Successful Tight Gas Development Practice in Ordos Basin of China

Abstract

Abstract Tight gas is an important resource for PetroChina's foreign cooperation business. PetroChina has cooperated with Shell and TOTAL in tight gas E&P in Ordos basin for years and has made great achievements. It was proved through years of exploration that sets of reservoirs occurred in the Perm-Carb system of the Ordos basin. Benxi, Taiyuan and Lower Shanxi formation are accumulated in marine environment and characterized by sandstones encased in mudstones, while the Upper Shanxi, Shihezi and Shiqianfeng strata are the continental deposits as the favorable targets in the basin. CB is a cooperation project with Shell in northern Ordos basin. The Permian Shanxi tight gas interval was its target reservoir. CB is the first project deploying dual-lateral horizontal wells to explore the low permeability massive gas field in China and achieved big success. By far, the project has maintained annual production on a high level for 8 years. The second phase appraisal was initiated in 2013 to explore the secondary reservoirs. Recent testing result has seen a good indication and will be very helpful to raise total output to a new level. South Sulige gas field is located in the northwestern Ordos basin and is a project cooperated with TOTAL. To meet the challenges of poor lateral continuity and low reserve richness, an integrated new approach, such as reservoir prediction from 3D seismic Poisson ratio, "chessboard" well patterns from pad development, factory mode drilling and completion operations, were employed which effectively improved well performance and operational efficiency. PetroChina also initiated a joint study with ExxonMobil in Changdong area. The reserves were classified and individual well EURs were estimated by comparing with the U.S. Piceance basin and tight gas E&P practices in Ordos basin. The effective recovery of marginal pay sands will be crucial to the economic. Total gas consumption in China grew by 7.4% and gas production grew by 6.1% in 2014. Being the largest O&G supplier, PetroChina produced 74.4% of the total national output in 2014. Tight gas accounted for 28% of total annual gas production in PetroChina. Annual natural gas production from foreign cooperation projects reached 6.55 bcm with more than 82% from tight gas reservoirs. Ordos basin, Sichuan basin and Tarim basin are all rich of tight gas resources. Foreign cooperation in tight gas resources in China is enjoying a favorable development circumstances and embracing its bright future.