Could subsurface steam generation revolutionize the Lloydminster heavy oil play?

Could subsurface steam generation revolutionize the Lloydminster heavy oil play?

By Godfrey Budd

Aug. 11, 2016, 8:02 a.m.

http://www.jwnenergy.com/article/2016/8/could-subsurface-steam-generation-revolutionize-lloydminster-heavy-oil-play/

 

What looks set to be the first successful downhole steam generation system for thermal heavy oil production is now operating as a commercial demonstration project at Buzzard, Sask.

Unlike conventional thermal recovery systems that inject steam generated at the surface, a proprietary technology called Solvent Thermal Resource Process (STRIP) is applied in which the steam is created downhole.

With STRIP, a gas-fired burner attached to a casing string with multiple concentric tubing strings that carry oxygen, methane, nitrogen and water is installed through a vertical well at the top of the reservoir. The downhole burners—think upside down Bunsen burners—rely on oxygen and methane for combustion. Not only does this eliminate surface emissions of CO2, but the use of oxygen, instead of air, which is about 80 per cent nitrogen, ensures a pure stream of CO2 that enhances oil recovery, the company says. Water injected through the casing string cools the burner shroud as it flows by and vapourizes into steam.

RII has a strategic relationship with Praxair, which supplies oxygen for the burners. The pressurized nitrogen in the casing string is part of a safety system that warns the operator of a pressure change that can signal that a shut down of operations is required.

As there is no need for once-through steam generators and other related equipment at the wellhead, capital costs for surface infrastructure are sharply reduced.

Attempts to develop a downhole steam generating system for thermal recovery were first made as far back as the 1980s, says Jeffrey Schneider, executive vice president at RII North America, a privately held Calgary oil company that owns the North American property rights for the STRIP enhanced oil recovery technology.

The earlier downhole systems involved wellbore steam generation, in which steam is generated inside the casing. Corrosion and mechanical failure bedevilled this approach, however, and there were other problems. Very hot steam and pressure levels in the confined space of seven-and-a-half-inch casing could impose disproportionate stresses on the steel string.

“You could do it, but the BTU [British thermal unit] output was limited,” Schneider says.

With STRIP, the water in the string is injected from above onto and around the burner shroud. Besides creating steam, the downward flowing water has a role in preventing mechanical components from overheating.

“The cavity at the bottom of the casing can be reamed out to expand it and provide space for steam. The steam is created outside and below the casing. The concept has a ‘why didn’t I think of it before?’ quality,” Schneider comments.

It was his father, Fred Schneider, founder, president and chief executive officer of RII, who invented STRIP. He is not a professional engineer, but acquired lots of experience in debottlenecking operations and is described by his son as “very hands-on, with lots of field and head office experience. When facing a challenge, his approach is often to step back and look for a simpler way.”

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Since the 2000s, Fred Schneider has often worked as a troubleshooter, helping clients dealing with technical issues and cost overruns on SAGD facilities, among other projects.

Increased recovery and lower operating costs

Besides lower infrastructure costs, he says STRIP technology promises some other very significant benefits—both for those who use the technology and the reputation of the Canadian heavy oil sector. First, RII believes the technology can raise recovery rates in some heavy oil reservoirs to as much as 45 per cent. Also, because the steam is generated at the reservoir and does not have to be pumped along hundreds of metres of pipe, thermal injection operating costs are reduced by 50 per cent. Surface steam generation is “inherently inefficient” and about 50 per cent of the thermal energy of the steam is lost in transporting it to the reservoir, according to Sustainable Development Technology Canada (SDTC).

Overall, using STRIP for thermal projects can save around 70 per cent in capital costs and result in energy savings of about 30 per cent or more, compared to surface steam generating processes, Schneider says.

Cleaner oil

RII has spent about $50 million developing STRIP technology. The improved efficiencies of its process and its reductions in greenhouse gas emissions enabled RII’s pilot project, of which the Buzzard commercial demonstration is Phase 2, to receive funding from SDTC.

“STRIP has the potential to help reposition Canadian oil as a cleaner, more environmentally responsible alternative to oil produced elsewhere, unlock an estimated 100 billion barrels of heavy crude left behind in legacy fields, and increase recovery factors in those fields from five to 10 per cent to as much as 40 per cent,” says the SDTC.

Prior to the field pilot, validation of the STRIP technology included some testing at Sandia National Laboratories, which is run by a subsidiary of Lockheed Martin for the U.S. Department of Energy.

Pilot status

Phase 1 of the pilot was a “proof of concept” field test that was done at a wellsite north of Neilburg, Sask., in the middle of a series of heavy oil properties operated by Rock Energy. In conjunction with the operator, RII converted an existing cold heavy oil production with sand (CHOPS) well to a STRIP injection well, with no modifications required for the existing casing. Testing began in March 2014 and continued for several months with promising field results.

Phase 2, the Buzzard operation, which is underway, is a commercial demonstration, described by SDTC as a “proof of production” phase. The legacy field has a large proportion of older wells, many of them predating CHOPS and progressing cavity pump technologies, some of them drilled in the 1970s and early 1980s.

Operations at the Buzzard demonstration project currently include one horizontal and six vertical wells in production, a vertical injector and what Schneider describes as “one horizontal conduit that allows you to control injection pressure and improves access of steam to the reservoir.”

Three of the six vertical producers are legacy wells and the other three are new infill wells, which provide a tighter well pattern.

“We’re very optimistic about production numbers. This is a very scalable technology,” Schneider says.

He adds, “Because we’re using pure oxygen, we get a pure CO2 stream in the produced oil. This allows us to capture the CO2 and re-inject it, helping with incremental production of up to 45 per cent, based on simulations.”

Besides breathing new life into conventional heavy oil wells close to or at the end of production, STRIP technology offers a solution to potential orphan well liabilities. Furthermore, it can be applied to both SAGD and cyclic steam stimulation designs.

“All we’re doing is applying this new technology to known recovery mechanisms. We are now focused on acquiring, as a producer, depleted CHOPS and heavy oil wells, not so much the selling of the technology. We are using a traditional [exploration and production] approach. We see a lot of upside to that, but we’re open to various options, including joint ventures,” Schneider says.

 

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on August 11, 2016, in economic impact, oil. Bookmark the permalink. Leave a comment.

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