![Page 1: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/1.jpg)
Arrow Energy CSG Development AusIMM April 2007
![Page 2: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/2.jpg)
Agenda
• CSG in Australia and Globally
• Arrow Energy
• Technical Challenges – Drilling and Completions
• Technical Challenges– Reservoir
• Technical Challenges – Facilities and Water Mgt
• Other Development Considerations
![Page 3: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/3.jpg)
Typical CSG Extraction
• Methane gas adsorbed into coal seams that can hold 5 times as much gas as an equivalent volume of sandstone
• Gas held in coals by hydrostatic water pressure
• Pumping water lowers the hydrostatic pressure and gas desorbs from the coals in cleats and fractures to flow to surface
Source OCA
![Page 4: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/4.jpg)
Coal Bed Desorption
• By drawing down hydrostatic pressure (dewater) gas diffuses from the micro pores into cleats and fractures.
• As water flow rates go down – gas production initially increases.
• But water drawdown has to be managed…
CBM and Water Production
0
20
40
60
80
100
120
140
160
180
200
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Years of Operation
MC
F o
f CB
M /
Day
0
1
2
3
4
5
6
7
8
9
10
Ga
llon
s o
f Wa
ter
/ Min
ute
CBM
Water
![Page 5: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/5.jpg)
Some Global CSG Resource Estimates
Resources / TCM
• North America 25• Russia/Ukraine 20-90• China 30• Indonesia 15• Australia 15• India 8
![Page 6: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/6.jpg)
Agenda
• CBM in Australia and Globally
• Arrow Energy
• Technical Challenges - Completions
• Technical Challenges– Reservoir
• Technical Challenges – Facilities and Water Mgt
• Other Development Considerations
![Page 7: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/7.jpg)
Arrow Energy Snapshot
• Founded in 1998, ASX listed in August 2000
• Successful merger with CH4 in 2006
• Current Market Capitalisation approx $1.2 Billion
• Developed and Operating 4 CSG fields
• Currently producing approx 65 TJ/d
• Aim to be producing 25% of QLD’s gas supply by the end of 2007
• Over 2 TCF certified reserves and > 20 TCF of total resource
• Pioneered Surface to In-seam drilling technology and gravel packed / under-reamed completions
• Commenced International operations based in Delhi, India in 2007
• Expansion of international interests – Indonesia, China, Vietnam
![Page 8: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/8.jpg)
Arrow Energy Tenements
• 80,000 sq. km. tenements
• Highly competitive position nearest to key markets and infrastructure
• High quality JV partners (AGL, Beach , CS Energy)
![Page 9: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/9.jpg)
Agenda
• CBM in Australia and Globally
• Arrow Energy
• Technical Challenges – Drilling and Completions
• Technical Challenges– Reservoir
• Technical Challenges – Facilities and Water Mgt
• Other Development Considerations
![Page 10: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/10.jpg)
Drilling and Completions
• Arrow – dual lateral in-seam drilling
– Vertical, multi-seam under-reamed & gravel packed
• Method depends on coals – thickness of seams, permeability, gas content,
depth etc
• Other methods investigated– case & frac, larger under-reaming
![Page 11: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/11.jpg)
Arrow Under-reamed Completion
Top of P roduction Zone
TD
Ground Leve l
S urface C as ing:273.1m m OD 6.4m m W T A P I5LHole S ize: 12 1/4"
S lo tted Cas ing:168.3m m O D 6.4m m W T A P I5L w /2.5m m Slo tsHole S ize : 9 7/8 " Underream ed to 16" over coals
Tub ing:2 7/8" J55 E UE 6 .5 #/FT
P C P um p
W ell D iagram
Liner to S urface
![Page 12: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/12.jpg)
Moranbah Surface to In-Seam Drilling
![Page 13: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/13.jpg)
Slant Drilling– Designed with medium
radius smooth entry into the coal.
– Either single or multiple in-seam wells per vertical well.
– In-seam well lengths up to 1200m.
– Many different well patterns possible, parallel, chevron, star.
– Drilling method either under-balanced or over-balanced.
– Rig mast is set at necessary entry angle (50°to 90°from horizontal),
– Intersection with vertical well is accomplished using magnetic guidance tool
![Page 14: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/14.jpg)
Other Drilling/Completion Issues
• Drilling fluids:– Water– Air– Foam
• Coal “don’ts”– Polymers– Cement
• Under-reamers or eccentric bits• Jetting – pressure and duration
![Page 15: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/15.jpg)
Agenda
• CBM in Australia and Globally
• Arrow Energy
• Technical Challenges – Drilling and Completions
• Technical Challenges– Reservoir
• Technical Challenges – Facilities and Water Mgt
• Other Development Considerations
![Page 16: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/16.jpg)
Reservoir Management –Essential Data
• Desorption curves• Isotherms• Permeability measurements• Coal thickness delineation• Proof of in-situ physical desorption and confirmation of
Critical Desorption Pressure• The rest is history matching and numerical analysis:
– Reservoir Modelling and history matching against test and production data
• Management of dewatering is critical – early gas breakthrough can decrease permeability to water and slow desorption away from wellbore – also related to well spacing
![Page 17: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/17.jpg)
Field Layout
• Well spacing– Determined by a combination of reservoir and
economic factors– For vertical well based field (Arrow Surat) this means
a compromise between initial production rates and life of well / economics together with GSA length and gas price
– For SIS based field (Arrow Bowen) more reservoir and coal mine plan issues
![Page 18: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/18.jpg)
Agenda
• CBM in Australia and Globally
• Arrow Energy
• Technical Challenges – Drilling and Completions
• Technical Challenges– Reservoir
• Technical Challenges – Facilities and Water Mgt
• Other Development Considerations
![Page 19: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/19.jpg)
2
6,6a
1
3
3
10
9
8,8a
4,4a
4,4a
4,4a
5,5a
7,7a
Facilities – Fit for purpose but with expansion potential
Legend1 –Inlet from Kogan North Gas Field (
2 – Plant inlet water knockout3 – Vent
4 – Compressor Skid Package
4a – Drained Bund
5 – Lube Oil and TEG Coalescer Skid
5a – Drained Bund6 – Waste Separation & Storage
6a – Containment Bund
7 – TEG Dehydration Package
7a – Drained Bund
8 – Waste water sump & pump8a – Containment Bund
9 – Site Amenities
10 – Tie-in point to RBP
![Page 20: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/20.jpg)
Water Management
Arrow is continually looking at ways to make beneficial use of the water produced in CSG extraction –particularly topical with the current extended drought
![Page 21: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/21.jpg)
Water Management - Options
• Coal Washing– Supply to local coal mines
• Feedlots– Supply for stock watering
• Construction– Dust suppression, earthworks
• Reverse Osmosis– Supply to Braemar Power Station– Supply to Dalby Council
• Forced / Static Evaporation– Reduce size of dams
• Aquaculture– Joint trial with the QLD DPI for fish farming
![Page 22: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/22.jpg)
Water Management - Forced Evaporation
CSG production water is forced through spray system to increase surface area and evaporation by 10 times over a static evaporation dam. Footprint reduced compared to static dam.
![Page 23: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/23.jpg)
Water Management - Aquaculture
![Page 24: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/24.jpg)
Agenda
• CBM in Australia and Globally
• Arrow Energy
• Technical Challenges – Drilling and Completions
• Technical Challenges– Reservoir
• Technical Challenges – Facilities and Water Disposal
• Other Development Considerations
![Page 25: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/25.jpg)
Other Development Considerations
• Cultural Heritage– ILUA with native title claimants– Cultural Heritage Management Plan
• Environment– EMP’s– Code of Environmental Practice
• Safety– Systems and procedures– Compliance with P & G Act
• Landholders & Community– Land access agreements with compensation– Communication protocols and community relations / support
![Page 26: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/26.jpg)
Other Development Considerations
• Overlapping tenure with Coal Mines– Coal Mines with ML under CMSH Act– Arrow with PL under P & G Act– Co-ordination agreements with clear communications
protocols and delegation of safety responsibilities is critical
– Finding balance between different business drivers• Miners driven by de-gassing immediately ahead of 5 year
mine plan, with cut-off on safety level of mining basis• Arrow driven by reservoir/GSA economics, together with
reserve-based economic well cut-off abandonment conditions
![Page 27: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/27.jpg)
Other Development Considerations
• Resources– Competition for drilling rigs– Staffing of rigs– Engineering rates high
• Many competing large projects• Shortage of qualified and experienced people
• Material supply cost increases and delays• Value adding downstream of pure gas supply
– Near field power generation (with environmental credits)
– Alternative sales products (LNG, GTL, CNG)
![Page 28: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/28.jpg)
Future Growth Potential ??
If we can grow our Barra this big, then we may be measuring our production in Kg, not TJ !!
![Page 29: Arrow Energy CSG Development - The AusIMM · Arrow Energy CSG Development AusIMM April 2007. Agenda • CSG in Australia and Globally ... • Commenced International operations based](https://reader031.vdocuments.site/reader031/viewer/2022022602/5b5382157f8b9a1f648bd180/html5/thumbnails/29.jpg)
Arrow Energy