Integrated Development of Changbei Tight Gas Project

Abstract Changbei is a tight onshore gas field located in North Shaanxi Province, Ordos Basin, China. Since 1999 Changbei has been produced by sixteen vertical hydraulically fractured wells through a 'Trial Production Operation' (TPO) facility. Shell signed a revised development PSC with PetroChina in 2005 and is the first IOC having production operation in the Ordos Basin, the second largest Basin in China. The main reservoir is a thin and fairly complex braided channel sandstone formation with low 5% average porosity, low 0.7mD average permeability and high >85% Net to Gross. Potential heterogeneities were identified by well test analysis. Presently these heterogeneities cannot be accurately predicted by geological and seismic interpretation. For the Changbei field development, a dual lateral well with two 2000m horizontal sections has been selected. Some 50 wells will be drilled from 3-well clusters over a period of 9-years, this allows continuous subsurface learning during development. Two years ramp up has been planned, reaching plateau production of 3bcm/a (290mmscf/d) in 2008 to help fulfill strongly increasing gas demand from Beijing1. Development drilling commenced August 2005 and is now a three rig operation. As of end June, five wells have been completed, of which four are tested and connected to the processing facility. The drilling outcomes have broken records on horizontal reservoir section length for onshore development in China and for the highest single gas well productivity in the Ordos Basin. During this initial phase of development, a number of lessons have been learned on both technical (for example reservoir heterogeneity and borehole stability) and organizational aspects (building a drilling operation in China from scratch, managing HSE in a different culture)2. After a summary of the development concept selection and the status of the project execution, this paper provides some of the learnings so far and how they have been used to further improve project delivery with a focus on technical aspects. Introduction A PSC was signed between PetroChina and Shell in 1999 to develop the Changbei Gas Field, this was followed by an extensive evaluation and appraisal period of two years preparing a development plan. Appraisal activities carried out included fracturing of existing and newly drilled vertical wells and drilling/testing of horizontal wells to allow a development well concept to be selected. A joint working group of both parties started to optimize the field development concept in 2004 and identified costs saving potential and generated plans to get this tight gas field developed, fulfilling both company's economic requirements. In 2005, a modified PSC was signed between PetroChina and Shell and a final investment decision was made in April 2005. Changbei tight gas development is the largest onshore cooperation between an IOC and one of the three local oil majors in China in terms of investment and development scale. As well as difficult reservoir conditions Shell as field operator, has to overcome challenges specific to the local environment, for example technology and equipment availability, local contractor competence, managing community relations and above all to execute the project successfully with a high HSE standard. The traditional way of developing Ordos Basin gas fields is vertical wells with propped hydraulic fractures. The selected development concept for Changbei of horizontal/dual-lateral wells with 2000m for each lateral leg is theoretically the most attractive option. However this needs to be practically proved. Field history3 Exploration drilling in the Changbei Block started in 1991. First small scale gas production, supplying local community, from the clastic reservoir is recorded in 1995. Seismic was then used to predict the lateral continuity of the reservoir sand body and reservoir boundary (Incised Valley Boundary), leading to an extensive exploration campaign between 1996–1997, culminating in a successful well-test with the calculated combined well AOF of 0.8MMscm/d or 28MMscf/d post hydraulic fracturing.