ECF China Shale Weekly Review - November 17, 2019

Energy China Forum releases weekly review of China shale gas and oil updates every Sunday. For more China shale gas and oil information, please contact ECF editor. 


Policy & Regulation

1. China's definition for shale gas, tight oil and shale oil

Standard: National Standard GB/T31483-2015 "Shale gas geological evaluation method", issued by the General Administration for Market Regulation and the Standardization Committee of China in May 2015.


Definition: The shale gas is mainly composed of free or adsorption state natural gas in the organic-rich shale interval. The main body is self-generated and self-storing, large-area continuous natural gas accumulation. Under overburden conditions, the shale matrix permeability is generally less than or equal to 0.001 mD. Single well generally has no natural production capacity, requiring certain technical measures to obtain industrial gas flow.


There are 3 major concepts in the definition:


I. Shale Gas


1. Shale: A grainy and brittle fine-grained sedimentary rock that consists of granular debris, clay, organic matter, etc. with a particle size of less than 0.0625 mm. 


2. Organic-rich shale: Dark-colored shale with more than 2% organic carbon content in rocks and more than 1% in other types.


3. Organic-rich shale interval: Geology units of thin interlayers between organic-rich shale and stratigraphic units rich in organic shale and silty sandstone, fine sandstone or carbonate rock. Wherein, the thickness of the single layer of the thin interlayer is not more than 1 m, and the thickness of the accumulated thin interlayer accounts for less than 20% of the total thickness of the shale layer.


Minimum industrial gas flow standard for shale gas wells


Depth  (m)Vertical Well  Production (10,000 m3/d)Horizontal Well  Production (10,000 m3/d)Conventional  Onshore Vertical Well Gas Production (10,000 m3/d) 
<500--0.05
500-10000.201.000.10
1000-20000.502.000.30
2000-30001.004.000.50
3000-40002.006.001.00
4000-45003.008.002.00


II Tight Oil


Standard: National Standard GB/T34906-2017 "Geological Evaluation Method for Tight Oil", issued by the General Administration of General Administration for Market Regulation and the Standardization Committee of China in November 2017.


Definition: The oil in the reservoirs of tight sandstones, tight carbonates, etc. with a permeability of less than or equal to 0.1 mD (air permeability less than 1 mD), or non-heavy oils with a fluidity of less than or equal to 0.1. mD/(mPa.s).


The reservoir is adjacent to organic-rich oil rock. The single well has no natural production capacity or natural production capacity lower than the minimum commercial oil production, but commercial oil production can be obtained under certain economic conditions and technical measures.


What makes sense is that in this standard, the indicators and thresholds for the geological evaluation of the tight oil sweet-spots area are determined. In addition to geological sweet-spots and engineering sweet-spots, the evaluation of economic sweet-spots is also emphasized.


Another important indicator is that the standard sets weights for each evaluation index. Of course, these weights are only a reference standard. Due to the differences in geological foundations and reservoir conditions of various basins and reservoirs. The geological indicators and weights should vary in the standard.  (ECF)


Exploration & Production

2. Sinopec launches pilot test to promote normal pressure shale gas development

Sinopec East China Petroleum Bureau carried out pilot tests around the domestic normal pressure shale gas exploration breakthrough at Nanchuan Shengye 2HF well in Chongqing, strengthening the understanding of the pattern, optimizing the construction plan, and preparing for the subsequent large-scale and integrated development of shale gas. As of November 2, the platform deployed 11 horizontal wells around the Shengye 2HF well, and completed drilling work of over 15,000 meters. (ECF)


3. Shale gas well in SW China sees record high output

A well in southwest China's Chongqing Municipality has produced more than 300 million cubic meters of shale gas after 2,231 days of use, a record high number, its developer Sinopec said last Friday.


It is estimated that 300 million cubic meters of shale gas is equivalent to a year's gas consumption for a city with a population of 4.8 million.


The well is located in Fuling, China's largest shale gas field. For now, the daily output of the well remains at 65,000 cubic meters, said the company.


As of Nov. 8, Fuling shale gas field had put 421 wells into production and yielded more than 26 billion cubic meters of gas, benefiting thousands of enterprises and more than 200 million residents along the Yangtze River. (ECF)


Market

4. China oil giants signed over 80 billion USD during import EXPO

The 2nd China International Import Expo was held in Shanghai during Nov 5-10.


More than 3,000 companies from more than 150 countries and regions participated in the exhibition.


On November 6, the China Petroleum International Cooperation Forum and signing ceremony on the theme of “cooperative innovation and value creation” was held by CNPC in Shanghai. CNPC signed strategic cooperation agreements with SNAM and Schlumberger, and signed 21 procurement contracts with over 20 overseas suppliers including Kazakhstan Gas Transport, Saudi Aramco, Kuwait Petroleum, ABB, Schlumberger, Caterpillar, Honeywell, Dow Chemical. The total amount of on-site signing agreements reached approximately $29.2 billion.


On November 7, the “Offshore Oil Cooperation Win-Win and High-Quality Development Forum” was held in Shanghai. China National Offshore Oil Corporation (CNOOC) and 12 world-renowned suppliers such as Baker Hughes and Tenaris signed on-site framework agreements and import procurement contracts to purchase high-end equipment, technical services and bulk materials for offshore oil. The total contracted amount is about 10 billion US dollars.


On November 8th, Sinopec successfully held the “Sinopec Import EXPO Trading Group Procurement Matchmaking and Signing Ceremony”, signing contracts with nearly 50 companies around the world for oil products, chemical products, mechanical and electrical equipment and materials with the total amount up to 45.6 billion US dollars. At the same time, Sinopec's E-Business Company EPEC signed a memorandum of strategic cooperation with the Brazilian Export Investment Promotion Agency.  (ECF)
Disclaimer: The above content was edited by Energy China Forum (www.energychinaforum.com), please contact ECF before reproduce.

Author:Jeffrey    News Time:2019-11-18

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