ECF China Shale Weekly Review - December 15, 2019
1. Guizhou Anyan 2 shale gas well achieved high production gas test
Recently, China Zheng'an shale gas Anye 2 well was conducting a backflow gas test, and the daily gas production exceeded 50,000 cubic meters. The stable test output ranked the forefront of the domestic daily atmospheric shale gas production indicating good development potential for Zheng'an shale gas.
Compared with the normal pressure blocks in Sichuan, Chongqing and Guizhou, the test output of Anye 2 Well is at a higher level, which indicates that the Zheng'an block has the foundation for large-scale development, and it is also provides a very good reference for shale gas exploration in northern Guizhou.
It is predicted that the shale gas reserves of the Zheng'an block of Wujiang Energy Group will reach 30 billion cubic meters. At present, there are wells An 2 and An 3 which have been tested for ignition. (ECF)
2. Chinese shale gas poised to spring output surprise in 2020
China is on course to produce 15 billion cubic metres of shale gas in 2019, a year earlier than some estimates. This puts the country on track to surpass output expectations in 2020 – potentially by a wide margin.
The 15 bcm forecast was given by PetroChina and Sinopec executives at separate industry events in Beijing on Thursday and Saturday. The predicted output would represent an increase of 37% from last year’s production of 10.8 bcm.
PetroChina's vice president Li Luguang addressed an acceleration of PetroChina in upstream shale development, saying the company's shale gas production is estimated to reach 7-8 bcm in 2019 and to reach 12 bcm in 2020. Li also said that PetroChina is strive to make that double to 24 bcm in 2025. （ECF）
3. PetroChina Plans 50% Fracking Surge Next Year
PetroChina Co. Ltd. is aiming to produce 12 billion cubic meters of shale gas next year and is predicting 7.8 billion to 8 billion cubic meters of output for 2019, company Vice President Li Luguang said at an energy conference Thursday.
The announcement comes amid Chinese government efforts to grow annual shale gas production (link in Chinese) capacity to 30 billion cubic meters by 2020, according to the Shale Gas Development Plan (2016-2020) published by National Energy Administration in 2016.
Shale gas deposits lie underground within layers of shale rock and require extraction using methods such as “fracking,” where high-pressure liquids are injected into the earth to blast the rocks apart.
The technique is controversial, prompting environmental and health concerns, and has even been linked to earthquakes.
But given that it allows otherwise inaccessible gas deposits to be exploited, Beijing has been pushing its uptake in recent years to shore up country’s energy security, providing policy support that includes a 30% tax cut (link in Chinese) for shale gas producers for the period April 2018 to March 2021.
Driven by improved technology and strong government backing, PetroChina set aside 228.2 billion yuan ($32.4 billion) this year to fund the surveying and exploitation of unconventional gas, an annual increase of 16%. Unconventional gas refers to deposits in hard-to-reach places, including shale gas and also coal-bed methane and methane hydrates trapped below the arctic permafrost.
In September, PetroChina revealed a new gas field in the Sichuan basin containing 741 billion cubic meters of shale gas, bringing the total known volume in the region to more than 1.1 trillion cubic meters — thought to be the largest deposit of shale gas in the world. And more could be discovered in coming years.
But the industry has been plagued by setbacks, including a series of deadly tremors that shook Rong county in the southwestern province of Sichuan earlier this year, sparking a public outcry that prompted the local government to suspend nearby fracking operations.
“We are very cautious to the exploitation of unconventional gas reserves until the impacts are fully investigated, understood, addressed and regulated,” said Yuan Ying, East Asia program manager at Greenpeace.
Yuan said it had been estimated that anywhere between 9,000 and 29,000 cubic meters of water are required for fracturing operations on a single well, which could impact the sustainability of local water resources. She also said the greenhouse gas footprint of shale gas may be significantly greater than for conventional gas.
There is already plenty of low-carbon and low-cost energy options such as solar and wind to replace gas, so it is no longer necessary to consider gas as a bridge fuel to coal, she added.
China produced 10.9 billion cubic meters of shale gas in 2018, up 21% from a year ago, accounting for 7.7% of the country’s total natural gas production with almost all produced by state-owned energy giants PetroChina and China Petroleum & Chemical Corp., better known as Sinopec. (Caixin Global)
4. Sinopec Made Major Breakthrough at Rotational Steering Technology
On November 29, 2019, SINOMACS ATS I rotary steering equipment independently developed by Sinopec Shengli Petroleum Engineering Co., Ltd.'s MWD technology center successfully tested in Shengli oil field, marking a major breakthrough for Sinopec's rotary steering technology.
For a long time, global oil service companies such as Schlumberger, Baker Hughes, and Halliburton have always occupied the high-end technical service market with their rotary guidance systems. Some domestic companies are conducting research and development, but have not yet formed large-scale application capabilities.
Sinopec Shengli Petroleum Engineering Co., Ltd. has gradually determined the R&D goal of the static push-type rotary guidance. The R&D team started with the principle design and calculation, and carried out repeated design experiments, assembly and debugging, and simulation verification of mechanical, electronic, and software modules to develop Sinopec's first static push-type rotary guidance system.
In the field test of Shengli Oilfield 1-2 inclined well 596, the test well section was drilled at 2070-2417 meters using 60% steering force, and the build rate reached 4.2 ° / 30 meters, which achieved high-precision control of the trajectory. Fast pulse data encoding was applied with an average physical transmission rate of 1.8bps and a success rate of 95%. A series of rotary steering tools completed a total footage of 347 meters under cumulative working time of 52 hours. All four modules including surface monitoring, two-way communication, MWD and downhole steering control achieved the designed effect. With a target radius of only 10 meters, the well was successfully hit and completed.
It is understood that Sinopec Shengli Petroleum Engineering Co., Ltd. will continue to be committed to the improvement and upgrade of the rotary steering system, increase the number of equipment sets, conduct more field tests, and gradually achieve the industrial production of equipment and large-scale promotion and application. （ECF）
Disclaimer: The above content was edited by Energy China Forum (www.energychinaforum.com), please contact ECF before reproduce.
Author:Jeffrey News Time:2019-12-16
Back
