Production Technology Challenges of Tight and Shale Gas Production in China

Abstract

Abstract Natural gas production from tight and shale gas reservoirs is becoming increasingly important in China as the country shifts from coal-based energy to cleaner energy sources. Recent Chinese sources have estimated that the gas-in-place resources from tight and shale gas reservoirs in China are at least 12 and 31 Tcm, respectively1. In 2008, annual production from tight gas reached 20 Bcm, about 23% of natural gas production in China1. Commercial production from shale gas reservoirs is yet to begin, but is expected to grow rapidly in the future. This paper gives an overview of the production technology challenges of tight and shale gas production in China. Based on a review of the published literature and their own observations, the authors have identified a number of key production technologies that are relevant and can potentially make significant impact on tight and shale gas production in China. They include, among others, management of H2S risks, sourcing and disposal of water for hydraulic fracturing, pad drilling and completion, incorporation of geomechanics in well design and reservoir modeling, non-formation damaging fracturing fluids, and improved multi-stage fracturing techniques. This paper should be of particular interest to subsurface engineers, scientists and managers who are involved in tight and shale gas production in China. It will also be of interest to researchers in universities and research institutes who are interested to develop these technologies to unlock unconventional gas resources in China. Introduction Currently, China is the world's largest energy consumer and second largest oil consumer2. In 2011, 70.4% of China's energy consumption came from coal, 17.7% from oil and only 4.5% came from natural gas3. Emission from coal-burning power plants and automobiles are the two major sources of air pollution in China. Consequently, the key for China to move to a low-carbon economy is to reduce the use of coal and increase the use of natural gas. National consumption of natural gas in China in 2011 was 130.7 Bcm, a 21.5% increase from the previous year (Fig. 1). In the same year, national production of natural gas was only 102.5 Bcm. The gap of 28.2 Bcm, or 22% of national consumption, was satisfied by import by pipeline from Central Asia and from liquefied natural gas from Middle East, Africa, Australia and Southeast Asia3. In the last three years, the national consumption for natural gas has far exceeded domestic production. In order for this gap to be bridged, domestic production of natural gas, especially from unconventional resources such as coalbed methane (CBM), tight and shale gas reservoirs must be increased drastically. This need to grow domestic output of unconventional gas production has been recognized both by the government and private sector, thus giving tremendous impetus to the development of tight and especially shale gas reservoirs.