Coalbed Methane Development in China: Challenges and Opportunities

Abstract

This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 186289, “Coalbed Methane Development in China: Engineering Challenges and Opportunities,” by Hangyu Li, Shell; Hon Chung Lau, National University of Singapore; and Shan Huang, Shell, prepared for the 2017 SPE/IATMI Asia Pacific Oil and Gas Conference and Exhibition, Bali, Indonesia, 17–19 October. The paper has not been peer reviewed. For more than a decade, coalbed methane (CBM) has been developed commercially in China, but results have not met expectations. For instance, in 2015, annual CBM production in China totaled less than 5 billion m3 (Bcm) and lagged far behind that of the US (35 Bcm) and Australia (18 Bcm). This paper presents a literature review to determine the engineering challenges and opportunities presented by CBM production in China. Introduction China holds the world’s third-largest CBM resources after Russia and Canada. China has multiple basins that contain CBM resources, though the majority of CBM activities are found in the Qinshui and Ordos basins. Together, these two basins contain more than 30% of China’s total CBM resource volume and 93% of discovered geological reserves. Commercial-scale CBM production in China began in 2004 but did not see a significant increase until 2008. Since then, production has increased approximately threefold but remains significantly lower than that of the US and Australia, as well as the target set by the Chinese government. China’s lower CBM production is not the result of a smaller development scale compared with those of the US and Australia. In fact, the Qinshui basin alone contains more CBM-producing wells than does the entire state of Queensland. The lower production is, instead, the result of very low single-well gas rates. US and Australian basins have much higher single-well rates than do the Qinshui and Ordos basins. Understanding and identifying additional factors contributing to the unsatisfactory performance of CBM production, however, also is of critical importance. Coal Characteristics of the CBM Basins in China Most of China’s CBM development focuses on high-rank (Qinshui) and mid-high-rank (Ordos) coals. It is worth noting that, although there is abundant low-rank coal in the Ordos basin, the large-scale CBM development is found in the eastern part of the basin, where mid- to high-rank coals dominate. The problem with high-rank coals, however, is that they generally have lower permeability than low-rank coals. The highest permeabilities in either the Qinshui or Ordos basins are hardly higher than 10 md, with a large portion less than 0.1 md, while permeabilities in US basins can be 1000 md, with the majority higher than 10 md. Similarly, Australian basins are much more permeable than Chinese basins. The very low coal-seam permeabilities in the Qinshui and Ordos basins suggest that the low single-well gas rate can be attributed largely to low permeability.