Challenges of Tight and Shale-Gas Production in China

Abstract

This article, written by Dennis Denney, contains highlights of paper IPTC 17096, ’Production-Technology Challenges of Tight and Shale-Gas Production in China,’ by Hon Chung Lau, SPE, Shell (China) Projects and Technology, and Meng Yu, SPE, Shell International Exploration and Production, prepared for the 2013 International Petroleum Technology Conference, Beijing, 26-28 March. The paper has not been peer reviewed. Natural-gas production from tight and shale-gas reservoirs will be increasingly important in China as the country shifts from coal-based energy to cleaner energy sources. Recent Chinese sources have estimated that the gas-in-place resources from tight and shale-gas reservoirs in China are at least 12×1012 m3 and 31×1012 m3, respectively. In 2008, annual production from tight gas reservoirs reached 20×109 m3, approximately 23% of the natural-gas production in China. Commercial production from shale-gas reservoirs has not begun but is expected to grow rapidly. Introduction Since 2010, the consumption of natural gas in China has far exceeded domestic production. To bridge this gap, domestic production of natural gas, especially from unconventional resources [e.g., coalbed methane (CBM) and tight and shale-gas reservoirs], must be increased significantly. From a review of published literature and their own observations, the authors identified several relevant production technologies that could have a significant effect on tight and shale-gas production in China. Unconventional Gas Resources The US Energy Information Administration estimated that China had 0.289×1012 m3of proved CBM reserves in 2011, although other recent estimates of recoverable reserves are 9.9×1012 m3. Fig. 1 shows most of China’s gas-producing basins. CBM resources are in the north and northeast, the Sichuan basin in the southwest, and the Junggar and Tarim basins in the west. In China, tight gas resources total approximately 12×1012 m3. The Sichuan basin is one of the largest tight gas basins in China and is reported to have approximately 1.8×1012 to 2.25×1012 m3of natural gas. The Sulige gas field in the Ordos basin is the largest tight gas field in China. Most of China’s proved shale-gas resources are in the Sichuan, Tarim, and Ordos basins. Estimates of China’s total tight and shale-gas resources range from 36×1012 to 100×1012 m3. Although there was no commercial shale-gas production as of 2012, the Chinese Ministry of Land Resources has set aggressive targets of 6.5×109 m3/a by 2015 and at least 59.5×109 m3/a by 2020. Management of Hydrogen Sulfide (H2S) Risks Most of China’s sour-natural-gas fields are in the northeastern and western parts of the Sichuan basin (mostly conventional gas fields). An evaluation of shale-gas potential in the Weiyuan area showed significant shale-gas reserves. Therefore, it is important to determine the likelihood of penetrating sour reservoirs and to manage H2S risks. In general, a rigorous H2S safety-management plan will be needed if tight or shale-gas development will require drilling through or near zones containing H2S.