QGC prepares for commercial production, anticipates big reserves boost from Lauren

QUEENSLAND Gas Company has suspended testing and has shut-in the five-well Argyle East coalbed methane pilot, awaiting commercial development, and has reported that initial flows from its Lauren-3 well could lead to an increase of over 30% in recoverable gas from QGC’s Surat Basin acreage.
QGC prepares for commercial production, anticipates big reserves boost from Lauren QGC prepares for commercial production, anticipates big reserves boost from Lauren QGC prepares for commercial production, anticipates big reserves boost from Lauren QGC prepares for commercial production, anticipates big reserves boost from Lauren QGC prepares for commercial production, anticipates big reserves boost from Lauren

With over 1.1 trillion cubic feet of proved, probable and possible gas now certified from ATP’s 620P (Argyle) and 632P / PL201 (Berwyndale South), commercial production is scheduled to start in the first half of next year.

Proved and probable (2P) reserves are sufficient to meet both of the long-term sales contracts with Incitec Pivot Limited and CS Energy Limited as well as the fuel requirements for both of QGC’s proposed power stations at Chinchilla and the Port of Brisbane, according to QGC.

Production testing of Berwyndale South pilot wells 9 and 14 in PL201 will continue. These twin holes in composite fashion, recover gas from the full Juandah coal sequence. Together they are currently producing at more than 1.5 million cubic feet per day (cfd).

Berwyndale South-9 is flowing gas unassisted, that is, without pumping, at more than 1 million cfd using a natural “gas lift”. This technique may be capable of wider application on the Undulla Nose and could effectively decrease both capital and operating costs, according to managing director Richard Cottee.

“Gas lift technology has been used successfully in the USA though it has not been used widely in Australian coal seam gas operations,” he said.

“Any reduction in pumping requirements would have a major impact in both capital and operating costs – savings in the order of 20% have been achieved in other operations. This will be thoroughly evaluated.”

QGC general manager operations and production Mike Herrington said his experience in the San Juan Basin’s Southern Ute and WAW fields indicated that gas lift technology could significantly reduce initial capital costs and subsequent operating and direct lifting costs.

“Because of the relative permeability and the production profile of these types of reservoirs, the gas to water ratio increases to a point that reservoir energy, used properly, is adequate to remove water from the wells,” Herrington said.

“Gas lift is a method for using that energy efficiently.”

Meanwhile, results from the Lauren mini-pilot have boosted hopes that the company can successfully tap additional coal seams, to increase its reserves by as much as 30%.

Drilled in February 2005, Lauren-3 was designed to independently test the Taroom seams. The well only began producing gas in April 2005 but gas flows have increased markedly to reach 294,000 cfd over the last week, with daily readings as high as 332,000 cfd in recent days, according to QGC.

Managing director Richard Cottee said the success of Lauren-3 would let QGC design and test a well completion strategy to access the deeper Taroom seams in addition to the present gas reserves, all of which are assigned to the Juandah seams.

The Taroom coal seams are widespread, occurring across the geological feature known as the Undulla Nose, Cottee said.

“On the basis of the results of Lauren-3, tapping the Taroom seams as well as the Juandah seams could increase the overall recoverable gas by 30%,” he said.

“Furthermore, the incremental cost associated with the Taroom gas will be much lower as it can be developed through the deepening of existing wells rather than requiring separate drill holes.”

QGC last week announced an upgrade of certified proved and probable (2P) gas reserves across the Undulla Nose to 470 petajoules (PJ), with a further 704 PJ of possible reserves. These reserves have been attributed to the Juandah Coal sequences, with no Taroom seams.

The increased certified reserves are already sufficient to meet the two initial 10-year gas supply contracts negotiated by QGC as well as the company’s proposed two new power stations at Chinchilla and Gibson Island at the Port of Brisbane.

Lauren-3 is one of three wells comprising the Lauren mini-pilot located 10km south-west of the Argyle pilot in ATP 620P.

ATP 620P is owned 59.375% by QGC and 40.625% by Pangaea Oil & Gas Pty Ltd; ATP 632P/PL201 is owned 100% by QGC.

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