Special Report: More CO2-EOR projects likely as new CO2 supply sources become available

Dec. 7, 2009
The number of US projects injecting carbon dioxide for enhancing oil recovery likely will increase as new CO2 supplies become available.

The number of US projects injecting carbon dioxide for enhancing oil recovery likely will increase as new CO2 supplies become available.

For example, in states on the US Gulf Coast, Denbury Resources Inc. continues to add pipelines for distributing CO2 to new fields.

Companies also have slated new projects for the northern portion of the Rocky Mountains and the Permian basin of West Texas and New Mexico. These projects will use new CO2 sources.

In Canada, Saskatchewan has two large ongoing projects that obtain CO2 from a coal gasification plant in North Dakota.

CO2 EOR

In the US, CO2 injection has accounted for recovering about 1.5 billion bbl of oil and US CO2 sales for EOR reached an estimated 3 bcfd in 2008 (Fig. 1).1

CO2 source fields provide most of the gas injected in North American EOR projects. About 83% comes from source fields, 10.6% from natural gas plants, 1.4% from fertilizer plants, 4.9% from coal gas synfuels, 0.1% from ethylene production.1

Fig. 2 shows current US CO2 sources and pipelines.

The amount of US remaining oil in place is large. A 2008 report said that, of the estimated 595.7 billion bbl of oil in place, only 195.7 billion bbl will be recovered with conventional means, leaving 400 billion bbl stranded in the ground (table).2 Of this, the report estimated that 87.1 billion bbl could be technically recovered with CO2 injection.

Oil & Gas Journal's last EOR survey (Apr. 21, 2008, p. 47) listed 100 ongoing CO2 miscible and 5 CO2 immiscible EOR projects. The enhanced oil production from these projects at the beginning of 2008 was 250,000 b/d. The survey also showed 12 new CO2-EOR projects would start during 2008-09.

An April 2010 OGJ article will update the EOR survey.

Most of the US CO2-EOR projects are in the US Gulf Coast, Rocky Mountains, and the Permian basin. In Michigan, Core Energy LLC operates several CO2-EOR projects that obtain CO2 from an Antrim gas processing plant.

US Gulf Coast

In the Gulf Coast, Denbury continues its phased expansion of CO2 projects (Fig. 3).

During third-quarter 2009, the company reported production of 24,347 bo/d from its CO2 projects, including an 829 bo/d production response from CO2 injection at Heidelberg field in Mississippi. Heidelberg is one of the fields in the company's Phase 2 expansion.

Denbury also reported production increases during third quarter as compared with the previous quarter, as follows:

• Tinsley (3,558 bo/d, a 5% increase).

• Soso (2,813 bo/d, a 9% increase).

• Lockhart Crossing (882 bo/d, a 26% increase).

• Cranfield (572 bo/d, a 69% increase).

From its Gulf Coast CO2 EOR operations, Denbury expects production to increase to 55,000-65,000 bo/d by 2016 (Fig. 4).

Recently the company completed the Delta pipeline and commenced CO2 injection at Delhi field in mid-November. It expects first tertiary oil production from Delhi in mid-2010

Green is another pipeline it has under construction. Denbury expects completion of the pipeline to Oyster Bayou field in Texas during first-quarter 2010 and the pipeline reaching Hastings field by late 2010. It plans to transport both natural CO2 and anthropogenic CO2 in the 320 mile, 24-in. pipeline from Donaldsonville, La., to Hastings field.

Denbury has purchase contracts with several planned industrial plants that will have CO2 available, if built, after 2013. These plants are in Louisiana, Mississippi, Kentucky, Illinois, and Indiana and could provide 1.6-2.1 bcfd of CO2, according to Denbury.

The company plans to begin CO2 injections at Oyster Bayou in mid-2010 with an initial production response expected in early 2011.

Denbury notes that its CO2-EOR operating costs during second-quarter 2009 were $20.86/boe, broken down as:

• $3.68/boe for CO2.

• $5.72/boe for power and fuel.

• $3.34/boe for labor and overhead.

• $2.00/boe for equipment rental.

• $1.36/boe for chemicals.

• $3.05/boe for workovers.

• $1.71/boe for miscellaneous.

Denbury also will continue to prove up Jackson Dome's probable CO2 reserves in 2010. It plans to drill the first of three delineation wells early in 2010. Its CO2 reserves estimate for Jackson Dome is 5.6 tcf proved, 3 tcf probable, and 2 tcf possible (Fig. 5).

Potential Midwest and Gulf Coast anthropogenic sources could increase available Gulf Coast CO2 supplies to more than 3 bcfd by 2016.1

Except for some sales to industrial consumers, Denbury uses all the CO2 produced from the Jackson Dome for its own projects.

Rocky Mountains

Since 1986, most CO2 for EOR projects in the northern Rocky Mountains has come from the ExxonMobil Corp.-operated Shute Creek gas processing plant in southwestern Wyoming.

Earlier this year (OGJ Online, June 29), Encore Acquisition Co. announced plans to purchase 50 MMcfd of CO2 for its Bell Creek EOR project in southeastern Montana from the ConocoPhillips-operated Lost Cabin gas plant in Fremont County, Wyo.

The project involves building compression adjacent to the plant and installing a 206-mile pipeline to transport compressed CO2 to Bell Creek. At Bell Creek, the company would reactivate 275 wells and drill as many as 75 more wells to establish a five-spot injection pattern.

Encore estimated the production response from 100% utilization of the available CO2 at more than 6,500 b/d by 2015, with output remaining at that level for 10 years.

Since that announcement, Denbury signed a merger agreement with Encore (OGJ, Nov. 9, 2009, p. 26).

Estimated recoverable oil from Encore's potential CO2-EOR projects are 30 million bbl from Bell Creek, 37 million bbl from Elk basin, 61 million bbl from South Pine, and 136 million bbl from other fields in the Cedar Creek anticline.

The Cedar Creek anticline is within 120 miles of Bell Creek. Shell Oil, the original South Pine operator, conducted a pilot CO2 flood in the field in the 1980s.

Two potential new sources for CO2 in Wyoming are from a proposed underground coal-gasification project in the Powder River basin and a coal gasification and liquefaction project near Medicine Bow, Wyo.

Linc Energy Ltd., Australia, plans to start a UCG pilot by mid-2011 from acreage it purchased from GasTech Inc. in the Powder River basin of northwest Wyoming.

Another project is the Medicine Bow Fuel & Power LLC facility that includes a coal mine adjacent to a coal-to-liquids plant, with the first phase slated to produce about 21,000 b/d of ultralow-sulfur diesel fuel.

These two projects could supply 335 MMcfd of CO2 for EOR in 2013.3

Another CO2 source that will become available in 2010 is completion of a $72 million expansion at ExxonMobil's Shute Creek gas processing plant. The expansion includes installation of 23,000 hp of CO2 compression for increasing CO2 sales by 110 MMcfd from the current 230 MMcfd.4 5

The Shute Creek plant in Lincoln County, Wyo., has a 700-MMcfd gas processing capacity and receives gas from LaBarge field in Sublette County, Wyo. Composition of the gas from La Barge is 66% CO2, 21% methane, 7% nitrogen, 5% hydrogen sulfide, and 0.6% helium.

The Shute Creek plant, the largest gas-sweetening plant in the world, produces 25-30% of the world's supply of helium, about 4 MMcfd, and injects the most acid gas consisting of 35 MMcfd of hydrogen sulfide and 25 MMcfd of CO2.4 5

La Barge is also the site of a $100 million pilot for demonstrating ExxonMobil's controlled freeze zone single-step process for CO2 separation. The company plans to start a pilot during 2010 and expects it to be a lower cost process that may make carbon capture and sequestration a more practical option for CO2 separated from natural gas.4 5

Currently ExxonMobil sells CO2 to five EOR projects in Wyoming and one in Colorado. The Wyoming projects are the Anadarko Petroleum Corp.-operated Patrick Draw (Monell Unit) and Salt Creek fields, Devon Energy Corp.-operated Beaver Creek field, and Merit Energy Co.-operated Lost Soldier and Wertz fields.

In Colorado, Chevron Corp. operates an EOR project in Rangely field that receives CO2 from Shute Creek.Wyoming has many potential CO2-EOR projects if enough CO2 became available. One estimate is that EOR projects in Wyoming could recover about 418 million bbl of oil with the injection of about 2.68 tcf of CO2.6

Permian basin

Fig. 7 shows the main CO2 sources and CO2-EOR fields in the Permian basin. Steve Melzer, a consultant in Midland, Tex., told OGJ that lack of additional CO2 has limited expansion and start of new CO2 injection projects in the basin.

The basin produces about 180,000 bo/d because of CO2 EOR.

Currently fields in the Permian basin receive about 1.6-1.8 bcfd of CO2. Kinder Morgan CO2 Co. operates McElmo Dome and Doe Canyon source fields in Colorado that have a capacity to produce about 1.3 bcfd, after the company finished a 200-MMcfd capacity expansion in early 2009.

Sheep Mountain source field in Colorado, operated by Occidental Petroleum Corp. (Oxy), is nearing depletion and delivers about 40 MMcfd to the basin.

Work continues in expanding CO2 production capacity at Bravo Dome in New Mexico, operated by Oxy. The field has a capacity to deliver 250 MMcfd to the basin.

Hess Corp. in the last year has developed West Bravo field to deliver about 110 MMcfd of CO2 for expanding injection in the residual oil transition zone in the San Andres formation. The zone lies below the original oil-water contact in Seminole field and now has a higher oil saturation than the depleted zones above.

Melzer noted that several companies are looking at expanding CO2 injection to residual oil transition zones in several of the main CO2-EOR fields in the Permian basin.

Another source of CO2 is the gas plants in the Val Verde basin that deliver about 80 MMcfd of CO2 to Permian basin projects.

Under construction in Pecos County, Tex., is the $1.6 billion Century gas processing plant. SandRidge Energy Inc., under an agreement with Oxy, will operate the CO2 extraction plant and associated CO2 compression and pipeline facilities. SandRidge will retain the separated methane, while Oxy will take the removed CO2. SandRidge expects completion of the first phase of the plant in 2010 and completion of the all three phases in 2011.

Oxy is the largest operator of CO2-EOR oil projects with 28 active projects in the Permian basin.

One company starting a new CO2-EOR pilot in the Permian basin is Legado Resources LLC in Goldsmith field, Ector County, Tex.

Another new project is in Katz field near Knox City, Tex.

Charles Fox, vice-president of Kinder Morgan CO2, told OGJ that Kinder Morgan has under construction a $36 million, 91 mile, 10-in. pipeline to transport CO2 from its operated Sacroc CO2-EOR project to Katz field.

Fox said the pipeline will have an initial 65-MMcfd capacity but that, if companies along the line show interest, Kinder Morgan could increase capacity to 200 MMcfd.

Kinder Morgan plans to invest $145 million in the Katz CO2-EOR project to increase its production to a 7,000 bo/d peak in 2015 from the current 600 bo/d, Fox said. He added that the project involves drilling 88 wells, which includes 45 CO2 injection wells, during the next 4-5 years. The company expects to start CO2 injection in late 2010 or early 2011.

Kinder Morgan also will be adding CO2 injection patterns to its CO2-EOR project in Sacroc. Fox said the goal is to keep production from Sacroc at a steady 30,000 bo/d.

The company also is continuing its immiscible CO2 pressure-maintenance project in Yates field. Fox said one of the main activities in the field is the drilling of 1,500-ft horizontal drain holes from existing wellbores. He said Kinder Morgan drilled about 60 drain holes in 2009 and plans to drill about the same number in 2010. Yates produces about 27,000 bo/d through gravity drainage.

Fox noted that CO2 may become more available in the Permian basin towards yearend 2010 and that this should result in several companies announcing new projects in the basin.

Canada

The Weyburn CO2 miscible flood in Saskatchewan remains the main CO2 flood in Canada, producing more than 18,000 b/d of incremental oil. Weyburn obtains its CO2 from the Dakota Gasification Synfuels plant, Beulah, ND. Current production from the field, with CO2 EOR, is at a 35-year high (Fig. 8). Cenovus Energy Inc., a spin-off company of EnCana Corp., now operates Weyburn.

Apache Canada Ltd. in 2005 started a full-field CO2 project in Midale field in Saskatchewan, also with CO2 purchased the from Dakota gasification plant. In a Mar. 6, 2009, update, Apache estimated that CO2-EOR adds to the field 46 million bbl of proven recoverable oil reserves and 22 million bbl of possible oil reserves.

References

1. Doll, T., Evans, T., and Melzer, L.S.. "North American CO2 Status," Third Annual CO2 Conference, Enhanced Oil Recovery Institute, Casper, Wyo., June 23-24, 2009.

2. Storing CO2 with Enhanced Oil Recovery, DOE/NETL-402/1312/01-070-08, Advanced Resources International Inc., Feb. 7, 2008.

3. Reyes, B., "Utilizing a Geographical Information System (GIS) for the Development of a Wyoming CO2 infrastructure, Third Annual CO2 Conference, Enhanced Oil Recovery Institute, Casper, Wyo., June 23-24, 2009.

4. Thomas, S., "LaBarge Field & Shute Creek Facility," Third Annual CO2 Conference, Enhanced Oil Recovery Institute, Casper, Wyo., June 23-24, 2009.

5. Parker, M., "Utilizing the LaBarge experience to support the global development of CCS," Third Annual CO2 Conference, Enhanced Oil Recovery Institute, Casper, Wyo., June 23-24, 2009.

6. Phillips, O.R., Van't Veld, K.T., and Cook, B.R., "Scoping Profitable CO2 Projects in Wyoming," Third Annual CO2 Conference, Enhanced Oil Recovery Institute, Casper, Wyo., June 23-24, 2009.

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