Technological challenges still confront any rapid development of coalbed methane (CBM) production in China, although many basins appear to be prospective. CBM complications include complex reservoirs, restricted coal permeability, and a limited gas pipeline network.
The potential coalbed methane (CBM) resource in China is about 22.5 trillion cu m (724 tcf) based on a recent resource evaluation. Three major CBM provinces contain most of this resource: Northwestern, South, and North China (Huabei) basins.
During the past 20 years, these three areas have seen most of the CBM pilot tests, with more than 200 wells being drilled throughout the country. China has 11 established pilot areas.
The Qinshui basin was the first commercial CBM field. Because of different geological settings, coal-basin evolution, immature exploration methods, and other factors, however, operators in China still encounter technology problems.
If operators can solve these technology problems, CBM will play an important role in providing China's future energy needs.
Coalbed development
During the past 2 decades, China's government has promoted its CBM industry in its policies.1 Also, many corporations and joint ventures have explored for and attempted to obtain profitable CBM production. Of the more than 200 CBM wells, only a few have attained commercial gas production.
More than 150 CBM wells have been drilled in Eastern China. Many foreign corporations such as ARCO China Coal Bed Methane Ltd. (now BP PLC), Phillips China Inc. (now Conoco- Phillips), and Texaco Inc. (now ChevronTexaco Corp.) signed CBM licenses and initiated ambitious testing programs within several exploration blocks.
In May 2004, Far East Energy Corp. announced a farmout agreement from ConocoPhillips for exploration and production in the more than 1 million acre Dragon CBM project in Shanxi Province. Far East's program involves the drilling of a horizontal well test.
Far East also has an existing project in Yunnan Province.
Chinese local companies, PetroChina Co. Ltd. and China Union Coalbed Methane Ltd. (CUCBM), also are involved in testing new areas and using new technology. But most of their early efforts around gas-prone but low-permeability coal mines were unsuccessful except for some areas in Qinshui and Ordos coal basins.
Geology
With the exception of the Ordos basin, Chinese coal basins have more structural complexity than the commercial coalbeds found in the US. Faults, some active, compartmentalize coal reservoirs into isolated blocks that are difficult to develop.
In addition, erosion of the coal section and reburial during Quaternary time has affected gas saturation in Eastern China coal basins. A study of China coalbeds divides China into five CBM provinces in terms of coal-bearing strata, coal basin type, and tectonic geology. These five areas are North China (Huabei), South China (Huainan), Northeastern China (Dongbei), Northwestern China (Xibei), and Dianzang.
North China is the most important CBM province and has most of the promising CBM targets.
PetroChina recently calculated that the China CBM resource held about 22.5 trillion cu m of coalbed methane in beds shallower than 2,000 m. The country has eleven pilot testing well groups: Jinshi-1, Dacheng, Panzhuang, Zhaoyuan, Shouyang, Yangjiaping, Linjiaping, Gikou, Linxing, Huaibei, and Fuxin (Fig. 1).
The principal coal-seam targets in North China occur within the Permo-Carboniferous age Shihezi, Shanxi, and Taiyuan formations.2 The total CBM resource in North China is around 14.8 trillion cu m or 66% of the total resource.
These units comprise a regressive depositional sequence that was laid down over much of northeastern China. Towards the north, individual coal seams occur lower in the section and contain fewer but thicker beds.
Typically, a total of 10-30 m of coal occurs within six potential seams. The coal generally is bright, rich in vitrain, and well cleated, unlike duller Gondwana coals of a similar age.
Gas content varies with coal rank and depth, from about 6 cu m/ton in sub-bituminous coals to more than 15 cu m/ton in anthracite.
CBM saturation mostly ranges from 30% to 60% with an average of 42%. A water-bearing carbonate interval interbedded with the coal seams often complicates well completions and hydraulic stimulation.
Additionally, lower coal rank CBM targets lie in the Jurassic Yan'an formation in North China and have equivalent formations in the Northwest CBM provinces, Qsadam, Zhungaer, and Tuha basins. The area has an estimated 3.1 trillion cu m of CBM resource.
Seams in these units tend to be thicker and stratigraphically more dispersed, as well as lower in rank (sub-bituminous). Some exceptional Jurassic areas have 100-m thick individual coal seams with gas content of 12 cu m/ton
This CBM saturation in some targets is higher than in the North China.
Recent commercial success in the low-rank Uinta and Powder River basins of Western US suggests that China's Jurassic coal deposits could provide significant potential.
In the past 2 years, PetroChina has drilled CBM wells in Jurassic coal-bearing strata in the Ordos and Tuha basin. In the Tuha basin, PetroChina encountered higher gas saturation in the Jurassic coal seam and found a new gas-bearing area.
At this time, the Tuha basin has no new geological appraising activity in the Jurassic formation.
In the South China CBM province, the most important targets lie in the late Permian Longtan formation that contains 10-50 layers with a total 5-55 m thickness. These estimated CBM resources are 4.1 trillion cu m.
Liupanshui basin is the largest coal-bearing basin and has many favorable CBM targets. Some targets have higher permeability and gas content because of late intense tectogenesis. Until recently, operators had drilled very few CBM wildcat wells because of the lack of pipelines and the complex geology setting.
In Northeast China, which has dispersed coal-bearing basins, the main CBM targets are thick coal seams in the Cretaceous strata but the estimated CBM resource is small, about 0.42 trillion cu m. Although the coal-bearing basin and its resources are small, the CBM concentration is higher and results in a favorable target.
History
From 1950s until now, China and foreign companies have evaluated several diverse areas and defined high-potential plays, although only a few projects have attained commercial status. The more than 214 coalbed methane wells drilled to November 2002 include 153 production wells, 59 wildcat wells, and 5 "gob" wells (Table 1). [Editor's note: Some sources refer to "gob" as "a term used by miners for the caved-in area of the worked-out part of a coal mine."]
Gob wells produce gas from collapsed overburden in underground coal mines.
China CBM has had three stages of CBM exploration and development.
The first stage (1950s-60s) involved drilling of vertical and horizontal gob wells to provide mine ventilation systems for reducing the coal gas hazards. In most of these cases, mine operators discharged the gas recovered from gob wells directly to the atmosphere.
The second stage (1970s-90s) saw the beginning of drilling pilot wells for exploration and development. During this time, companies determined the prospective CBM potential and found many favorable targets for appraisal.
The third stage (from 1990s to present) broadened CBM exploration and production activities across the country. During this stage, CBM activity adopted modern CBM drilling and testing techniques to local geologic conditions and added well site services such as wireline core retrieval, injection and falloff testing, and methane desorption studies.
Coalbed exploration reached a crest in 2000 when foreign operators, Molopo Australia Ltd. Texaco, ARCO, and Phillips kicked off ambitious testing and evaluation programs in their respective blocks. CUCBM and PetroChina also tested several areas in the Qinshui and Ordos basins.
Qinshui coal basin
After drilling the CBM Jinshi-1 well, PetroChina started a six-spot CBM pilot in the high-rank Jincheng mining areas of the southern Qinshui basin, near a CUCBM pilot. The coal seam is about 6 m thick and not deeply buried, so that drilling costs are low and the economic benefits are high. The pilot produces about 9,050 cu m/day of gas with 3-5 cu m/day of water.
The Jincheng area has 11 CBM wells, including six appraisal wells.
PetroChina estimates that the area has 406.6 billion cu m in place and 35.2 billion cu m of proved gas reserves.
The CUCBM CBM project, which lies to the north of the PetroChina project, has more than 16 producing wells. CUCBM compresses the gas and ships it in tanker trucks for sale to consumers in Zhengzhou.
Because of the favorable downstream market and relative high producing rates, this area will probable develop as Chain's main CBM producing area during the next 10 years.3
Ordos coal basin
ARCO, Texaco, and CUCBM have assessed the CBM potential of the Hedong project in the eastern Ordos basin. On Oct. 1, 1998, China approved ARCO's 5,000-sq-km CBM contract, consisting of three separate blocks in the Ordos basin.
Arco drilled four appraisal wells in 1997, and Texaco joined the project in 1998 and participated in four pilot wells in the Sanjiao block. Enron Oil & Gas Co. previously had drilled eight test wells in this area and reported favorable permeability in the Shanxi and Taiyuan formation coal reservoirs.
Since assuming control of the license from Enron in 1996, Arco has drilled and hydraulically stimulated nine production wells. Its production evaluation suggests that this project could produce at high gas rates.4
Phillips tested the Hedong CBM Contract area-Linxing block just north of ARCO's lease in the Ordos basin. Following acquisition of high-frequency seismic data during 1997, Phillips has tested gas content and permeability in seven wells within its 3,120-sq-km block. It found that the coal rank and gas content are somewhat lower than in the southern Ordos, but the coal reservoirs are thicker and have higher permeability.
Phillips's block is about 100 km south of the newly completed 36 in., Ordos-Beijing natural gas pipeline, near the west-to-east gas pipeline, and 120 km west of Taiyuan, a major industrial city.
The area has seen many CBM wells drilled from 1997 to 2000, including a five-lateral CBM well in Xing County.5
Huainan, Huaibei coal basin
The Permo-Carboniferous coal-bearing strata of the Huainan coal field contain 32-40 closely spaced coal seams with a total 42-m thickness. The minable coal seams are distributed in the middle lower part of the Permian strata that contains 9-18 target coal seams with a total 18-34 m in thickness.
The area has relatively good data control because of the hundreds of coal exploration core holes drilled throughout the area. The geology is fairly complex but potential gas markets in this industrial area are attractive.
Texaco was the first to sign a CBM contract with CUCBM in the Huaibei area. The contract commenced in Mar. 1, 1998, with Texaco committing to drill three wells within its 2,663 sq km Huaibei block in northern Anhui Province.6
The principal coal seams at Huaibei average 9-15 m in thickness with gas contents of about 12 cu m/ton at a depth of 600 m. Three new wells have been drilled.
Other basins
The Dacheng CBM area lies in North China near Tianjing. PetroChina has drilled six wells since 1994 including five-lateral pilot wells. It encountered an eight-layer coal seam with the thicker No. 3 and 6 coal seams being about 3-6 m in thickness.
The highest gas content was 16.7 cu m/ton and 8.6 cu m/ton on average. The average gas saturation was about 30%.
After water fracturing, the gas production rate ranged from 1,500 to 2,500 cu m/day, the water production rate was higher, about 100 cu m/day.
Liupanshui CBM basin lies in the western part of Guizhou province and has an area of 1,579 sq km. Gas in place is about 1.4 trillion cu m. The main coal-bearing formation is in the upper Permian Longtan and Changxing formations, which have 5-11 layers with a 9-53-m thickness. The thickest single coal seam is about 6 m.
Coal rank ranges from sub-bituminous to anthracite, and the average gas content is above 15 cu m/ton. Some targets with favorable geology include the Panguan, Tucheng, Liuzhi, and Gemudi synclines.
Sinopec drilled two CBM well in 2001 in Liupanshui.
Technological problem
Coalbed methane exploration and development involves geological appraisal, drilling wells, installing casing and other completion equipment, hydraulic fracturing, and production facilities for a group of wells. Both operators and research institutes have developed criteria and standards for developing and producing CBM wells.
In China, only 7% of all coalbed methane wells have obtained commercial gas flow rates. Most early efforts focused on coal mines with low-permeability and were unsuccessful.
Challenges that still face CBM development in China include complex reservoirs, restricted permeability, and a limited gas pipeline network.7 Well testing in the complex geology of Eastern China indicates that coal beds in this area have widespread restricted permeability, generally below 1.0 md.
But China does have active CBM exploration areas such as the Qinshui and Ordos basin, among others.
Vast progress has occurred but some of the remaining technological difficulties include the appraisal of complex coal basin, selecting CBM targets, multilateral drilling, horizontal drilling, coal seam stimulation, well completions, etc.
In the past, foreign technology was not applied in China due to its complicated geological conditions, different coal-bearing basins, multiple gas controlling parameters, among other issues. If available, geologic appraisal would include a program of reservoir mapping and characterization. An integrated approach combining remote imagery, seismic, and core-hole data analysis can identify areas with favorable gas saturation and permeability, reducing exploration risk.
Another problem in developing CBM is an inexact knowledge about China coalbed methane enrichment, reservoirs, and lack of coalbed methane exploration database.
The high cost of drilling and testing technology such as underbalance, multilateral, and horizontal drilling also has affected CBM development in China. Unbalanced drilling can prevent coal seam damage from drilling muds, and multilaterals and horizontal wells can improve gas production rates.
Whether to apply and how to apply hydraulic fracture technology in coalbeds also remains a problem in CBM development. Although hydraulic fracturing can increase the production rates, the technique cannot be applied in all wells. In some CBM tests, such as in An-1, An-2, Da-1, Da1-6, hydraulic fracture created communication with water-bearing strata, resulting in a high water production rate and low gas production rate.
Acknowledgments
The authors thank the technical staff and management of China United Coalbed Methane Co., China National Petroleum Co., ARCO, Phillips, and Texaco for numerous contributions to this article. Also thanks to the staff in the CBM center of Langfang-branch of RIPED, PetroChina.
References
1. Li, H.X., "The development strategy and supportive policies for coalbed methane industry in China," UN Investment Promotion Seminar on Coalbed Methane Development in China, November 1998.
2. Han, D.X., and Yang, Q., Coal geology of China, Coal Industry Press, 1979.
3. Jin, A.X., Li, G.F., Wang, F.M., Liu, G., and Tian, Y.T., "Elementary inquiring of transforming permeability of anthracite coal seam in Jincheng by hydraulic fracturing method," UN International Conference on Coal Bed Methane Development and Utilization, Beijing, Oct. 17-21, 1995.
4. Li, J.L., "The potential for coalbed methane development in Anyang, China," International Coalbed Methane Symposium, University of Alabama, Tuscaloosa, May 12-17, 1997.
5. Quan, Y.K., Wang, L., Hou, H.B., Su, F.Y., and Cai, Y.F., "Simulation technique to evaluate coalbed methane reservoir of Yangjiaping pilot, Liulin area," UN International Conference on Coal Bed Methane Development and Utilization," Beijing, Oct. 17-21, 1995.
6. Derickson, J.P., Horne, J.S., Fisher, R.D., and Stevens, S.H., "Huaibei coalbed methane project, Anhui Province, People's Republic of China," SPE International Conference and Exhibition in China, Beijing, Nov. 2-6, 1998.
7. Reeves, S., et al., "Designing practical reservoir evaluation programs for frontier international coalbed methane plays," International Coalbed Methane Symposium, University of Alabama, Tuscaloosa, May 17-21, 1993.
The authors
Liu Honglin is a technical engineer, working for Natural Gas Institute, Research Institute of Petroleum Exploration and Development, PetroChina Co. Ltd., Langfang, China. His responsibilities include operation and technical support for PetroChina's coalbed methane exploration and development. Liu Honglin holds a PhD in geology from the University of Petroleum in China.
Liu Hongjian is a technical service engineer in PetroChina, Langfang, China. He is responsible for hydraulic fracturing and associated technical support for PetroChina's coalbed methane development. Liu Hongjian holds a BS in mathematics and chemistry from the University of Beijing.
Wang Hongyan is a project manager at PetroChina, Beijing. He is responsible for the development of coalbed methane in China. He has extensive experience in coalbed methane exploration and development. Wang Hongyan holds an MS in coal geology from China University of Mining and Technology.
