(66a) Optimization of Shale Gas Supply Chain Network and Water Management Using Reservoir Simulation

Technological advancements in hydraulic fracturing and horizontal well drilling have provided access to abundant new sources of natural gas, particularly in the United States¹. Following the commercial implementation of these techniques, the contribution of natural gas from unconventional reservoirs, particularly from shale, has become a significant percentage of the total natural gas production in the U.S.A. Nonetheless, the significant increase in the number of horizontal wells drilled with the aim of increasing production has not yet translated into more economic shale gas projects. Moreover, the current low price of natural gas has only deteriorated the situation of several shale gas development projects.² In this context, the utilization of re-stimulation techniques that boost production from mature wells may present an alternative to improve the economics of these projects. Therefore, a comprehensive economic model for shale gas supply chain needs to provide not only the schedule for dissemination of products to the different nodes of a supply chain network, but also precise drilling, fracturing, and re-fracturing strategies for the wells developed in the different pads.

In this work, we utilize the geological properties of a typical shale reservoir, which plays a major role in predicting the fluid production rates obtained after implementing stimulation operations. The result of this realization is integrated with the schedule of operations downstream including the transportation of natural gas to the different nodes of demand, and the design of the supply chain network. Additionally, the management of freshwater and wastewater is incorporated in the optimization framework including the possibility of variation in concentrations of total dissolved solids (TDS) and other major contaminants. A simulation of the shale reservoir is performed utilizing CMG’s GEM software. In the same simulation, several designs and operations are selected for the development of shale wells including different number of stages and lengths and the possibility of having fracturing or fracturing and re-fracturing operations. The possibility of implementing tri-fracturing is also investigated in this work. Finally, output data including fluid production rates, amounts and composition amongst other parameters are incorporated into a mixed integer linear programming (MILP) model. This MILP model is developed in GAMS optimization software, in order to determine the appropriate drilling strategy, schedule for product transportation, and supply chain network configuration including the optimal re-utilization of water to optimize the net present value of the project.

The proposed framework represents a decision making tool that can be used by energy companies with shale and non-shale assets, whose interest lies in finding an economically optimal strategy for well asset development, distribution of natural gas and other associated products, and sustainable management of water.

References

1. Asala H, Ahmadi M, Dahi-Taleghani (2016): Why Re-Fracturing Works and Under What Conditions. SPE paper 181516-MS prepared for presentation at the SPE Annual Technical Conference and Exhibition held in Dubai, UAE, 26-28 September.

2. M. Eshkalak, U. Aybar: “An economic evaluation on the re-fracturing treatment of the U.S. shale gas resources”, SPE Eastern Regional Meeting held in Charleston, WV, USA, 21-23 October 2014.