under ground storage of natural gas august 27, 2009 slide number - 1 of 48 engineers india ltd –...

Under Ground Storage of Natural GasAugust 27 , 2009

Slide Number - 1 of 48

Engineers India Ltd – Delivering excellence through people

UNDERGROUND STORAGE OF NATURAL GAS - AN OVER VIEW




Availability of energy at a steady rate and at a reasonable cost are vital for sustainable economic development of India.

Two basic reasons, why the use of natural gas as fuel source is expected to increase:

Natural gas is environment friendly

Reserves of natural gas are comparable to those of crude oil with much lower consumption levels, accordingly, natural gas could last longer than crude oil.

Overview




With about 8% current energy consumption contributed through natural gas, the projected demand is estimated to grow about 5% per annum upto 2025.

Projected demand for power generation and fertiliser plants is expected to grow manifold.

Energy outlook of India is on a definite transformation owing to recent gas finds.

Overview




Projected Gas Demand

2011-12 2020 2030

X Plan Estimates

64 BCM

India Vision 2000

65-71 BCM

HC Vision 2025 114 BCM 143 (2024-25) BCM

IEA 75 MMTOE 97 MMTOE

IRADe-PwC 116.9 BCM 218.7 BCM

Source: : IRADe-PwC Report Fuelling India’s Future (Early 2008 figures)




Intensive exploration for oil & gas through NELP

Exploration by national oil companies

Increasing recovery of oil & gas from existing fields by EOR technique

Exploring for alternative sources of hydrocarbons such as CBM, Gas Hydrates etc.

Acquisition of equity oil abroad

Augmentation of gas supply through import of LNG & trans national gas pipelines

Creating strategic & commercial reserves

Energy Security




Spurt in development & usage of CNG, both for transportation sector and domestic markets.

Disruptions in gas supply through proposed trans national pipelines

In line with the energy security mandate of common minimum programme of Govt. of India.

Strategic & commercial storage of natural gas will cater fluctuation in demand, besides providing a buffer against natural disasters, war or similar events that may affect the production or supply of natural gas.

Why Strategic & Commercial Storage of Natural Gas?




Industrial sectors

Automotive sectors

Residential + Commercial sectors

Gas based power generation

Fertilizer plants

Gas Infrastructure Drivers




Studies, so far

In pursuance of the objective of creating strategic storage of natural gas, Ministry of Petroleum & Natural Gas (Govt. of India) has already initiated action.

Engineers India Ltd. was assigned the task of preparation of the Pre-Feasibility Report. The PFR has been submitted to MoPNG /OIDB and is under active consideration on Govt. of India for further progress on the subject.




Over 400 Natural gas storages in U.S.A.

Over 600 Natural gas storages world wide

• 450 nos. in Depleted Reservoirs

• 80 nos. in Deep Aquifers

• 70 nos. in Salt Caverns

International Scenario




World Gas Storage Capacity – 340 MM m3




World Gas Storage Capacity – Volume Distribution




USA Gas Storage Capacity – Volume Distribution




Total Storage Capacity, MMcfTotal Storage Capacity, MMcf 8,255,042 8,255,042 Salt Caverns 2.9% 239,990Salt Caverns 2.9% 239,990Aquifers 15.0% 1,238,158Aquifers 15.0% 1,238,158 Depleted Fields 82.1% 6,776,894 Depleted Fields 82.1% 6,776,894

Total Withdrawal Capacity, Bcf/d 76Total Withdrawal Capacity, Bcf/d 76 Total Number of Active FieldsTotal Number of Active Fields 393 393

Salt Caverns 7.6% 30Salt Caverns 7.6% 30Aquifers 11.0% 43Aquifers 11.0% 43Depleted Fields 81.4% 320Depleted Fields 81.4% 320

USA Gas Storage Capacity – Volume Distribution




0

50

100

150

200

250

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Bcf

Source: US Energy Information Agency

USA Gas Cavern Working Capacity




0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Source: US Energy Information Agency

USA Gas Cavern Inventory Levels




UNDERGROUNDUNDERGROUND Have inbuilt safety to withstand attacks Have inbuilt safety to withstand attacks

during warsduring wars Resistant to fire hazards Resistant to fire hazards Economical for larger capacitiesEconomical for larger capacities

SURFACESURFACE Do not meet safety requirements Do not meet safety requirements

to withstand enemy attacks during to withstand enemy attacks during wars wars

Vulnerable to fire hazards as a Vulnerable to fire hazards as a result of mal-operations and result of mal-operations and accidentsaccidents

Occupy large area of valuable landOccupy large area of valuable land

Surface Vs. Underground Storage




Types of Sub-surface Storage of Gas

Sub-surface storage of Gas

H2, CO2 , CO, etc. Coal Gas Natural Gas

Void SpacePorous Media

Deep AquifersDepleted Reservoirs

Salt DomesGas FieldsOil Fields Salt Layers

Abandoned Mines

Mined Caverns Dissolved Caverns




Underground storage of Natural Gas

Total gas storage capacity is the maximum volume of

natural gas that can be stored at the storage facility.

Base gas (also referred to as cushion gas) is the

volume of gas that is intended as permanent inventory

in a storage reservoir to maintain adequate pressure

and deliverability rates throughout the withdrawal

season.

Working gas capacity is the total gas storage capacity

minus the base gas.





Physically unrecoverable gas is the amount of gas that

becomes permanently embedded in the formation of

the storage facility and that can never be extracted.

Cycling rate is the average number of times a

reservoir’s working gas volume can be turned over

during a specific period of time. Typically the period of

time used is one year.




Schematic Diagram for Storage Types

The principle of storage in depleted reservoir is simple, because the reservoir formerly contained gas or oil. Hence it satisfies the permeability & porosity conditions required for storage.

However, before developing a gas storage in a depleted field, it is indispensable to check whether it corresponds to required withdrawal rate and imperviousness of the cap rock.

DEPLETED OIL / GAS RESERVOIR





The predominant type of underground storage of natural gas consists of depleted gas / oil reservoir.

This type of storage is the cheapest and easiest to develop, operate and maintain.

The cushion gas for depleted reservoir storage option is high (about 50%).

DEPLETED OIL / GAS RESERVOIR





SALT CAVERN

The principle of storage in salt caverns involve dissolving salt with fresh water and removing the brine through a process, called as Solution Mining.

However, before developing a gas storage in a salt formation, establishment of its geologic characteristic features determining its suitability is important.





Underground salt formations both salt domes / bedded salt formations offer option of natural gas storages called as salt cavern storages.

Though the process of creating the cavern is relatively expensive, once created the salt caverns offer a high deliverability. The cushion gas component in this option is low (about 30%).SALT CAVERN





DEEP AQUIFER

The principle of storage in deep aquifers is to create an artificial gas field by injecting gas into the voids of an aquifer formation.

Therefore, geologic conditions such as an anticline with sufficient closure, a porous and permeable reservoir and excellent quality cap rock are prime requisites.





Deep Aquifer formations need confirmation to be used as natural gas storage.

As these facilities are more expensive than the depleted reservoir types, the deep aquifer storages are usually taken up in areas where there are no depleted reservoir options and that the sub-surface geology of the area suits the requirements. DEEP AQUIFER





underground storage of natural gas is

mainly located within Sedimentary Basins




Sedimentary Basins of India

Sedimentary Basins of India

occupy 3.14 M Sq.Km.

0.39 M Sq. Km. is in Offshore up

to 200m water depth.

1.35 M Sq. Km. is in deep waters

beyond 200m.

1.40 M Sq. Km. is in Onshore.

India is endowed with 26 major sedimentary basins of an estimated 50,000m thick Sediments.

Source : DGH




Aspects for Storage Performance

Verification of Inventory Verification of Inventory ((CapacityCapacity)) Containment against Migration Containment against Migration ((Operating ParametersOperating Parameters)) Assurance of Deliverability Assurance of Deliverability ((EfficiencyEfficiency))




Approach for Regional Assessment

Reconnaissance SurveyReconnaissance Survey Regional Geological SettingRegional Geological Setting Regional Ground Water TableRegional Ground Water Table




Parameters vis a vis Types of storages

Deep AquifersDeep Aquifers

Salt CavernsSalt Caverns

Depleted Reservoirs Depleted Reservoirs

Anticlinal GeometryAnticlinal Geometry

Stratigraphic LensesStratigraphic Lenses

Faults / Structural TrapsFaults / Structural Traps

Self Healing Salt FormationsSelf Healing Salt Formations

Depleted / Marginal ReservoirsDepleted / Marginal Reservoirs




Reservoir Characteristics

Porosity Porosity Directional PermeabilityDirectional Permeability

Vertical MigrationVertical Migration Horizontal MigrationHorizontal Migration




Reservoir Characteristics

Porosity

Permeability in %

in milli darcies

Storage Media 6-35 0.01-7,000Sand StoneSand StoneFractured LimestoneFractured Limestone

Impervious Caprock 1-12 zero-0.0001ShaleShaleLimestoneLimestoneAnhydriteAnhydrite




Critical Issues for Deep Aquifers/Depleted Reservoirs

Geometric ShapeGeometric Shape

Inverted Saucer preventing vertical and lateral migrationInverted Saucer preventing vertical and lateral migration

Caprock MatrixCaprock Matrix

Permeability, Porosity and Threshold PressurePermeability, Porosity and Threshold Pressure

ContinuityContinuity

Freedom from anomaliesFreedom from anomalies

Leakage DetectionLeakage Detection

Tracer StudyTracer Study




Salt Cavern Storage

FeaturesFeatures

Large volumeLarge volume

Hydrocarbon liquids & gas, compressed Hydrocarbon liquids & gas, compressed air, hydrogenair, hydrogen

Impermeable containmentImpermeable containment

AdvantagesAdvantages

Less costly (larger scale)Less costly (larger scale)

Excellent physical securityExcellent physical security

Lower environmental impactsLower environmental impacts

DisadvantagesDisadvantages

Geological limitationsGeological limitations

Longer to constructLonger to construct




Salt Cavern Storage

Benefits for natural gas storageBenefits for natural gas storage Salt provides an impervious barrierSalt provides an impervious barrier Very high deliverabilityVery high deliverability Good [ working gas : total gas ratio ]Good [ working gas : total gas ratio ]




Key Design Elements - salt cavern storage

Cavern and well integrityCavern and well integrityGeomechanical stabilityGeomechanical stabilitySalt creeping and convergenceSalt creeping and convergenceCavern separationCavern separationSurface subsidenceSurface subsidenceMaximum operating pressureMaximum operating pressureMinimum operating pressureMinimum operating pressureCavern shape, roof spanCavern shape, roof spanWeb or pillar widthWeb or pillar width




Typical Salt Cavern Storage Characteristics

Bedded Salt CavernsBedded Salt Caverns SizeSize

50 000B to 1 MMB50 000B to 1 MMB DepthDepth

Top of Salt: 500’ – 1,000’Top of Salt: 500’ – 1,000’ Depth to Roof: 500’ – Depth to Roof: 500’ –

3,000’3,000’ Short and SquatShort and Squat

Cavern Height: 30’ - 300’Cavern Height: 30’ - 300’ Diameter: 75’ – 300’Diameter: 75’ – 300’

Domal Salt CavernsDomal Salt CavernsSizeSize

2 to 15 MMB (& larger)2 to 15 MMB (& larger)DepthDepth

Top of Salt: 500’ – Top of Salt: 500’ – 2,000’2,000’Depth to Roof: 2,000’ Depth to Roof: 2,000’ – 4,000’– 4,000’

Tall & SlenderTall & SlenderCavern Height: 500’ – Cavern Height: 500’ – 2,500’2,500’Diameter: 75’ – 300’Diameter: 75’ – 300’




Salt Dome StorageSalt Dome Storage




BEDDED

DOMAL

US Salt Deposits US Salt Deposits




Large Aquifer offers the maximum potential storage capacity.

Deliverability from a Salt Cavern Storage is rated higher than other options

Therefore, when the two storage attributes, the Inventory (capacity) and the Deliverability are considered in relation to specific requirements of energy markets, it is clear that both Aquifer storage and Salt cavern storage command their respective justifications in economic desirability.

Attributes of Underground Storage




Underground Storage of Gas

Terminaling Storage Transmission

Trans-National Pipelines

Trans-shipment of LNG Through

Sea Port

Underground Strategic /

commercial Storage

National Gas Grid

Access Pipelines to the Grid

Regional Underground

Storage Hubs




Present consumption is about 65 MMSCMD (as of 2008) of natural gas supplied to the consumers.

About 40% of NG is used for power generation,

28 % for fertilizer and balance

32% for uses such as industrial, residential etc.

The 10th Plan document predicted increase in natural gas consumption from present 65 MMSCMD to 130 MMSCMD- double the consumption level in five years.

Vision 2025 document envisages consumption level of Natural Gas is expected to rise to 391 MMSCMD.

Strategic /Commercial Storage of Natural Gas




National Gas Grid

Development of Strategic / Commercial Gas Storage along with National Gas Grid will cater to energy integration of the nation.




Based on the geology of the Indian sub-continent, and with a design basis that all strategic gas inventories should be located as near as practical to existing and planned gas transmission pipelines, initially ten prospective areas were identified :

Based on the desk studies of available literatures, geological maps etc. seven sites were retained for further studies.

The seven sites were comparatively ranked using a weighted scale of evaluation factors, where in the first four sites have been subsequently selected and are ranked as follows:

1. North Gujarat (Depleted / Marginal Reservoirs)

2. Bikaner (Salt Cavern)

3. Kota (Deep Aquifer)

4. Bhubaneswar (Deep Aquifer)

Pre-Feasibility Studies




In order to maximize the storage capacities at each of the candidate sites to the extent possible, with the intention of storing the proposed 3 BSCM of natural gas at each site, an assessment was made through the PFR studies.

The study revealed that while it is possible to store 3 BSCM in salt caverns at Bikaner and in depleted reservoirs in North Gujarat individually, the maximum capacities at Kota & Bhubaneswar are of the order of 1250 MMSCM.

While a published report from Geological Survey India outlines a detailed account of the bedded salt formation reported in the North Western part of Rajasthan, a recent study by ONGC reveals the details of salt formation in and around Sri Ganganager Dist. Rajasthan.





An attempt was made in this study, to identify the depleted reservoirs that could be made available for storage of natural gas. However, several operators have declined to part with the reservoirs in the anticipation of enhanced oil recovery.

Thus it has been suggested by MoPNG that a mechanism should be in place so as to define the depleted reservoirs through a due diligence and subsequent relinquishment.

As of the salt cavern storage, the MoPNG / OIDB observed that the possibility of locating both the crude oil and natural gas storages at Bikaner should be explored further.





In India, interest in under ground gas storage, which is a relatively recent technique, has been developing rapidly. It can become an essential part of the gas chain.

Stimulated by the changes taking place in the gas market, application of underground storage of natural gas is expected to intensify.

The expected growth in gas demand, increased dependence on imports and the growing need for flexibility will strongly influence future storage requirements.

In addition, the storage infrastructure is gradually offering new opportunities (new services, storage for third parties, storage for transit), enabling the owners of the facilities to strengthen their position on the market.

Conclusion

under ground storage of natural gas august 27, 2009 slide number - 1 of 48 engineers india ltd –...

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