Enhanced Oil Recovery Case Study

Final Design Report

MUN Reservoir Solutions ENGR 8926

Michael Mosher - 200816593 Nicholas House 200814127 Christopher Furlong 200931863 Evan Hipditch 200738284

Enhanced Oil Recovery Case Study Final Design Report

By MUN Reservoir Solutions

Engineering 8926 Mechanical Design Project II

Executive Summary
This document highlights the design work that MUNRS has undertaken towards achieving their goal of testing a new method of enhanced oil recovery. This method, in which produced gas is separated into light and heavy components for both gas lift and gas injection respectively, is being modeled through industry-standard simulation techniques. Once MUNRS had proven that the minimum miscibility pressure (MMP) of the produced gas and the reservoir fluids were not similar (i.e. the produced gas would not be effective for gas injection in its current state), the group made effective use of a two-stage oil and gas separator. By optimizing the temperature and pressure of the first stage of the separator, and effectively removing the right quantity of light components from the fluid, MUNRS was able to remove a composition of rich gas from the separators second stage that when tested, had an MMP that was very c lose to the pressure of the Norne reservoir the reservoir for this case study. Since these were roughly the same pressure (297.8 and 298 bar respectively), it was determined that a developed miscibility would be possible with this injection fluid. Once the injection composition was determined, MUNRS then modeled the Inflow Performance Relationship (IPS) and Vertical Lift Performance Curves (VLP) using production equipment standards found in modern oil and gas installations. This detailed analysis confirmed that gas lift will be of great benefit to the production from wells in the case study, and that the test case well was functioning properly.

The final step undertaken in the design project by MUNRS was to design a block model of a homogeneous reservoir so that the results of the gas lift and gas injection could be observed. This model will show results, as they would be obtained from an oil and gas reservoir in industry. The results for the project were then examined from an economical point of view, in which it was determined that the enhanced oil recovery techniques used for this project caused a substantial increase in value. The project was considered an overall success. MUNRS feels that the results conclusively show that the enhanced oil recovery technique of separating gas into rich and lean components for gas injection and lift purposes respectively improves the overall recovery from a reservoir, as well as accelerates the rate at which fluids may be produced.

Table of Contents
1.0 Introduction ........................................................................................................................ 1 2.0 Problem Definition ........................................................................................................... 1 3.0 Design Specification and Constraints ......................................................................... 2
3.1 Time.................................................................................................................................................. 3 3.2 Research ......................................................................................................................................... 3 3.3 Fluid Characterization ............................................................................................................... 4 3.4 Fluid Separation ........................................................................................................................... 4 3.5 Simulation and Modeling of Fluid Behaviour .................................................................... 4

4.0 Project Objectives and Goals ......................................................................................... 5 5.0 Fluid Characterization and Miscibility Simulation ................................................ 5
5.2 Fluid Characterization ............................................................................................................... 6 5.3 Fluid Recombination .................................................................................................................. 6 5.4 Miscibility and MMP ................................................................................................................... 7 5.5 MMP Test ........................................................................................................................................ 8 5.6 Separator Test .............................................................................................................................. 9 6.1 Modeling the Relationship P,T and MMP ...................................................................... 12 5.2 Notes on Separator Design .................................................................................................... 15

6.0 Separator Optimization ................................................................................................ 11

6.0 PROSPER and VLP ........................................................................................................ 16

6.1 Lift Curve Design ....................................................................................................................... 16 6.1.1 Injection Rates ................................................................................................................................... 16 6.1.2 Injector Depth.................................................................................................................................... 17 6.1.3 Tubing Diameters............................................................................................................................. 18 6.1.4 Tubing Roughness ........................................................................................................................... 19 6.2 Gas Lift and Node Pressures ................................................................................................. 19

Section 7.0 Reservoir Simulation .................................................................................. 20

7.1 ECLIPSE...................................................................................................................................... 20 7.2 ECLIPSE Block Model ............................................................................................................ 20 7.3 ECLIPSE Full-Field Modeling/Project Scope Changes ............................................... 21 7.4 Block Model Design and Implementation ....................................................................... 22

8.0 Economic Analysis .......................................................................................................... 29

8.2 Present Value Theory.............................................................................................................. 29 8.3 Present Value of MUNRSs Cash Flow ................................................................................ 30

9.0 Conclusions and Recommendations ........................................................................ 32

9.1 Conclusions ................................................................................................................................. 32 9.2 Recommendations ................................................................................................................... 32

Figures
Figure 1 - Response Surface for Initial MMP Optimization ................................................. 12 Figure 2 - Response Surface for Refined MMP Optimization .............................................. 14 Figure 3 - IPR Curve ............................................................................................................................ 17 Figure 4 - IPR Curve, Changing Pipe Diameter ......................................................................... 18 Figure 5 - Block Simulation Model ................................................................................................ 26 Figure 6 - Oil Production Rates....................................................................................................... 27 Figure 7 - Cumulative Oil Recovery .............................................................................................. 28 Figure 8 - Yearly Cash Flow Diagram ........................................................................................... 30 Figure 9 - Cumulative Present Value Cash ................................................................................. 31

Tables
Table 1 - MMP Values for Initial Separator Test ...................................................................... 11 Table 2 - Refined Table of MMP's From Refined Separator Test....................................... 13 Table 3 - Reservoir Properties ....................................................................................................... 23 Table 4 - Injection Gas Composition ............................................................................................. 25

Appendices
Appendix A Software Brochures Appendix B Project Gantt Chart Appendix C Miscibility and Minimum Miscibility Pressure Appendix D Accurate Fluid Characterization, Process Optimization Boosts Crude Production Appendix E Separated Fluid Compositions Appendix F Gas Lift Appendix G Prosper Data Appendix H Gas Lift Calculations

1.0 Introduction
ENGI 8926 Mechanical Design Project II is the second of two capstone design courses in the Mechanical discipline. Building on skills developed in the first, student teams each choose a unique design challenge and then proceed to generate a solution. Memorial University Reservoir Solutions (MUNRS) is a group of four mechanical engineering students from Memorial University. They are Michael Mosher, Evan Hipditch, Christopher Furlong, and Nicholas House. The group works under the cosupervision of Dr. Lesley James, Dr. Thormod Johansen, and several teaching assistants (TAs) who work for the two professors. For the design project, MUNRS has been tasked with testing a proof-of-concept case study, which will determine how effective a new enhanced oil recovery technology is. This document outlines the entire design project undertaken by MUNRS during the final term of their mechanical engineering degree, and includes all the design steps taken to achieve the project goal. Conclusions and recommendations are also included so that the information obtained during the design phase of the project can be used as effectively as possible.

2.0 Problem Definition

The problem that MUNRS has been tasked with this term is to simulate the overall effect that a new form of enhanced oil recovery technology has on an oil and gas 1

reservoir. The main methodology is to separate produced gas into light (lean) gas and heavy (rich) gas, and use those two compositions for gas lift and gas injection respectively. Light (lean) gas simply refers to the fact that the gas is mainly composed of small carbon chain hydrocarbons, while heavy (rich) gas refers to the longer and thus heavier carbon chains that it is composed of. If the project is successful, the group will be able to demonstrate precisely how the technology works, along with evidence of how effective the results are, in terms of oil recovery enhancement. The team made use of various pieces of software such as ECLIPSE, PROSPER, and PVTsim for reservoir modeling, gas lift modeling and fluid characterization/separation modeling, respectively. The group also made use of the software Design Expert for factorial analysis, and separator optimization. The available software will allow us to demonstrate the results of the work that we have done, in the same way that they would be presented in the oil and gas industry. These simulation software packages are industry standard, and made available to MUNRS through Memorial University. Brochures on the operation of the software associated with the project are available in Appendix A.

3.0 Design Specification and Constraints

MUNRS is fortunate enough to be able to conduct the associated project work this term through the use of simulation and modeling. Even without access to the physical, tangible resources, using industry standard modeling and simulation software will generate the most accurate results and predictions possible with the

resources available. Bearing that in mind, the design specifications and constraints for this project are as follows.

3.1 Time
There is a timeline on the project, with a final report on April 4th, and a final presentation to give on April 1st. Other due dates that were noteworthy were the first report and presentation, which were due during the week of February 7th, and the second report and presentation, which were due during the week of March 7th. Time constraints also include the availability of Teaching Assistants who helped with the technical nature of the project. Lab availability was also a time constraint, as the group was sharing computer time with other Teaching Assistants and graduate students who had access to the lab. For the purposes of scheduling, MUNRS made use of a Gantt chart to ensure that the project stayed on schedule throughout the term. This Gantt chart is available in Appendix B.

3.2 Research
With any project, there will be new information that the team must learn and become familiar with. There is research involved with the early stages of this project, to learn how all of the relevant software works, and to become familiar with working in an oil and gas environment. Also, research was necessary to understand the key terms, as well as the physical mechanisms associated with fluid characterization, separation, gas lift modeling, and reservoir modeling. The group is constrained by what is available in terms of reference material. There isnt much

concern here, because the software being used is industry standard, and the processes being implemented are common in oil and gas engineering environment.

3.3 Fluid Characterization

Before simulations began, the team had to determine the composition of the fluid (i.e. gas, and reservoir oil) that it was dealing with this term. This was done with the help of the Teaching Assistants and our project supervisor Dr. Thormod Johansen. Constraints here were mostly the learning curves associated with learning how to use the software.

3.4 Fluid Separation

Fluid separation modeling was done using the PVTsim software. This software was used to model the bahaviour of a two-stage separator, and lean and rich gas was separated in each of the two stages, respectively. The constraints with this part of the project were the fluids ability to be effectively separated into its respective lean and rich components, with our separator setup.

3.5 Simulation and Modeling of Fluid Behaviour

The simulations and modeling aspects of the project made up the majority of the work required this term. These allowed MUNRS to see real results from hypothesized ideas, and enabled the group to determine if it is possible to increase the recovery factor of real oil and gas projects and developments. Constraints here focused around the learning curves associated with the software, as well as understanding the physical mechanisms associated with the process that were undertaken. 4

4.0 Project Objectives and Goals

The main design objectives of this project were to be kept as simple as possible. MUNRS aims to ensure that all reports and presentations are submitted and presented on a timely basis, adhering to the many deadlines of the project. MUNRS also hopes that our solution matches the requirements of the project, in that a viable solution is presented that can be used in industry to improve the life of field of various oil and gas projects by increasing the recovery of wells that have been drilled. MUNRS hopes to consider all aspects of the project in extensive detail, to ensure that not only have the appropriate results been obtained, but also that they are as accurate as they can possibly be in terms of our simulations. MUNRS will consider the project a success if it can be proven that enhanced oil recovery can be achieved through this technology.

5.0 Fluid Characterization and Miscibility Simulation

The characterization of reservoir fluids and subsequent miscibility simulation and tests comprise the first section of this project. To determine the effect of injecting various gas compositions into a simulated reservoir it was first necessary to define the fluids used and determine the compatibility of these fluids. A fluid modeling and reservoir simulation program called PVTSim was used to do this. The ultimate goal in this section was to determine what is referred to as the minimum miscibility pressure between the reservoir fluid and various injected gases. For clarification on miscibility and minimum miscibility pressure (MMP), please see Appendix C. The steps involved in this process are outlined below. For more information on fluid 5

characterization, please refer to the article called Accurate Fluid Characterization, Process Optimization Boosts Crude Production (www.ogj.com, 2014) in Appendix D.

5.2 Fluid Characterization

MUNRS was provided with a sample production fluid composition including the chemical breakdown of both the produced gas and oil. Having this breakdown made it a very simple process to define the production fluids in PVTSim. Once the chemical compositions of the production fluids were defined, the next step would ideally be to test the compatibility of the produced gas with the reservoir fluid for gas injection. But the only defined fluids so far are the production fluids. To determine the composition of the fluid in the reservoir, a fluid recombination is required.

5.3 Fluid Recombination

The theory behind a recombination test is based on the fact that our produced gas was once a part of the trapped reservoir oil until it was extracted. When these fluids separated upon extraction, their physical composition changed based on the gas-oil ratio and reservoir oil density. Using a GOR of 225 and oil density of 0.8595 g/cm3 from a provided academic thesis modeling the Norne field (SWAG, 2012); PVTSim effectively models the reversal of the fluid separation during production. Once a recombination of these fluids had been modeled, they were effectively in solution and this reservoir fluid was used for further testing. To determine the effect that

injected gas would have on production, it was necessary to find out if the two fluids were miscible and find the minimum miscibility pressure or MMP.

5.4 Miscibility and MMP

Miscibility is the ability of fluids to mix and form one homogenous solution. As an example, water and oil do not mix when combined which makes them immiscible. Water and vinegar combine to form one solution because they are miscible. Miscibility between injected gas and reservoir oil is a very important property that allows for effective and efficient oil production. In most cases there will exist a certain amount of residual oil left over in a reservoir after the reservoir has been produced, which cannot be readily recovered. By injecting a gas that is miscible with this oil, a homogenous solution can be made and the oil can be extracted much more easily. It is for reasons such as this that miscibility is a very important property in enhanced oil recovery. For any combination of injected gas and reservoir oil there is a pressure that must be reached to obtain miscibility between the two fluids. This pressure is referred to as the minimum miscibility pressure (MMP). MMP calculations are done using PVTSim with given oil and gas compositions. If calculated MMP values turn out close to the reservoir pressure, this would indicate that using the gas for injection could be effective. It is also valuable to mention that MMP was calculated in two different forms. The first is referred to as first contact miscibility. This essentially means that miscibility is achieved immediately upon contact of the gas and oil. This is the ideal goal to reach for enhanced oil recovery. The second type of miscibility is called multi7

contact miscibility. This means that miscibility is not immediately achieved, but several stages of mixing are required within the reservoir before the fluids form one solution. There are different MMP values for each of these conditions, both of which are calculated with PVTSim. For more detailed explanation of first and multicontact miscibility, see Appendix C (Johansen, 2008).

5.5 MMP Test

It should be reiterated that the main goal of this project is to determine the ideal gas compositions for gas injection and gas lift. It was expected that the produced gas would have to be separated into rich and lean components for injection and lift respectively. Before running the necessary simulations to determine the compositions of each, it was first necessary to test the potential of injecting the produced gas as-is by conducting a MMP test. The MMP test in PVTSim uses two fluids and finds a minimum pressure between the two, at which they become miscible. To conduct an MMP test, the two fluids in question must be modeled in PVTSim by specifying the chemical compositions of each along with the physical properties of each chemical component. Once the reservoir fluids were recombined, a MMP test was done with our recombined fluid to find out whether our produced gas was effective for gas injection. First contact miscibility was found to occur at 980.35 bar and multicontact occurred at 563.06 bar. These values are much higher than the reservoir pressure of 298 bar, indicating that the produced gas is not an effective composition to use for injection (this was an expected result). To determine which components

of this gas would be more effective for injection, a separator test is required on the recombined fluid.

5.6 Separator Test

A separator test can simulate the separation of a fluid at different pressures and temperatures to find the potential gas and oil compositions that can be obtained from a given fluid. This is especially valuable for this project since it allows the group to test several possible gas compositions for injection effectiveness. Essentially this test models a two stage separator that first removes lean components under selected temperature and pressure conditions (first stage) and then removes rich components at atmospheric conditions (second stage). These rich components that are obtained at a chosen temperature and pressure are what the group will use to conduct MMP tests with the recombined reservoir fluid to determine injection effectiveness. It is necessary to determine the possible pressure and temperature values that can be used for the first stage of the separator, and thus determine the best separated gas compositions to use for injection and lift respectively. To narrow the possible separator test parameters, MUNRS used standard pressure and temperature ranges for oil and gas separators. MUNRS chose to use standard pressures range from 0 to 100 bar and temperatures usually range from 0 to 200oC (Schlumberger, 2014). Once these ranges were identified, the group decided to use a program called Design Expert to determine a mathematical relationship between pressure, temperature and minimum miscibility pressure. The details of this process are covered in the following section of this report, but the main concern here is that 9

nine points are needed to create an accurate surface model. In terms of separator tests, it was necessary to conduct nine tests which used a high pressure low temperature, low pressure high temperature, mid-range pressure mid-range temperature and so on. By doing this, the group was able to determine the first and multi-contact miscibility pressures between the rich gas and reservoir fluid at the chosen temperature and pressure combinations. The separator and miscibility tests are shown below in Table 1. These results can show right away that first contact miscibility is not a likely outcome using these fluids. The closest first contact miscibility pressure shown is 626.03 bar which is still more than 300 bar above reservoir pressure of 298 bar. However, the same entry shows a value of 300 bar for multi-contact miscibility which is very close to reservoir pressure. This is a very good sign at this stage but the Design Expert analysis will model the MMP values in greater detail.

10

Pressure High/Low Test LL LH HL HH MM ML MH LM HM A B C D E F G H I (Bar) 5 5 100 100 52.5 52.5 52.5 5 100

Temperature (Deg C) 0 200 0 200 100 0 200 100 100

sat P

Crit MMP fc 626.03

MMP mc

Drive Type

(bar) 539.63 539.63 539.63 539.63 539.63 539.63 539.63 539.63 539.63

(bar) 577.33 727.83 631.78 670.55 634.37 590.41 674.97 699.88 642.92

300.17 57.17%

1110.71 611.75 99.82% 762 882.71 769.96 655.9 899.2 992.4 794.73 392.14 70.50% 476.16 82.28% 396.8 71.34%

319.99 60.22% 487.36 83.26% 561.89 92.39% 413.89 74.00%

Table 1 - MMP Values for Initial Separator Test

6.0 Separator Optimization

For the optimization of the pressure and temperature of the first stage of the separator, MUNRS modeled the relationship between separator pressure, temperature and output fluid MMP. For the purposes of this project, factorial analysis was used to optimize the temperature and pressure of the first stage of the separator, so that the optimal composition of rich gas could be removed from the second separator stage. This was done by modeling the relationship between the temperature and pressure of the first stage of the separator and the MMP of the rich fluid exiting the second stage and the reservoir fluid. The developed MMP of the rich gas exiting the separators second stage should be the same, or very close to the

11

reservoir pressure itself. This is necessary to achieve miscible injection. MUNRS used software called Design Expert to find the relationship between temperature, pressure, and MMP.

6.1 Modeling the Relationship P, T and MMP

The first step in modeling the relationship between the pressure and temperature of the first stage of the separator and the output MMP of the rich fluid was to run several trial tests in PVTsim. The results from these trials are shown in Table 1. The second step for MUNRS is then to use the table of values, and a convenient surface-modeling component of the Design Expert to generate a response surface to determine how the variables are related. The response surface to the initial table of values is shown in Figure 1 below.

Figure 1 - Response Surface for Initial MMP Optimization

The above response surface was modeled using the minimization functi on in Design Expert. This function uses tabulated inputs to create a model equation for a

12

surface, and generates a plot with a peak where the minimum values occur. This shows us that low pressure and low temperature are where the minimum values lie, and in this particular case, where the most important values lie the pressures which are the closest to the reservoir pressure. Minimization was chosen in this case, because the smallest results that MUNRS was evaluating were the closest ones to the target MMP. MUNRS then decided to refine the scope of the response modeling, by using smaller temperature and pressure ranges for the first stage of the separator. The group chose to vary the temperature from 0 to 15 degrees Celsius, and to vary the pressure from 1 to 15bar. Running separator and MMP tests again in PVTsim (with the smaller ranges of T, P) completed the refined table of values. The refined table is shown below in Table 2.
High/Low LL LH HL HH MM ML MH LM HM Test A B C D E F G H I Pressure (Bar) 1 1 10 10 5.5 5.5 5.5 1 10 Temperature (Deg C) 0 15 0 15 7.5 0 15 7.5 7.5 P sat (bar) P Crit (bar) MMP fc MMP mc Drive Type 539.63 678.52 909.45 501.26 86.05% 539.63 698.27 980.35 563.06 93.86% 539.63 551.04 571.5 262.78 51.77% 539.63 575.88 622.8 297.8 56.94% 539.63 588.04 650.59 316.75 59.55% 539.63 572.1 615.15 292.8 56.08% 539.63 602.36 686.39 340.95 63.00% 539.63 689.67 948.69 534.13 90.27% 539.63 563.29 596.22 279.77 54.30%

Table 2 - Refined Table of MMP's From Refined Separator Test

The above values were then used as inputs in Design Expert, and a new model was developed for the relationship between first-stage separator temperature, pressure, and second-stage output MMP. It was found that the output MMPs were in a much more favorable range when MUNRS ran the refined model. In the earlier model, the smallest values were the only ones that were close to the target values. In this case, there were values on

13

either side of the target reservoir pressure, so MUNRS made use of the target function in the surface-modeling component of Design Expert. By doing so, the target pressure of 298bar was selected, and the surface displaying which temperatures and pressures gave the group that target MMP is shown in Figure 2.

Figure 2 - Response Surface for Refined MMP Optimization

The clear peak at several values for pressure and temperature give us a clear indication that there are possible values of temperature and pressure that correspond to useful MMPs. From the refined table, there is one value in particular that provides us with the ideal MMP: 10 bar, and 15 degrees Celsius. This value gave us an MMP of 297.8bar. Since this is ideal, MUNRS will be using these separator inputs, along with the above justification of doing so (provided by Design Expert) moving forward. By selecting that temperature and pressure as the input parameters for our separator, MUNRS obtained a unique fluid composition for the rich gas exiting the second stage. The separator test also provided MUNRS with the

14

lean (light) fluid that exited the first stage of the separator. These fluid compositions are shown in Appendix E.

5.2 Notes on Separator Design

It is worth noting in this section that the design of the separator that is capable of performing the task prescribed above is out of the scope of this particular project. Separator design involves the calibration of operating temperature and pressure so that the device can operate effectively in an oil and gas processing operation. MUNRS will move forward with the fluid composition obtained through the theoretical separation performed in the previous section, noting that the separation process has been done in simulation. If this technology were to be implemented in a real oil and gas operation, the separator capable of operating at the above pressure and temperature (10 bar, 15 degrees C) would need to be designed to fit the particular operation. If it was determined that the separator was not a feasible option, there are other options which could be considered from a process engineering point of view, which would provide the exact same result. A notable example of a method of gas separation in a modern oil and gas production environment would be a distillation tower (www.elmhurst.edu, 2014). A future project could be completed in which a full investigation of the methods of gas separation could be examined for implementation in a particular operation.

15

6.0 PROSPER and VLP

PROSPER was used in this project to design lift curves for the ECLIPSE block model, and to study how changing different aspects of the production well and the gas injector will affect the overall performance of the system. Using the chemical compositions and information from PVTsim along with information about the reservoir and topsides production equipment we could design lift curves for our well. For more information on gas lift, please see Appendix F.

6.1 Lift Curve Design

Our production well is based on the producing well D-2H, located in the C segment on the Norne oil field. No two production wells are identical but the D-2H well is a great standard well to base the vertical lift performance curves from. The data that is used for the PROSPER modeling is located in Appendix G. Data from this well was used with data from PVTsim to model our producing well with gas injection for artificial lift in PROSPER. 6.1.1 Injection Rates For our purposes, a wide range of rates for gas injection were used and analyzed. From Figure 3 below, we can see that with high gas injection rates, a lower pressure can be maintained in the well. This is because as we release more gas into the producing well, there is a greater pressure differential between the top node and the bottom hole. This increase in the pressure differential allows for a greater recovery (flow) rate.

16

Figure 3 - IPR Curve (Pressure vs Liquid Rate)

6.1.2 Injector Depth The injector depth was modeled ranging from 6000ft to 10,000ft in the producing well. This is shown in Figure 3 and is also shown with relation to gas injection rate. It is notable that the lower the valve is placed with respect to the reservoir, the less pressure is needed to extract the oil. With all else constant we can see that the injector depth does have a noteworthy effect on the production but this effect is less than the possible effect of the gas injection rate. Considering the fact that increasing the injection rate does cost more and causes more strain on the topside equipment in comparison to the low cost of valve placement, a more in-depth analysis can be done based on a specific well.

17

6.1.3 Tubing Diameters When considering the piping diameters, it can be seen that the diameter of the production piping does have a large effect on the pressure required to extract the oil. This is not a linear relationship and once the diameter is large enough to avoid exceptionally high pressure, the difference from increasing the sizes reduces. Using standard piping sizes for wells similar to the D-2H well, it is observed that a small variation in piping diameter will not make a significant difference with all else constant. See Figure 4 below for this relationship.

Figure 4 - IPR Curve, Changing Pipe Diameter (Pressure vs Liquid Rate)

18

6.1.4 Tubing Roughness The set tubing roughness for this model is 0.0006 for all piping. When varying this within standard ranges there was not a noteworthy effect.

6.2 Gas Lift and Node Pressures

Using fundamental flow theory we can prove that by introducing gas injection to a system will increase the recovery (flow) rate of produced oil. From the chemical compositions for the Norne Field and the lean gas composition that was found using PVTsim the weight of the oil in the producing well can be determined before and after gas is used for injection.

Using Bernoullis equation;

It is found that without gas injection, the pressure component due to the oil in the well is about 312psi. When gas is injected the light gas takes up a large portion of the volume in the piping, resulting in a lower bottom-hole pressure due to the lighter components in the fluid column. If there were only the lean gas in the production well, there would be a pressure of 0.29 psi on the bottom hole. Often during gas injection, the volume of gas in the piping is significantly higher than oil. This demonstrates that considerable pressure loss is due to gas injection. (Please refer to Appendix H for calculations)

19

Section 7.0 Reservoir Simulation

Reservoir simulation is an area of reservoir engineering in which computer models are used to predict the flow of fluids (typically oil, water, and gas) through porous media. These models operate on the same principles of reservoir and production engineering covered in the course work at Memorial University. Using simulation is very common in industry and often a necessity before final project approval. Simulation was used as the primary method of evaluating the impact of the miscible gas injection theory.

7.1 ECLIPSE
The Schlumberger ECLIPSE software was to be used in both simulation cases. This is industry standard software that can account for any kind of reservoir sensitivity. The utilization of this software will allow for the use of other third party application like PROSPER and PVTi that can produce outputs especially for ECLIPSE.

7.2 ECLIPSE Block Model

During the first phase of the project, the intention was to use two separate reservoir models to evaluate the results. The first is a simple block model created for the purpose of calibrating and optimizing the workflow. The second is a full field dynamic simulation model of the Norne field, which allows for a detailed analysis of the impact of the changes when applied to a producing field. The block model simulations had to be created before they could be used. These models, unlike a full field model are simple three dimensional boxes meant to

20

represent a reservoir.

The physical conditions in the model are homogenous,

meaning they will be uniform throughout the model. This means properties like porosity, permeability, and saturation use average values that will act over the entire reservoir instead of varying with position. The model is shaped like a rectangular box, with an oil producer in one corner and an injector (in this case injecting gas) in the opposite one. When in operation, the injected gas acts like a piston, pushing fluid from one end of the block towards the oil producer. The simplicity of a model like this allows for it run a production scenario very quickly when compared to a structurally complex geological model. This is beneficial when trying to find the most efficient method of oil production.

7.3 ECLIPSE Full-Field Modeling/Project Scope Changes

A full-field dynamic simulation model is meant to accurately model exactly what is happening in the field during production. It is a three dimensional representation of what is believed to be in the ground. The model that was originally intended to be used in this project is a full-field model of the Norne field, created and donated to the university by Statoil. These models are developed over the course of many years and are updated based on the newest interpretations of the reservoir. The model, although built in ECLIPSE, was not built with the capability of processing changing fluid compositions. Thus it was seen early in the project, before the end of phase one that adapting the Norne full-field model to accept fluid composition as part of the simulation would be challenging. It was seen that using a full-field model does not provide any added benefit in the theoretical study, but rather only

21

examines its effectiveness on a specific producing field. Thus, it was decided to move forward without using a full field model.

7.4 Block Model Design and Implementation

The focus of the reservoir simulation now shifted entirely to creating the block simulation models. It was first necessary to create a base case to serve as a reference model. The first step is to define dimensions and properties that will remain constant throughout the model. These are the rock properties, like porosity and permeability. Porosity is the percentage of free space in the porous reservoir rock. Permeability measures the ease of fluid flow through a porous media. Permeability is defined in the X, Y, and Z directions. For the first simulation model, high permeability sand was simulated to allow for efficient simulation and proof of concept. The constant properties of the simulation are displayed in Table 3. The fluid properties of the reservoir were taken from the donated data of the Norne field. The detailed fluid characterization contains a breakdown of the mole percentage of each molecule in the reservoir fluid. The higher carbon chains with smaller molar percentage are combined because they do not represent a large percentage of the total compositions. The characterized reservoir fluid that is used in the block model is shown in Table 4. The first test block models were dimensioned to represent a very large reservoir. For the final models, these dimensions were scaled down to represent a block similar in size to a development project, like Hibernia Southern Extension or South West BNA. Changing the size of a reservoir will change the amount of oil in place,

22

referred to as (STOOIP) or Stock Tank Oil Originally in Place. The STOOIP in the final models was also made to match that of a development project block. Each model, although dimensioned different, is constructed of 8,064 individual cubes. There are 56 in the X direction, 24 in the Y direction and 6 in the Z direction. The Oil-WaterContact (OWC) is located between layers 2 and 3 from the bottom. Final Property Porosity X Permeability Y Permeability Z Permeability Reservoir Temperature Reservoir Pressure Test Model Model 18% 1000 mD 1000 mD 20 mD 208.94 F 298 bar 18% 200 mD 200 mD 0 mD 208.94 F 298 bar

Table 3 - Reservoir Properties

The injection gas used in the base case reservoir model is the same gas separated from the production fluid in the Norne field. Two alternate cases were constructed; the mid and high case simulations. The difference between these cases is in the composition of the injection gas. The high case uses an injection gas obtained using optimum separator settings. This is the most miscible gas that can be produced using the reservoir fluid. The mid case uses a gas that is in between the base and high case in terms of miscibility. The injection gas composition for each case is listed in Table 2. It can be seen as that the gas composition changes trending towards

23

using a high percentage of the larger carbon chains, miscibility increases. This is to say that the richer (heavier) the injected gas is, the more miscible it is with the reservoir fluid. This is evident when looking at the percentage of C1 in the base case and in the high case, as it decreases from over 90% to just above 65%. These generated fluid compositions abide by the theory that the miscible gasses will contain higher carbon chains, and serve as justification to move into the simulation phase.

24

Molar % Molecular Base Case Component Weight N2 28.014 0.20% CO2 44.01 1.20% C1 16.043 90.50% C2 30.07 3.82% C3 44.097 1.36% iC4 58.124 0.23% nC4 58.124 0.38% iC5 72.151 0.14% nC5 72.151 0.14% C6 86.178 0.20% C7 96 0.35% C8 107 0.46% C9 121 0.27% C10-C12 146.512 0.46% C13-C15 189.39 0.19% C16-C18 235.783 0.07% C19-C21 275.483 0.02% C22-C24 317.208 0.01% C25-C29 370.992 0.00% C30-C35 447.283 0.00% C36-C44 547.557 0.00% C45-C80 752.699 0.00%

Mid Case 0.10% 1.69% 84.21% 7.58% 3.82% 0.65% 1.06% 0.29% 0.25% 0.17% 0.10% 0.07% 0.02% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

High Case 0.03% 2.74% 65.44% 15.53% 10.22% 1.68% 2.65% 0.63% 0.52% 0.30% 0.15% 0.09% 0.02% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Table 4 - Injection Gas Composition

The purpose of using multiple cases was to prove the theory of fluid miscibility. It was expected when creating each of these cases that the base case would perform the worst, and the high case the best. Estimated Ultimate Recovery (EUR), which is a measure of cumulative oil production was the benchmark used to determine the value of each case. A picture of the first iteration of the block model is shown in Figure 5. The model is shown mid production. The color scale shows oil saturation

25

in the block. It is easy to see the OWC (Oil/Water Contact), where the color changes from purple to blue. The gas injector can be seen pushing fluid towards the producer in the picture as well.

Figure 5 - Block Simulation Model

After constructing and testing the first set of models (containing a base, mid and high case), the results were as expected and proved that the simulation was operating under the same assumptions as the theory. The first set of models was then refined to have properties and sizing more analogous to a smaller development block, rather than a field. It was from those models that the final conclusive results were drawn. Figure 6 shows the oil production rate curves from each of the cases simulated. These curves show the Field Oil Production vs. Time for the base, mid and high case respectively.

26

Figure 6 - Oil Production Rates

The spike in production in each curve is a result of the gas injection. The more miscible injection gas in the mid and high case shows a large increase in the impact of gas injection, and therefore production rates. The peak rate of the high case is over 5 times that of the base case. It is worth noting that that base case eventually surpasses both the mid and high cases in production rate. This is to be expected, because the oil recovery rate of the mid and high cases until these points has been higher, and it is harder to maintain those rates. Figure 7 shows a graph of cumulative oil recovery for those same three cases.

27

Figure 7 - Cumulative Oil Recovery

As expected the high case had the highest EUR. The mid case and base case had almost identical recovery over this period. However, this does not mean that both cases have the same value. Accelerated production has benefits, which will be shown in a detailed economic analysis. The production cases shown were deemed to be the most realistic, in the sense that the models used to produce these cases contained everything required for a realistic model. As the simulation models progressed, the result was consistent throughout.

28

This was that using a more miscible injection fluid resulted in more effective gas injection, accelerated recovery, and more cumulative recovery.

8.0 Economic Analysis

From the ECLIPSE results, MUNRS was able to plot the production of oil from three test cases. These were the base case, the mid case and the high case corresponding to three different MMPs. In theory, if the injection fluid is miscible with the reservoir fluid, there should be an overall increase in fluid recovered. MUNRS also varied the gas injection in the three cases. It was determined that gas injection has the ability to impact the production rate, and thus give a higher flow rate earlier. This is a good result from an economical point of view, as shown below.

8.2 Present Value Theory

In economics, it is often said that money early is better than money later. This is valid, not simply because it is better to have money in pocket than having to wait for it, but because money now is an investible asset, which will be worth less as time goes on. Present value theory states that if you invest $1000 now, with a 10% rate of return (ROR) compounded annually, it will be worth $1100 next year. By the same logic, $1100 next year, is only worth $1000 now. This confirms that to see the true, present value of a series of incoming cash over a time period (from here on referred to as a cash flow), a present value calculation must be made. The formula for present value of a series of cash flows is:

29

Present Value = (Future Value) / (1 + i)n (www.mathisfun.com, 2014) Where i = The Rate of Return (Interest Rate) n = The year in which the cash was obtained.

8.3 Present Value of MUNRSs Cash Flow

First, as shown in Figure 8, we have a yearly cash flow. The cash flow was generated by multiplying the yearly production totals by an oil price of $101/bbl (oilprice.com, 2013).

Yearly Cash Flow

120000000

100000000

80000000
Cash FLow (Dollars)

60000000

Base Case Mid Case High Case

40000000

20000000

0 1 2 3 4 5 6 7 8 9 10 Time (Years)

Figure 8 - Yearly Cash Flow Diagram

It can be clearly seen in Figure 8 that the high case is generating the most money. It is also clear, that the mid case is producing much more money earlier in the

30

production than the base case is. To compare the present value worth of all three cases, the formula for present value was applied to each cash flow. A graph showing the cumulative present value worth of all three cases is shown in Figure 9.

Present Value Cumula ve Cash

300000000

250000000
Cumula ve Present Value Cash

200000000

150000000

Basecase Midcase

100000000

Highcase

50000000

0 0 2 4 6 Time (Years) 8 10 12

Figure 9 - Cumulative Present Value Cash

It is clear from this plot that the value (in present day dollars) of the high case is higher than the mid case. It is also clear that the present value of the mid case is higher than that of the base case. This is precisely the result that MUNRS was hoping to obtain. It is noteworthy that this graph is very similar to the cumulative oil production graph shown earlier (Figure 7). The difference in Figure 9 is that when the production totals have been converted to cash flows, and brought to present day value, the mid case is clearly better than the base case. Even though the mid case and the base case have the same EOR, the mid case is more valuable, because it produces more oil earlier.

31

9.0 Conclusions and Recommendations

9.1 Conclusions
MUNRS feels as though it has achieved its goal this term with the enhanced oil recovery case study. Over the course of the project, the group modeled fluid recombination, separation, injection and gas lift. These results were implemented in a block model reservoir simulation and theoretical production results were generated to show that when a miscible injection gas is used in tandem with a light gas for gas lift, there will be a substantial increase in overall oil recovered, as well as an increase in the rate of production. The value of this technology was further investigated through an economic analysis which further demonstrated the results that MUNRS obtained through detailed work in previous sections.

9.2 Recommendations
If further research and analysis was to be done for this project, MUNRS has two main recommendations that it would make to the individuals that would be undertaking the project. The first recommendation is to complete a separate case study on the subject of separator design. The fluid separation mechanism that was implemented in this project was of a theoretical nature, and a separator capable of achieving the task we have outlined may require further design. It is also recommended that other alternate methods be considered for fluid separation. As mentioned above, distillation towers may be a viable alternative for fluid separation goals such as the ones involved in this project. It was determined that the design of the separator 32

design was outside of the scope of this particular project, so that would logically be one of the next steps in the overall design. The second and final recommendation that MUNRS has is that a full-field model implementation of the technology developed here would have enormous benefit. This may take a significant amount of time and effort, especially in terms of getting the full-field compositional model to run effectively. If this can be done, it would provide the operators working with the dynamic full-field model very useful information, and would provide them with real-world results through the simulation. Since the full-field model was deemed outside of the scope of the project for this term, it is a logical recommendation for further research and design for this project.

33

Sources

"Accurate Fluid Characterization, Process Optimization Boosts Crude Production." Login to Access the Oil & Gas Journal Subscriber Premium Features. N.p., n.d. Web. 02 Apr. 2014. "Oil and Gas Separator." Schlumberger Oilfield Glossary. N.p., 2014. Web. 05 Mar. 2014. Nangacovie, Helena L M. Application of WAG and SWAG Injection Techniques in Norne E-Segment. Thesis. Norwegian University of Science and Technology, 2012. N.p.: n.p., n.d. Print. "Refining Oil." Refining Oil. N.p., n.d. Web. 24 Mar. 20

34