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The Economic Value of Shale Gas

Feature

Shale gas development has two main advantages, one is long mine life and the other is long production cycle- most gas shale is widely distributed, it is thick and generally contains gas. In that case, the shale gas well can make long-term and stable gas production. But the permeability of shale gas’ reservoir is low, so it is difficult to mine As the world's energy consumption continues to rise, unconventional energy sources, including shale gas, getting more and more attention. The United States, Canada and other countries have achieved commercial exploitation of shale gas. Shale Gas Reservoirs generally showed physical characteristics of low porosity, low permeability, stronger resistance to airflow than conventional natural gas, all the wells are required to implement the reservoir fracturing before mining. On the other hand, shale gas mining the yield is lower than conventional natural gas. Conventional gas recovery is above 60%, while the shale gas only 5% to 60%. Low yield strongly affects people enthusiasm. The United States develops some advanced technology that can improve the shale gas production. There are some difference between China and the US on shale gas reservoirs. For example, the shale gas reservoirs in Sichuan Basin are much deeper than that of US. The shale gas reservoirs of US are at depths of 800 to 2600 meters, while Sichuan Basin are at 2000 to 3500 meters. Deeper shale gas reservoirs undoubtedly make It more difficult to mine the gas in the condition of immature technology. .

Value

As technology advances, the cost of shale gas well fracturing gradually is reduced. Horizontal well is another key factor of hale gas reservoirs’ successful mining. Based on t American experience, the average daily gas production and the final production of horizontal well is 3-5 times more than that of the vertical gas wells. The gas production rate increases by 10-fold. In the meanwhile, the cost of horizontal wells is 2-4 times less than vertical wells. Therefore, the application of horizontal wells accelerates the development process of shale gas. Due to the large scale development of shale gas, the controlled recoverable reserves is high (up to 60 million square), after the measures taken, the daily output per well will be up to 3 Articles. With low production decline rate, it is easy to implement a stable production period of 30-50 years and achieve a relatively high yield economic value.

CNPC (PetroChina) discovered shale gas in China's Sichuan province. That confirms there are huge reserves of this unconventional fuel in China, a country thirst for energy. According to expectations, by providing a new type of cheap and abundant fuel source, shale gas reserves of natural gas in shale can change the energy supply pattern of China (world's largest energy consumer) in the coming decades.

PetroChina , the subsidiary of China National Petroleum Corporation (CNPC) told are British "Financial Times" that their company has drilled about 20 wells in the shale area of southern Sichuan Province, and the preliminary results are positive. "Now the average daily production per well is more than ten thousand cubic meters. We are still assessing the exact size of the potential reserves,” said Mao Zefeng, the senior assistant secretary of Petroleum Directorate. Shale gas need to get through a step known as fracturing to fracture the rocks to release natural gas. This mining method depressed natural gas prices, and it has brought revolutionary changes on the energy market of the United States and some other countrys.

The United States is the world's largest producer of shale gas. According to the estimates of US Energy Information Administration (Energy Information Administration), China's shale gas reserves are more than any other country, with 1,275,000,000,000,000 cubic feet of recoverable reserves. According to current levels of consumption, these reserves are sufficient for China to consume 300 years. Beijing considers the natural gas as part of the program to solve China's growing energy need. The government encourages the development of shale gas, coal bed methane and other "unconventional" natural gas resources. In a news conference on Wednesday, Sinopec chairman Fu Chengyu said Chinese shale gas production will eventually surpass that of the United States.

Accumulation Mechanism

After a comprehensive analysis on Shale gas accumulation mechanism, we obtain the understandings for the four aspects.

① shale gas accumulation mechanism has the feature of adsorption of  coal seam gas and conventional reservoir, reflecting complicated multi-mechanism graded characteristics.

②in shale gas accumulation process, the occurrence of gas accumulation mode and the type of gradual change, and the abundance and enrichment of gas containing gradually increase.

③complete shale gas accumulation and evolution can be divided into three main role processes, and itself constitutes mechanism sequences from adsorption, gathered from the expansion slot enrichment to advance or displacement piston-type transport.

④appropriate reservoir conditions and the changes of accumulation mechanism control and influence the accumulation and distribution of produce shale gas. The changes in lithology and fracture characteristics have a control action on the occurrence condition characteristics and distribution rule of shale gas. Our case study shows that many of Chinese basin own basic geological conditions for industrial shale gas development. Among these, Shuixigou Group, Tuha basin of Turpan is one of the important area of ​​shale gas development.

 

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