• Economic assessment of Alaska North Slope hydrate-bearing reservoir regional production development schemes

      Nollner, Stephanie P.; Dandekar, Abhijit; Patil, Shirish; Ning, Samson; Khataniar, Santanu (2015)
      The objective of this project was to evaluate the economic feasibility of producing the upper C sand of the Prudhoe Bay Unit L Pad gas-hydrate-bearing reservoir. The analysis is based on numerical modelling of production through depressurization completed in CM G STARS by a fellow UAF graduate student, Jennifer Blake, (2015). A staged field development plan was proposed, and the associated capital and operating costs were estimated using Siemens's Oil and Gas Manager planning software and costing database. An economic assessment was completed, incorporating the most common royalties, the current taxes laws applicable to conventional gas development, and most recent tariff estimates. The degree of vertical heterogeneity, initial average hydrate saturation, well spacing and well type had a significant impact on the regional gas production profiles in terms of cumulative volume produced, and more importantly, the expediency of gas production. The volume that is economically recoverable is highly dependent on how the field is developed. A field that has higher vertical heterogeneity and corresponding lower average initial hydrate saturation is most economically produced using horizontal wells at 160 acre spacing; the acceleration of gas production outweighs the increased drilling costs associated with the longer wells and tighter well spacing. The choice of development scenario does not impact the project economics significantly given a field that has lower vertical heterogeneity; however, development using horizontal wells at 320 acre spacing is marginally more economic than the alternatives. Assuming a Minimum Attractive Rate of Return of 20%, the minimum gas price that would allow economic production of ANS gas hydrates was found to be $29.83 per million British thermal units; this value is contingent on the reservoir having high average initial hydrate saturation and being developed with horizontal wells at 320 acre spacing. A slightly higher gas price of $36.18 per million British thermal units would allow economic production of a reservoir having low average initial hydrate saturation that is developed with horizontal wells at 160 acre spacing.
    • Project to demonstrate feasibility of gas production with sensitivities on production schemes on Sterling B4 sands formation

      Yeager, Ronald J.; Patil, Shirish; Ning, Samson; Khataniar, Santanu (2018-04)
      The Sterling B4 reservoir is a low-relief anticline structure underlain by a weak aquifer located on the Kenai Peninsula of Alaska. This dry gas-on-water reservoir, holding approximately 13.9 BCF, has experienced challenges since its first development in the 1960s. The gas-water contact is very mobile and easily influenced upward by gas production. All four wells, largely producing in succession of one another, have experienced excessive water production which killed gas production. Faulty drilling and completion work exacerbated the challenges associated with bringing the gas to market. This project covers an effort to develop the Sterling B4 and determine feasible alternatives for commercialization. Those alternatives include infill drilling, variable production, and co-production. Co-production is a method by which gas is produced from a single upper perforation and water is produced from a lower perforation; each of the streams are produced independently by mechanical means which utilize packers and tubing. The only feasible alternative found by this study is co-production. Of the two coproduction methods analyzed, the highest ultimate recovery includes the utilization of an existing vertical well perforating the upper portion of the reservoir for gas production and a new lower horizontal well perforating the water zone to control the gas-water contact. Modeled production schemes proved the gas-water contact was able to be controlled from upward mobility by maintaining a threshold pressure delta between the bottom-hole pressures of the two producing wells. Utilizing co-production in this manner yielded incremental benefit of over 2 BCF until shut-in limits were triggered. Economic analysis of the project has proved bringing the gas to sales presents a significant prize able to support production and able to support facility operational expense despite no other revenue streams. Should other nearby formations demonstrate sufficient targets the economic case would be enhanced and present an even greater prize.