Shale Gas & Oil: Global Implications for our Energy Future Dr - - PowerPoint PPT Presentation

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Shale Gas & Oil: Global Implications for our Energy Future Dr - - PowerPoint PPT Presentation

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Shale Gas & Oil: Global Implications for our Energy Future Dr Basim Faraj Faraj Consultants Pty Ltd Brisbane, Australia Petroleum Exploration Society of Australia (PESA) (Queensland Branch) Hilton Hotel Brisbane 190 Elizabeth Street,

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Shale Gas & Oil: Global Implications for our Energy Future

Dr Basim Faraj

Faraj Consultants Pty Ltd

Brisbane, Australia Petroleum Exploration Society of Australia (PESA) (Queensland Branch) Hilton Hotel Brisbane 190 Elizabeth Street, Brisbane Qld 4000 8th February, 2018

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Outline

  • Global affordable energy is the key to human progress
  • Shale gas/oil production and consumption
  • Shale gas/oil systematics
  • Modern shale technology yielding tremendous results
  • US Shale and global LNG
  • Role of Australia’s energy industry
  • Summary and recommendations
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  • By 2040, world population is expected to reach 9.1 billion, up from 7.3

billion in 2017.

  • Over that same period, global GDP will effectively double to US$150

Trillion! This economic expansion, coupled with growing numbers of people, will help drive up global energy demand by about 25% by the year 2040.

  • Middle Class will more than double by 2030 to reach almost 5 billion
  • people. India and China will have about 1 Billion of Middle Class each!
  • The World will need to pursue all economic energy sources to keep up

with this considerable demand growth.

  • Oil and natural gas will likely be nearly 60% of global supplies in 2040,

while nuclear energy and renewable (hydro, wind, solar etc) will grow by about 50% and approaching a 25% share of the world’s energy mix.

Source: ExxonMobil energy outlook to 2040, 2018

Global drivers for energy demand

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SLIDE 4

ExxonMobil 2011, 2017 “outlook to Energy- A view to 2040”

Biomass Coal Oil Gas ~75% Fossil Fuel! (by 2040)

1800 1900 2000

Global energy mix through time

2040

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SLIDE 5

Great many basins within the markets!

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Across the US (lower 48), there are more than 210 pipeline systems that total more than 305,000 miles of interstate and intrastate pipelines.

Map of US natural gas pipelines

EIA, 2018

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NASA, 2018

Thou shale be light!

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SLIDE 8

8

Size does matter!

Play Gas In Place Est. (TCF) Barnett 2,100 Eagle Ford 2,100 Haynesville 1,800 Marcellus 4,700 Montney 5,700 Total 16,400 Sources: US EIA 2013, US DOE 2009, Encana 2009, USGS, OilandGasInfrastructure.com

Source: Tamboran Estimate modified from Deloitte LLP and Core Lab, 2013

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Shale/tight rock contributed ~60% of total gas production of (74bcf/d!). 40% of total oil production (10.59 Million bbl/d) (2017)

3 bcf (5%) 2005

60% 2017

(million bbl/d

40%

Source: EIA, 2017: 2016 Intellectual Capital Conference | Oil and natural gas: market

  • utlook and drivers May 25, 2016

The significance of shale gas/oil production in the US

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Crude Production 2017: Opec 39.31, Non-Opec 58.66= 97.97 Million bbl/d Crude Consumption 2017: 98.31 Million bbl/d. Projection to nearly balance at ~100 Million bbl/d in 2018.

World liquid fuels production and consumption balance

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Source: Baker Hughes data and Oil Price, January, 2018

1609 (27.5.2014) (WTI US$ 107/bbl) 316 (10.10.2016) (WTI US$ 44/bbl) (-82% within 17 months!) (Price dropped by 60%) 1609

Oil Rigs Gas Rigs

638 (-60%, 9 months) (WTI US$ 50/bbl) (17.7.2015)

81

(5.8.2016) 2/mcf

936

(14.10.2011) 4/mcf 10/1/2018

The horror graph of the oil producers!

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Permeability (mD)

0.001 0.01 0.1 1.0 10.0

Extremely Tight Very Tight Tight Low Moderate High

Conventional Tight Tighter than Tight

Granite Montney Barnett Sidewalk Cement 0 % porosity Limestone General oilfield rocks

0.0001

Good Shale

12

Modified by B. Faraj after DOE, 2007

Darcy’s Law Fick’s Law

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Shale gas reservoirs micro-texture

20 µm

Marcellus Shale

pores ~ 5 µm (2572 m depth)

25 µm

(Eagle Ford Shale)

pores < 5 µm (4110 m depth)

Micrographs are from Core Lab shale gas Consortium, 2013

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Parameter Whole Beans Ground Beans # Coffee Beans 200

16 gm 16 gm

Surface Area

(1 coffee bean/1 cm2)

0.02 m2 800 m2

(50 m2/gm)

Caffeine Diffusion Time 1 Second

40,000 Seconds!

  • r 11 hours!

Coffee Making and Shale Gas!

Concept by Basim Faraj, 2007 (Measurements from Arizona State University)

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N

Faraj and Brown, 2009

Leaving too much resource in the ground!

IP:4.5 MMcf/d Recovery: ~17%! (Montney Shale, WCSB)

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2,000 ft Recovery: 60 %! IP: 43 MMcf/d!

Advancement in shale gas recovery

(Utica Shale)

Clawson, 2015

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Modern technology yielding tremendous results

Examples of modern technology advancement:

  • longer laterals - proportionately reduced well costs
  • shorter stages - improved eur/ft
  • short cluster spacing - improved eur/ft
  • more water and sand - improved eur/ft
  • closer well spacing - more eur/section (but lower per well

recovery factor)

  • pinpoint drilling targets - focus on keeping bit in specific part
  • f the reservoir - more eur/ft
  • stacked laterals in thicker reservoirs - more eur/section
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The Permian Basin: The jewel of the crown! The Wolfcamp structure

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The Permian Basin is an awakened Giant!

Matador 2018

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Matador 2018

The Permian Basin has 1000’s of ft of hydrocarbon saturated rocks!

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Midland Basin, Wolfcamp A oil window

(Howard County, Midland Basin)

SM Energy, 2018

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The Giant Marcellus/ Utica shales

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Antero Resources, 2016

Example of innovation in cost cutting & mitigation of environmental impact: Integrated frac water business!

US$ 500,000 savings per well!

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Longer laterals yield better economics

Antero, 2018

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Longer laterals yield better economics

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As a result of the shale gas revolution, the US now has all the gas it needs! Next stop, major LNG export!

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2015: Global LNG Capacity: (294.5 mtpa) 39.9 bcf/d 2025: Global LNG Capacity: (477 mtpa) 64.6 bcf/d. A 38% increase!

LNG has a bright future!

(projected liquefaction capacity)

International gas union, 2017

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North American LNG Import/Export Terminals

Approved

Import Terminals

U.S.

APPROVED - UNDER CONSTRUCTION - FERC

  • 1. Corpus Christi, TX: 0.4 Bcfd (Cheniere – Corpus Christi LNG) (CP12-507)

APPROVED – NOT UNDER CONSTRUCTION - FERC

  • 2. Salinas, PR: 0.6 Bcfd (Aguirre Offshore GasPort, LLC) (CP13-193)

APPROVED - NOT UNDER CONSTRUCTION - MARAD/Coast Guard

  • 3. Gulf of Mexico: 1.0 Bcfd (Main Pass McMoRan Exp.)
  • 4. Gulf of Mexico: 1.4 Bcfd (TORP Technology-Bienville LNG)

Export Terminals

U.S.

APPROVED - UNDER CONSTRUCTION - FERC

  • 5. Hackberry, LA: 2.1 Bcfd (Sempra–Cameron LNG) (CP13-25)
  • 6. Freeport, TX: 2.14 Bcfd (Freeport LNG Dev/Freeport LNG Expansion/FLNG

Liquefaction) (CP12-509) (CP15-518)

  • 7. Cove Point, MD: 0.82 Bcfd (Dominion–Cove Point LNG) (CP13-113)
  • 8. Corpus Christi, TX: 2.14 Bcfd (Cheniere – Corpus Christi LNG) (CP12-507)
  • 9. Sabine Pass, LA: 1.40 Bcfd (Sabine Pass Liquefaction) (CP13-552)
  • 10. Elba Island, GA: 0.35 Bcfd (Southern LNG Company) (CP14-103)

APPROVED – NOT UNDER CONSTRUCTION - FERC

  • 11. Lake Charles, LA: 2.2 Bcfd (Southern Union – Lake Charles LNG) (CP14-120)
  • 12. Lake Charles, LA: 1.08 Bcfd (Magnolia LNG) (CP14-347)
  • 13. Hackberry, LA: 1.41 Bcfd (Sempra - Cameron LNG) (CP15-560)
  • 14. Sabine Pass, TX: 2.1 Bcfd (ExxonMobil – Golden Pass) (CP14-517)

Canada

APPROVED – NOT UNDER CONSTRUCTION

  • 15. Port Hawkesbury, NS: 0.5 Bcfd (Bear Head LNG)
  • 16. Kitimat, BC: 3.23 Bcfd (LNG Canada)
  • 17. Squamish, BC: 0.29 Bcfd (Woodfibre LNG Ltd)
  • 18. Prince Rupert Island, BC: 2.74 Bcfd (Pacific Northwest LNG)
3 4 6 7 1,8 15 9 16

US Jurisdiction

FERC MARAD/USCG

As of January 24, 2018

5

2

17 11

Trains 5 & 6 with Train 5 under construction

12 13 10 18 14

8.95 (bcf/d (66 mtpa) 6.79 bcf/d (50 mtpa)

Total potential capacity: 15.58 bcf/d! (115 mtpa!) in the next 10 years or so!

FERC, 2018

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Cheniere Energy, plant as of September 30, 2017

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Cheniere, 2018

LNG facilities are well-connected to the low cost shale gas resources

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US shale gas LNG going global!

Cheniere, 2018

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Cheniere, 2018

US LNG is very low cost!

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Global Shale Basins are ubiquitous But; properties and economics are vastly Different!

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Australia unconventional remote basins are a huge challenge and severely disadvantaged

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  • Clean, affordable energy is key to human progress. Natural gas

is key to that progress.

  • Shale gas science and engineering are progressing rapidly in

the US. As a result; the US is poised to be the superpower of energy and in a few years will be self-sufficient!

  • By 2025 the US will be one of the top 3 LNG exporting
  • countries. US LNG Gas is indexed to Henry Hub as opposed

to the volatile oil price index!

  • Shales are ubiquities globally; but the challenge is to make

economic shale gas/oil business out of it!

Summary

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Recommendations

  • Best chance of success on unconventional is in areas
  • f established infrastructure. Remote basins are

doomed for the foreseeable future. (example Horn River Basin)

  • Aggressive adaptation of lessons learned from the US

are a must for success. Cost is a huge problem. Can be augmented by increased recovery. Better and bigger fracs.

  • TRV or total rock volume approach is highly

recommended.

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“The revolutionary concept of hydrocarbon production from shale is without a doubt, the most exciting accomplishment of geosciences & petroleum engineering integration in the last several decades. This revolutionary concept is a bright chapter of innovation from the oil and gas industry that is providing the most needed commodity to the World: Affordable, Clean Energy.”

Basim Faraj- Geoscientist, 2009

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George Mitchell – the shale revolutionary

December 15, 2010

https://youtu.be/infetIpLoq4

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May The Shale Be With You!