The Technology and Economics of Methane Production From Geopressured Aquifers

Abstract

Doscher, T.M., SPE-AIME, U. of Southern California Osborne, R.H., U. of Southern California Wilson, T., U. of Southern California Rhee, S.,* SPE-AIME, U. of Southern California Cox, D., SPE-AIME, Energy Consulting Assocs. Kuuskraa, V., SPE-AIME, Lewin and Assocs. This study of the economic potential of methane production from geopressured aquifers leads to the conclusion that profitable exploitation of such reservoirs is not likely to occur in the near future, mainly because of the great reservoir size required to sustain economic production rates and the cost of disposing of spent brines. Introduction The purpose of this study was to estimate the cost of producing methane (natural gas) from geopressured producing methane (natural gas) from geopressured aquifers inland from and along the coast of the Gulf of Mexico. No other economic values of the geopressured brines were considered for exploitation.There were several component tasks of such an overall analysis that had to be completed in order to arrive at the final conclusion.1. An estimate of the reservoir parameters of the geopressured aquifers: areal extent, net thickness of productive sand, porosity, permeability, and effective compressibility. These parameters determine the production rates and the total recovery that may be expected within an economic time frame.2. An estimate of the production rates and cumulative production of geopressured aquifers having reservoir properties in the range of values determined by the first task.3. An estimate of the operating and capital costs of drilling wells and producing such geopressured aquifers. A significant part of the operating costs is the cost of disposing of large quantities of produced brines following desorption of the methane.4. An estimate of the sales price of the recovered methane using appropriate discount rates.This study has revealed that the selling costs of methane recoverable from geopressured brines, before federal income taxes and the amortization of development costs prior to commercialization, would range from $4 to $15/Mcf and possibly higher.These results follow from the ranges of the values that could be attributed to the various reservoir parameters and the application of reservoir parameters and the application of reservoir engineering principles. A 15% rate of return was set as the reward for the capital investment before imposition of federal taxes and precommercialization development costs. Capital and operating costs are those prevailing during 1977, except for the direct cost of energy used in the field. The cost of Btu's was equated to that determined from the selling price of methane predicted by this analysis. The operation was assumed viable for a period of 20 years.It is impossible to determine the most likely price of the rather wide range of selling prices stated above. All but one of the parameters that affect productivity and, therefore, cost can be assigned a productivity and, therefore, cost can be assigned a most likely value as the result of our study. However, the value of one critical parameter can be set at this time only by analogy with the reported parameters of oil and gas reservoirs. That parameter is the area of the reservoir from which at least one well is required to drain the geopressured aquifer. JPT P. 1502