1. WP4: Assessing capacity for CO 2 storage in selected regions of China Jonathan Pearce 23 rd October 2008

2. Outline Introduction to WP4 Objectives Regional studies Site assessments Outputs

3. WP4 Partners UK British Geological Survey (BGS) BP Heriot Watt University Shell China China University of Petroleum (CUP) – Beijing and Huadong Institute of Geology and Geophysics, Chinese Academy of Sciences (CAS) China United Coalbed Methane Co Ltd (CUCBM) Jilin Oilfield PetroChina

4. WP4: Storage Options Objectives: –Build capacity in China for evaluating storage potential and performing appropriate first stage site characterisation for site selection. –Estimate the future potential for CO 2 storage. –Mapping of CO 2 sources and potential sinks will be carried out. Tasks: –Regional basin assessments of storage potential for EOR, ECBM and saline formations –Site-selection and assessments for demonstration of storage. –GIS-based decision support tool will be developed.

5. Storage Options Saline formations –Songliao Basin As part of enhanced oil recovery operations –Songliao Basin (Jilin and Daqing oilfields) –Subei Basin (onshore only, Jiangsu oilfield) As part of enhanced coalbed methane production –Qinshui Basin

7. WP4 Progress WP4 launch meeting in January 2008 –Agreed timetable for project –Agreed basins for assessment Basin methodologies workshop in May 2008 –Agreed methodologies for regional basin assessments –Reviewed initial results for all regions Basin Assessment Conference in July 2008 –Joint meeting with COACH and GeoCapacity –Reviews of preliminary results for all current projects estimating storage capacities in China. Interim report completed August 2008

8. Resource-Reserve pyramid Carbon sequestration leadership forum (CSLF) 2007 Theoretical Capacity – Assumes entire space is accessible and utilised to its full capacity. This is the maximum upper limit for storage potential. Effective Capacity – (previously known as realistic capacity) Similar to theoretical capacity, but with a number of geological and engineering limitations applied. Practical Capacity – subset of effective capacity which is gained by considering non-geological components (e.g. economics, regulation, legal infrastructure). Matched Capacity – subset of practical capacity and is obtained by matching sources to suitable sites.

9. Daqing Oil Field discovered in 1959 Jilin Oil Field discovered in 1959

10. Note: No net to gross ratio applied Field-specific estimate 1 (Mt) CSLF effective capacity (Mt) Oil field1%2%10% Lamadian1122109 149 Sa’ertu1631157 226 Xingshugang51050 72 Gaotaizi0.1 0.6 1 Taipingtun0.30.62.6 4 Putaohua0.40.54.4 6 Aobaota0.12.60.7 1 total3265324 459 Daqing oilfield estimated capacities 1 CUP methodology - Assumes volumetric replacement for oil and dissolution in both oil and formation water

11. Jillin Oilfields estimated capacities Note: No net to gross ratio applied CSLF effective capacity (Mt)Field-specific estimate 1 (Mt) Oil field0.010.020.10 Hongang0.300.603.003.7 Xinli0.631.256.258.2 Mutou0.190.391.952.7 Qian’an1.352.7013.5018.4 Yingtai1.092.1810.9214.9 totals473647.9 1 CUP methodology - Assumes volumetric replacement for oil and dissolution in both oil and formation water

12. CUP methodology assumptions Assumptions: –Closed oil reservoir, sealed by faults and impermeable layers –When CO 2 is injected, oil and water are produced at the wells and the pressure is maintained –Pore volume of aquifers is equal to that of overlying oil field (data on aquifers is often not available publicly)

13. ① Jinhu ② Gaoyou ③ Qintong ④ Hai'an ⑤ Baiju ⑥ Yancheng ⑦ Funing ⑧ Liannan ⑨ Lianbei ⑩ Hongze ① ⑩ ⑨ ⑧ ⑦ ⑥ ⑤ ④ ③② Troughs Caoshe Oilfield Binhai Uplift Yanfu Depression Dongtai Depression Jianhu Uplift --Oilfield

14. Jiangsu oilfield is operated by Sinopec, with light to medium oils, good for near-miscible CO 2 flooding There are 34 proved big oilfields in Jiangsu Oilfield, most oil reservoirs are 2000-3000 meters deep Cumulative proven OOIP is 196.24 Million tons Proven OGIP is over 8 billion m 3 Developed and producing reserves is 186 Million tons. Several CO 2 miscible displacements have been tried in the field with good EOR response. Jiangsu Oilfield

15. Assessment results 108 oil reservoirs of Jiangsu Oilfield have been assessed. –Total CO 2 storage potential is 20.4614 Mt. 75 reservoirs are suitable for CO 2 EOR. –Calculation assumes CO2 trapping during EOR process only –Storage capacity of 15.76 Mt during the EOR process 33 reservoirs are suitable for CO 2 storage. –Based on volume of recoverable reserves –Storage capacity of 4.70 Mt

16. Assessment results For all the 108 reservoirs in Jiangsu oilfield, the total OOIP is 132.37 Mt, and For the 75 reservoirs suitable for CO2 EOR, the OOIP is 84.32 Mt, and the CO2 storage potential during EOR process is 15.76 Mt. the incremental oil production is 4.67 Mt, and the incremental recovery factor is 5.71%. That is equivalent to 0.3t oil due by 1t CO2 injection. For the 33 reservoirs unsuitable for CO2 EOR, the OOIP is 48.05 Mt, the CO2 storage potential in depleted reservoirs is 4.70 Mt.

17. Based on OGIP of 8x10 9 m 3 we can further estimate If we assume: –OGIP equates to a useable pore volume and gas is produced –The OGIP figure is at surface conditions and therefore is corrected for volume in reservoir (a gas expansion factor is assumed to be 200 based on North Sea experience) –A recovery factor of 70% (based on North Sea experience) and 700 kgm -3 CO 2 density Then total storage volume is 20 Mt This may refined if further site-specific data becomes available.

18. Stratum of Songliao Basin main saline aquifer: Qingshankou Fm well1 well2 well3 K2qn K2n K2q K2y The stratigraphic sequences are dominated by Cretaceous fluvial and lacustrine strata with volcanic and volcaniclastic rocks. 5 hydrostratigraphic units classified from bottom to top: JD, K2q, K2qn, K2y, K2n

19. Effective storage capacity of Deep saline aquifers in Songliao Basin (Storage coefficient of 1–2–10% applied)  Songliao Basin (260,000 km 2 )  Average height 380m  Average reservoir porosity 10%  CO 2 density at reservoir conditions 700 kg/m 3  Total regional effective storage capacity: Note: No net to gross ratio applied CSLF effective capacity (Mt) 1%2%10% 69160138320691600

20. Next steps… Finalise basin reports Site assessments and reports Recommended sites for feasibility studies in Phase 2

21. Conclusions Jilin, Daqing and Jiangsu oilfields offer variable potential for CO 2 storage –They provide some storage potential as niche opportunities for CO 2 -EOR – especially in Jilin and Daqing –Small pilot CO 2 -EOR projects are already being undertaken –As such may provide incentives for a small-scale pilot demonstration of CCS. Theoretical calculations for a selected saline aquifer suggests that the Qingshankou Formation could offer very large storage capacities –However, this is based on very low data density (concentrated around oilfields) –Further primary data acquisition is necessary to refine this estimate. –Comparisons with underlying reservoirs suggest specific field geology likely to be equally complex.

22. Jonathan Pearce British Geological Survey, United Kingdom. Email: jmpe@bgs.ac.uk Tel: +44 (0)115 9363222jmpe@bgs.ac.uk