The World Bank has released more details about a big gas development and conservation project to begin this year in China's Sichuan province.
Sichuan Petroleum Administration (SPA) proposes to implement the $945 million plan to boost gas flow from fields in eastern and central Sichuan by about 2.4 tcf during 1995-2015. The plan aims to assure the integrity of its 2,800 km gas transmission and distribution pipeline system and reduce safety and environmental risks.
The World Bank earlier approved a $255 million International Bank for Reconstruction & Development (IBRD) loan to China to help finance the project (OGJ, Mar. 28, p. 38).
Funding includes a $10 million Global Environment Facility (GEF) grant from the Global Environment Trust Fund to help pay for a $122.7 million joint program to rehabilitate SPA's gas transmission and distribution pipeline system by 2000. SPA and China National Petroleum Corp. are to provide $59.7 million and IBRD $53 million for the pipeline upgrade.
THE NEED
Energy, demand in China, fueled by the country's double digit economic growth in the past decade, has outpaced energy supplies.
To ease acute energy shortages, the country has relied heavily on coal, its most bountiful fossil fuel. That has led to increasingly serious environmental concerns.
Expanding gas use would significantly reduce emissions of greenhouse gases. But lack of money, limited access to technology, and past neglect has constrained gas exploration and development. As a result, gas provides only about 2% of China's commercial energy.
With production of 230 236 bcf/year, Sichuan province accounts for about 90% of China's non-associated gas and about 44% of its total gas supplies.
But unless small to medium, deep, sour gas reservoirs discovered in eastern Sichuan during the past 10 years are developed adequately, the province's gas flow could begin to decline as early as 1995 at a rate of about 10%/year.
Proposed upsteam components of Sichuan's gas project could lift the province's gas production to as much as 282.5 bcf/year by 2000 from 229.5 bcf, postponing the expected production decline.
Sichuan aims to improve field productivity by 10 30% and ultimate gas recovery by 40 70%.
Environmental harm would be reduced and safety enhanced by more efficiently removing sulfur from sour gas streams and disposing properly of produced water and other field wastes.
MAJOR PROJECT COMPONENTS
About 98% of Sichuan's gas project funding is to be spent to upgrade and expand SPA's gas production components, including:
- 62% to drill about 100 wells, collect, process, and interpret 8,800 line km of seismic data, lay gas gathering lines, build gas dehydration and desulfurization plants, and develop waste disposal systems in 14 fields in eastern Sichuan with combined recoverable reserves estimated at 4.77 tcf.
- 15% to workover, recomplete, and stimulate about 100 wells in central Sichuan and 90 wells in eastern Sichuan.
- 12% to rehabilitate and environmentally upgrade SPA's gas transmission and distribution systems.
- 9% to expand SPA's gas transmission system.
The remaining 2% of project cost is to be used to build institutional components needed to restructure the province's upstream oil and gas sector and provide technical assistance and training required to implement the plan.
COMPONENT DETAILS
SPA's field development and rehabilitation is expected to hold Sichuan's gas flow at more than 280 bcf/year for 6 7 years into the next century.
The 100 development wells to be drilled in eastern Sichuan include 37 wells in Wubaiti field, eight in Shaguanping, seven each in Mingda and Longtou, six each in Shuangjiaba, Mopanchang, and Gaofenchang, five each in Yunhexhai and Woxinshuang, four each in Tanmuchang and Fengjiawan, two each in Tieshan and Wanshunchang, and one in Fuchengzai.
Flow rates of most wells slated for workover have declined severely or ceased because of lack of reservoir permeability, corrosion of bottomhole equipment, or sand influx.
The 100 wells to be reworked in central Sichuan are in Moxi and Bajiaochang fields, where combined reserves are estimated at 1.59 tcf, while the 90 wells to be reworked in eastern Sichuan are spread across 15 fields.
Cost of the project's seismic program is estimated at $38.6 million. It includes five seismic telemetry data acquisition systems and two processing and interpretation systems.
New seismic data are to include 2,200 line km of coverage in Wubaiti field, 1,700 line km in Fengjiawan, 800 line km in Mingda, 700 line km each in Tanmuchang and Shuangjiaba, 600 line km in Yunhexhai, 570 line km in Tieshan, 450 line km in Shaguanping, 430 line km each in Wanshunchang and Longtou, 420 line km in Mopanchang, and 230 line km in Woxinshuang.
SPA's gas transmission and distribution pipeline system supplies a combined 565 MMcfd of gas from five producing regions through 15 city gas companies to about 1 million residential, commercial, and small industrial customers and directly to about 600 large industrial plants.
The gas development and conservation project will hike capacity of SPA's pipelines in eastern Sichuan province by 140 145 MMcfd, allowing it to move reserves from the Wubaiti, Fengjiawan, and Mingda areas.
Top priority will be increasing capacity on the 173 km Lianglu pipeline that moves gas to Sichuan's urban centers from the province's eastern fields.
Facilities for that expansion include 35 km of 20 in. loop to be installed from Fuying to Naxi by yearend 1994 and a compressor station with two 5,000 hp centrifugal compressors to be added by 1996 southwest of Heijiang. Another 211 km of pipeline will have to be installed by yearend 1996 and 72 km by 1999, including 16 km of 10 in. loop from Wubaiti to Jiangzhi, 71 km of 18 in. loop from Wulonghe to Daosuiqiao, 124 km of 18 in. pipeline from Jiangzhi to Wulonghe, and 40 km of 10 in. pipeline from Fengjiawan to Wanxian.
GAS PIPELINE REHAB
Most of SPA's gas transmission and distribution pipeline system is 12 20 years old and prone to breakdowns, accidents, and leaks due to corrosion.
A $1.4 million United Nations Development Program (UNDP) preinvestment study, estimated SPA's gas infrastructure was leaking 1.063.53% of overall throughput, mostly during production and gathering. In addition, the UNDP study found reports of 110 gas pipeline failures or accidents on SPA's gas transportation system since 1978.
Internal corrosion resulting from release of sour gas into the transmission grid was deemed the most serious problem on the pipeline system. The study also found the pipeline's control system and SPA's operational organization prevented efficient responses to emergencies or rapid changes in operating conditions.
The UNDP study concluded the integrity of Sichuan's gas grid was questionable and recommended joint remedial action through two concurrent programs to avoid further deterioration of the system and increasing risks of worsening leakage and more accidents.
One program is to include rehabilitation and upgrading of SPA pipeline, measurement, corrosion control and inhibition, telecommunication, gas control, gas quality monitoring, and emergency response facilities, monitoring and evaluating the status of system deterioration, and installation of a supervisory control and data acquisition (Scada) system.
The other program will focus on reducing leakage through a series of environmental upgrades, including installing valves at gathering and transmission line vent stacks and chained caps or plugs on open ended pipelines; upgrading or replacing seals on control valves, compressors, and block valves; and implementing comprehensive gas leak detection and repair programs.
The combined programs are expected to reduce fugitive gas emissions by about 77,000 tons/year and allow Sichuan to curtail coal consumption by about 2.9 million tons/year by substituting gas. The latter would reduce emissions of sulfur dioxide by an estimated 171,080 tons/year, carbon dioxide by 2.3 million tons/year, nitrogen oxide by 6,100 tons/year, carbon monoxide by 64,985 tons/year, and ash by 948,300 tons/year.
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