carry up to 80 percent more cargo, yet require
approximately 40 percent less energy per unit of cargo than
conventional LNG carriers due to economies of scale and efficiency of
the engines.
“The Q-Max carriers break the LNG shipping mold in nearly every way,”
said Neil Duffin, President, ExxonMobil Development Company. “The same
technology capability that drove us to develop a new class of LNG
carrier is driving innovation in all aspects of the LNG value chain.”
The large LNG ship technologies, developed in conjunction with joint
venture partner Qatar Petroleum, include a number of industry
breakthroughs and significant enhancements, including increased ship
size, onboard reliquefaction units, slow-speed diesel engines, twin
propellers and rudders, largest ship-board LNG tanks ever built, the
latest in hull antifouling protection and improved fire-protection
systems. The end result of these new generation ships is a 20-30
percent reduction in transportation cost.
“Qatar Petroleum, with ExxonMobil, led a major technical effort to
enable this groundbreaking enhancement in the LNG shipping industry,”
said Mr. Faisal Al Suwaidi, Qatargas Chief Executive Officer. “Shipping
is a critical link in the LNG value chain that extends from Qatar’s
North Field, the largest non-associated gas field in the world with
recoverable resources of more than 900 trillion cubic feet, to homes in
Asia, Europe, and the Americas. With our innovative technology, we have
effectively transformed the LNG business and opened up more of the
world for Qatar LNG,” said Al Suwaidi. Qatar Petroleum and ExxonMobil
are shareholders in a Qatar joint venture, Qatargas, that will charter
the Mozah and five other Q-Max carriers to supply LNG from new
liquefaction trains in Qatar.
For more than 30 years the size of LNG ships remained virtually
unchanged with capacity of about 140,000 cubic meters. Qatar Petroleum
and ExxonMobil’s ship operators, hydrodynamicists, naval architects and
structural engineers worked closely to develop and rigorously test the
larger Q-Max cargo tank designs.
Comprehensive evaluation of cargo sloshing was performed to prove that
the larger systems were feasible and reliable. The resulting Q-Max
carriers are longer than three football fields, tower twenty stories
tall from keel to masthead and are equipped with the largest membrane
containment tanks ever built. With a total capacity of up to 266,000
cubic meters, each ship carries enough natural gas to meet the energy
needs of 70,000 U.S. homes for one year.
In addition to increasing the size of the ship, a major initiative was
undertaken to design, test and implement the on-board reliquefaction
plant that re-liquefies natural gas that is vaporized during transit,
re-injecting it as liquid into the cargo tanks rather than using it as
vaporized gas to power the tanker itself – allowing for delivery of
nearly 100 percent of the cargo. This is particularly beneficial for
the long-haul voyages from Qatar to Europe and the Americas.
The on-board reliquefaction facilities created an opportunity to shift
from steam boilers and turbines used for propulsion by conventional LNG
ships to highly efficient slow-speed diesel engines. The Q-Max ships
are equipped with two diesel engines driving twin propellers and
rudders. This leads to more energy efficient, reliable and maneuverable
ships, reducing fuel consumption by up to one-third.
Recognized by industry veterans as a pioneer in LNG production and
technology innovation, ExxonMobil’s joint ventures in Qatar will see
the advent of more industry firsts over the next 18 months. In addition
to pioneering the industry's largest vessels to carry LNG to market,
ExxonMobil in partnership with Qatar Petroleum is employing new
technology in Qatar to build four of the largest LNG production
facilities in the world and is participating in the development of LNG
regasification terminal projects in Italy, UK and the US.
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Uganda Buffalo-1 could be it's largest oil field
By OGJ editors HOUSTON, Dec. 16
The Buffalo-1 discovery on Uganda's Block 1 could become the country's
largest oil field, said operator Heritage Oil Ltd., Calgary.
Buffalo, which could be larger than Kingfisher field on Block 3A, cut a
123-m gross hydrocarbon column with 43 m of net hydrocarbon pay,
Heritage said (see map, OGJ, Feb. 11, 2008, p. 36). The rig is moving
to drill the Giraffe-1 exploration well.
Heritage estimated the midrange gross contingent and prospective
resource at 118 million boe at Kingfisher and 32 million boe at
Kingfisher North in September. That was before successful completion of
the Kingfisher-3 well earlier this month, when Heritage called
Kingfisher, which has moved into the development phase, the largest oil
discovery in sub-Saharan East Africa. Kingfisher-3, drilled
downdip on the southwest part of the Kingfisher structure, found
hydrocarbons 100 m structurally higher than expected. It found oil in
all three Kingfisher reservoir intervals over a gross hydrocarbon
bearing interval of 110 m with net pay of up to 40 m.
Buffalo discovery
Buffalo-1, off the northeast end of Lake Albert, is 500 m from the
crest of the structure. TD is 637 m.
Wireline logging and formation pressure measurements indicate 28 m of
net oil pay in the principal oil-bearing reservoir section overlain by
15 m of additional net hydrocarbon pay that contains gas.
Downhole pressure testing and sampling confirmed the presence of
movable oil that has been recovered to surface, and log interpretation
indicates that reservoir quality in all pay zones appears to be
excellent, Heritage said. It suspended the discovery as a potential
future production well. The gross oil and gas columns seen in the
well are 75 m and 48 m, respectively, and there is potential for the
gross oil column of the accumulation to be significantly larger than
reported because no oil-water contact was encountered.
Management believes that Buffalo is the leading discovery in Block 1
and the Butiaba area to date. Based on seismic interpretation, further
exploration and appraisal drilling could prove up a substantial
accumulation of oil, Heritage said. Block 1 has numerous other
prospects mapped on more than 600 line-km of seismic data shot in the
past 18 months. All are characterized by similarly encouraging seismic
amplitude anomalies as seen over the Buffalo and Warthog prospects, and
all represent further prospects and leads which constitute additional
multiple drilling targets within the block.
All 17 wells drilled in the
Albert basin in Uganda the past 3 years have found hydrocarbons.
Heritage and Tullow Oil PLC each holds 50% interest in
Blocks 1 and 3A in Uganda.
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CNX Gas Marcellus
Record rate -- 6.5
MMcf
CNX Gas Corp. 12/15/2008
CNX Gas Corporation reported that its first horizontal Marcellus Shale
well is now producing at a rate of 6.5 million cubic feet (MMcf) per
day. This is a record daily production rate for any well in the
company's history and is believed to be among the highest reported by
any Marcellus Shale producer.
The well, located in Greene County, Pa., began flowing into the sales
meter on October 2, with an initial production rate of 1.2 MMcf per day
and 4,000 pounds of backpressure, as previously reported. The
backpressure on the well had been gradually reduced since then,
allowing daily production to increase to about 4 MMcf per day until
Friday, when the installation of new surface equipment enabled the well
to flow at the 6.5 MMcf per day rate, with pressure still being held at
2,640 pounds. Cumulative production from the well prior to last Friday
was 106 MMcf.
Nicholas J. DeIuliis, president and chief executive officer, said,
"This was a team effort from our engineers, operators, and support
personnel, including the directional drillers from Scientific Drilling
and the hydraulic fracturing team from BJ Services. I can't speak
highly enough of our Marcellus Shale team. "To achieve this kind
of success with our first horizontal Marcellus Shale well," DeIuliis
continued, "speaks volumes about the breadth of our horizontal drilling
expertise. Many investors may not be aware, but CNX Gas had drilled 160
horizontal coalbed methane wells before drilling its first horizontal
Marcellus Shale well."
The well was drilled to a vertical depth of 8,140 feet in the
Huntersville Chert, penetrating 83 vertical feet of Marcellus Shale.
The well was logged then plugged back and a horizontal section of 3,395
feet was cut for a total measured depth of 10,738 feet. The well was
completed with a five-stage slickwater fracture treatment using 3
million pounds of proppant.
CNX Gas has a 100% working interest in the well and a 100% net revenue
interest because CNX Gas does not pay a royalty. Because of the
gathering infrastructure already in place from its CBM operations, CNX
Gas was able to place the well online immediately after retrieving frac
fluids. Also, gas from production in southwestern Pennsylvania, as in
other areas of Appalachia, typically receives a premium over NYMEX
pricing.
CNX Gas is currently drilling its second vertical Marcellus Shale well
and will be shortly hydraulically fracturing its second and third
horizontal wells. Updates on these wells will be provided during the
company's next earnings conference call, now scheduled for January 28,
2009.
CNX Gas is also raising its 2008 production guidance to 75 billion
cubic feet (Bcf) from 74 Bcf. The current guidance represents the third
time guidance has been raised from the original guidance of 72 Bcf. If
the 75 Bcf is attained, it would represent a nearly 29% increase from
the 58.2 Bcf produced in 2007. The company attributes the increased
guidance to exploration success in both the Marcellus and Chattanooga
shales, as well as continued higher-than-expected coalbed methane
production.
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Texas Kuwait Makes 5tcf Gas Find
AFX News Limited 12/15/2008
Kuwaiti oil and gas producer Aref Energy says it has found close to 5
trillion cubic feet of recoverable natural gas in south-central Texas.
The company said Monday in a statement that results of a survey of its
joint venture operation in DeWitt County found that about 25 percent,
or 4.75 trillion cubic feet, of the roughly 19 trillion cubic feet of
gas in the concession was available for production.
The statement did not name the company's partners, who hold the
remaining 50 percent stake. But Aref said Houston, Texas-based
project manager Halliburton was "taking preliminary steps to commence
gas production operations."
Aref set up the Dewitt
Tract Co. in 2007 as a subsidiary to oversee operations in the county.
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 West
Texas Overthrust CH4, CO2, sweet gas
Oil & Gas Journal / Nov. 24, 2008
SandRidge Energy Inc.. Oklahoma City, expects to be
operating 20 rigs in the West Texas Overthrust by the end of 2008, down
from 27 rigs in early November and a third quarter average of 34.
The company has halved its planned 2009 capital budget from the $2
billion previously anticipated. It is also selling its East Texas
assets.
SandRidge continues to exploit and expand Pinon field using 3D seismic
and well control to identify new reservoirs in the three primary
thrusts:
Dugout Creek, Warwick, and Frog Creek. More than 600 wells have been
drilled at Pinon since the 1980s.
The company still doesn’t know how large Pinon field will become.
WTO thrusts
Pinon and other fields associated with the thrusts are spread across
Pecos and Terrell counties 20 miles north of Sanderson, Tex. (Figs. I
and 2).
SandRidge holds more than 650,000 net acres in the area and has
acquired virtually all of the leases in the WTO. The 5.1 tcf of net
proved, possible, and probable reserves identified in the 72,000-acre
Pinon field are almost exclusively in the Dugout Creek and Warwick
thrusts.
The Frog Creek thrust is the most recent of the three thrusts
discovered in the Pinon field to have commercial production. SandRidge
said. SandRidge hasn’t booked reserves from Frog Creek and hasn’t yet
drilled the Haymond thrust.
The Frog Creek thrust provides drilling opportunities in the Caballos
chert at 3,500-5,500 ft. The thrust as interpreted from 3D data appears
to be similar in size to the Dugout Creek and Warwick thrusts.
“We have started to drill wells targeting specifically the Frog Creek
Caballos and have very encouraging results.” SandRidge said. “We are in
the process of mapping this thrustwith geological information from the
few penetrations we have and tying into 3D seismic data to high-grade
locations as we prepare to drill more Frog Creek Caballos wells in
2009.”
Recent production tests from Frog Creek analyzed methane with less than
3% carbon dioxide. The company believes the Frog Creek thrust may
contain substantial quantities of reserves that can be developed at or
below current Pinon finding costs.
“Until we had our first interpretation of our proprietary 3D seismic
over the Pinon field in July (2008), we did not even realize that the
Frog Creek or Haymond thrusts existed,” SandRidge said in late October.
“This realization has increased the potential for continued expansion
of the Pinon field and across the West Texas Over-thrust.”
Drilling and seismic
SandRidge drilled 76 wells and completed and placed on production 60
gross wells in the WTO in the quarter ended Sept. 30, when it owned and
operated 61 2 gross wells.
The vast majority of the production growth the past 2 years has
occurred in the Dugout Creek thrust. The Warwick thrust is the field’s
most prolific producer.
SandRidge shot 265 sq miles of 3D seismic data in the third quarter of
2008, bringing the total shot to date to, 115 sq miles. The company
expects to have 1,250 sq miles of the planned 1,500 sq mile 3D shoot
completed by the end of 2008.
SandRidge believes it can use 3D seismic and well control data to
high-grade its drilling locations in the multiple thrusts in Pinon
field and continue to deliver drilling finding costs below $1 .70/Mcf.
The most prolific reservoir at Pinon is the Warwick Caballos chert high
CO2 reservoir at 6,000-8,000 ft with average estimated ultimate
recovery of 7 bcf/ well of total gas based on 125 wells drilled.
The Warwick thrust “is one of the keys to the future of our company as
it represents the best reservoir for capital spend of any large scale
play that I am aware of,” said Tom L. Ward, chairman, chief executive
officer, and president of SandRidge.
The company is nearly down at the Big Canyon 1-21 -1 A exploration well
30 miles east of Pinon field. Drilling at 15,400 ft and believed to
have entered the Warwick thrust, it has had encouraging shows. Results
are expected by the end of 2008.
Two other wells on the South Sabino prospect produced sweet gas at
initial rates below 500 Mcfd, but this production is “not from the
overthrusted chert that we have found in the Big Canyon well,”
SandRidge said. “The presence of sweet gas outside Pinon field is
important to our goal of finding additional Pinon fields on our more
than 650,000 acres in the WTO.”
Gas processing
Production from the Warwick Cabal-los reservoir is limited to 150 MMcfd
of inlet high CO2 gas processing capacity of the company’s legacy
plants.
SandRidge is expanding the capacity of existing plants and is building
the Century plant in a joint venture with Occidental Petroleum Corp.
funding construction and operating the facility for 30 years. The
project allows SandRidge to capture and accelerate development of a net
1.6 tcf of methane from high-CO2 gas.
Century is designed to have 800 MMcfd of processing capacity. The first
phase is to start up in the second quarter of 2010, and the second
phase is to start in the second quarter of 2011.
Given the current limited availability of CO2 treating capacity, the
risk of finding gas containing CO2 at levels above pipeline
specifications limits the company’s ability to aggressively develop the
Warwick thrust.
The company continues to find relatively sweet gas in the Warwick
thrust on the east side, but even transition wells with low amounts of
CO2 are not able to maximize production due to the lack of processing
capacity.
Once the Century plant starts up in 2010, the company intends to
implement a more aggressive drilling program and accelerate production
and reserves growth from the Warwick thrust.
“We believe that there are additional reservoirs containing high CO2
gas that can be developed once this plant is full, but that’s a bit too
far out for us to discuss in detail at this point,” SandRidge said.
“If we only keep our existing production flat from 2009 through 2011,
we will grow our production from our current 305 MMcfd to about 525
MMcfd by yearend 2011 with just the addition of the Century
plant.”
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