Innovation of Coal Seam Gas Well-Construction Process in Australia: Lessons Learned, Successful Practices, Areas of Improvement

Abstract

Abstract From by-product to multi-billion dollar industry, the Coal Seam Gas (CSG) industry in Australia has recently experienced rapid growth however is still facing many challenges. The Australian CSG industry is approaching a cross-road; the transition from a Domestic Gas business to exporting the CSG resources, requiring a significant scale up of current operations. Well design innovation is one of the necessary levers to maximize the full potential of CSG as a competitive energy resource. This paper focuses on the technical challenges associated with driving continuous improvement in drilling and completion practices as a key success factor for competitive performance. The growth expected in the CSG industry over the next few years will be rapid. Arrow Energy plans to increase its production from 150 TJ/day in 2012 to 1350 TJ/day in 2018. This will require increases in drilling performance. Much of the early success will likely be obtained from the transfer of benchmark practices, where relevant, from the more mature global oil and gas industry - rather than from true CSG innovation. However, given the lower cost margins and economics of CSG, this knowledge transfer will need to be coupled with innovative application and new approaches. This paper will discuss the importance of innovation in basis of well design as a lever to drive improvements in CSG in Australia and outline some of the key areas that Arrow Energy is focusing on to achieve this, including: The need for fit for purpose rigs to meet well design criteria and well safety requirements. Standardization of well designs and equipment aligned to local government regulations and American Petroleum Institute (API) regulations. Vendor alignment and incentivized performance to meet company targets. Problems associated with innovation and difficulties of implementation in short time frames as well as the application of lessons learned from trials. Well design evolution and optimization of gas recovery. The importance of adopting a culture of learning and flexibility to implement changes as design standards progress.