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Unlike conventional reservoirs, coal seams are the source, trap, and reservoir for CBM. A comparison of the two reservoir types shows profound differences in reservoir properties, storage mechanisms, flow mechanisms, and production profiles. CBM reservoirs are layered and contain an orthogonal fracture set called cleats, which are perpendicular to bedding. Because the coal matrix has essentially no permeability, CBM can be produced economically only if there is sufficient fracture permeability. Relative to conventional gas reservoirs, coal seam permeabilities are generally low and may vary by three orders of magnitude in wells separated by distances of less than 500 m.
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Case studies can be instructive in the evaluation of other coalbed methane (CBM) development opportunities. The San Juan basin, located in New Mexico and Colorado in the southwestern U.S. (Figure 1), is the most prolific CBM basin in the world. It produces more than 2.5 Bscf/D from coals of the Cretaceous Fruitland formation, which is estimated to contain 43 to 49 Tscf of CBM in place. For a long time, the Fruitland formation coals were recognized only as a source of gas for adjacent sandstones. In the 1970s, after years of encountering gas kicks in these coals, operators recognized that the coal seams themselves were capable of commercial gas rates. CBM development benefited greatly from drilling and log data compiled from previous wells targeting the deeper sandstones and an extensive pipeline infrastructure that was built to transport conventional gas. These components, along with a U.S. federal tax credit and the development of new technologies such as openhole-cavity completions, fueled a drilling boom that resulted in more than 3,000 producing CBM wells by the end of 1992. The thickest Fruitland coals occur in a northwest/southeast trending belt located in the northeastern third of the basin. Total coal thickness in this belt locally exceeds 100 ft and individual coal seams can be more than 30 ft thick. The coals originated in peat swamps located landward (southwest) of northwest/southeast trending shoreline sandstones of the underlying Pictured Cliffs formation. The location of the thickest coals (Figure 1) coincides with the occurrence of overpressuring, high gas content, high coal rank, and high permeabilities in the San Juan fairway ("fairway"). The overpressuring is artesian in origin and is caused by water recharge of the coals through outcrops along the northern margin of the basin. This generates high vertical pressure gradients, ranging from 0.44 to 0.63 psi/ft, which allow a large amount of gas to be sorbed to the coal. Coal gas in the San Juan basin can contain up to 9.4% CO2 and 13.5% C2 . Chemical analyses suggest that thermogenic gases have been augmented by migrated thermogenic and secondary biogenic gas sources, resulting in gas contents ranging up to 700 ft 3 /ton. Coal rank in the fairway ranges from medium- to low-volatile bituminous and roughly coincides with those portions of the basin that were most deeply buried. Coals in the fairway typically have low ash and high vitrinite contents, resulting in large gas storage capacities and excellent permeabilities of 10 md from well-developed cleat systems. Southwest of the fairway, Fruitland coals are typically 20 to 40 ft thick and are considerably underpressured with vertical pressure gradients in some areas of less than 0.20 psi/ft.
The commercial success of any gas project depends on a number of critical factors including gas production rates, capital requirements, operating costs, gas markets, and economies of scale. In conventional gas projects, gas rates are known from well tests before development, and capital costs for water processing and disposal typically are deferred until later in reservoir life. High-value gas contracts can be established at project startup with reasonable certainty that a specified plateau rate can be maintained for many years. In contrast, coalbed methane (CBM) reservoirs initially produce little or no gas and require a large initial capital commitment for well drilling, stimulation, and water handling. Because it may be several years before commercial gas rates are achieved, if at all, it can be difficult to obtain long-term gas contracts or financing.