6 EvALUAtiON OF SOUtH AFricA’S tEcHNicAL rEADiNESS tO SUPPOrt
6.1 Well construction and closure
6.1.11 Availability of cement in South Africa
One of the leading suppliers of oil well cements (Imerys Oilfield Solutions25) has mines all around the world and also in South Africa and one of the ingredients, bentonite, is mined in South Africa.26 The volume of cement produced annually by the Pretoria Cement Company is reported to be more than 7 million tons per year.27 (The entire market capacity obviously is much larger, however exact volumes could not be sourced.) The required cement volume for a standard well as defined in Section 6.1.1 is shown in Table 6-1. It is assumed that all casing strings, except the production casing, are cemented back to surface. The overlap of the cement between the production and intermediate section is 60 m (Natural Resources Defense Council, 2012). An annular open-hole excess volume of 20% is considered in addition.
table 6-1: Future cement demand
Dimension Scenario
Casing Length (Conductor, Surface, Intermediate, Production)
(m) 30 400 2 200 4 700
Casing Diameter (Conductor, Surface, Intermediate,
Production)
(in) 20 13⅜ 9 ⅝ 5½
508 340 244.5 139.7
Cement Slurry Volume (m3) 2 33 80 75
cement mass per Well (t) 226
mass for 600 Wells per year (t/a) 135 000
Table 6-1 shows that even for a full-scale development, only 2% of the Pretoria Cement Company’s cement production would be required to supply all the wells with enough cement. As there are many more producers in South Africa, it is not anticipated that the supply of cement would be a major issue. The issue, however, is the cement quality. South Africa only makes Portland cements under the South African Bureau of Standards specification SANS 50197 (based on the Euro specification (EN) 197). These are general building and construction cements. Deep oil wells require special cements that are not covered by SANS 50197. These special cements are also essentially Portland cements, but with significantly different properties (e.g. more coarsely ground, significantly lower early strength, fairly low aluminate contents depending on the aggressiveness of the groundwater, and carefully controlled sulphate contents to control
25 Imerys Oilfield Solutions: http://www.imerys-oilfieldsolutions.com/Bentonite.html. Website last visited:
10 November 2014.
26 Ibid.
27 Wikipedia, http://en.wikipedia.org/wiki/Pretoria_Portland_Cement_Company, Webpage last visited:
14 November 2014.
early setting). Thus, production processes of domestic cement producers would have to be adjusted to make the required Portland cement available within the country. Cementing services of the major oilfield service providers are not available directly in South Africa. However, it is anticipated that the experience in the USA would allow those companies to transfer the experience and equipment into South Africa if necessary.
6.1.12 Availability of Casing in South Africa
There is only one producer, namely Arcelor Mittal, which meets API, ISO and the Euro specification (EN) standards for tubular products and casing manufacture for the oil and gas industry in South Africa. The plant is located in Vereeniging and produces 100 000 tons of final tubular products each year. According to the company website, 80% of that is exported.28 It is very likely that if the market develops, it will be commercially viable for producers to manufacture the required steel pipes within South Africa, as not only casings will be required but many more steel pipes, such as pipelines. However, for increased quantities of steel pipes with the required qualities, either domestic producers will have to increase their production capacity or pipes will have to be imported from the international market.
In the USA, 4½” to 7” (114.3 mm 177.8 mm) casings are installed in the production section of wells (Guo et al., 2012). If the entire casing production of Arcelor Mittal, viz. 100 000 tons per annum, were to be allocated to manufacture production casing strings, there would still not be enough.
The current production for the entire string of 600 wells per annum would satisfy slightly more than 50% of the demand.
Regarding casings, it can be concluded that for a development of scale, heavy investments in pipe building capacity would have to be established if these are to be locally sourced.
6.1.13 Summary
The following conclusions can be drawn regarding challenges and options for South African shale gas drilling operations.
Shale gas development is a manufacturing process unlike conventional oil and gas developments on and offshore. Consequently, it is necessary to build a robust field development model to understand and plan all relevant aspects of establishing the technical capacity to develop the field, including environmental and socio-economic impacts. It is also necessary to perform pilot field development work as part of the exploration phase to establish a local technical baseline as input to
28 Arcelor Mittal South Africa: http://www.arcelormittalsa.com/Operations/TubularProducts.aspx.
Webpage last visited: 6 November 2014.
the model (water usage, resource requirements, emissions). Without this information, strategic decisions and negotiations of production licensing agreements with potential operators will not be efficient.
General problems related to shale gas drilling include the following:
• For shale drilling, a large number of the production sections are drilled with OBMs. Using WBMs for the entire well requires specific developments and research of such muds for every type of shale. If South Africa opts for an environmentally friendly development, effort has to put into the mineralogical evaluation of the shale formation to develop specific WBMs.
• Direct water requirements for shale gas/oil well operations are estimated to be 3 800 m3 to 26 300 m3 per well. Indirect water consumption can require an additional 4 000 m3 to 12 000 m3 of water per well. As the Karoo Basin is an arid area, water is difficult to source. Given that it is most unlikely that it will be acceptable to use groundwater from shallow aquifers, the main source of water will be from deep saline aquifers. Operators will have to present detailed water management plans e.g. source of water, chemicals injected, reuse and recycling plans and wastewater management.
• Due to the quality requirements, many constituents such as TDS and other constituents such as NORMs would have to be reduced to certain limits.
• Casings are standard products in the oil industry and various standards exist. Minimum specifications are those of the API and ISO. Those standards should be evaluated for local circumstances and may lead to additional requirements being imposed by the regulator.
• CH4 spills into the environment during shale gas production do occur and can be related to well-head secondary barrier failures and/
or leakages in pipelines and gas separation/processing facilities.
From the well construction point of view, some innovative well-head solutions exist which could be adopted for shale gas wells on a large scale in the near future.
• Installing the production casing string up to the surface is a standard application in the oil and gas industry. An important consideration is that the regulator should require two barriers for the fluids, be it production casing and intermediate casing, tie-back liner and intermediate casing or another configuration.
• Contamination of groundwater by liquids related to well-bore integrity failures is extremely unlikely. More likely is the contamination with gas if
primary barriers fail. Cementing best practices have been developed to minimise these risks. As a consequence, however, strict regulations are required to evaluate the quality of cement jobs, the integrity of the cemented casing shoe and the existence of a minimum continuous bounded interval.
• Pressure test operations are of paramount importance for oil and gas wells, especially shale gas wells which pose a special risk because of the additional high-pressure hydraulic fracturing treatments.
Operators should follow special regulations to ensure well integrity under high pressure over the entire life cycle of the well.
• The legislation for well closure must be defined carefully to ensure a proper sealing of the well after the production period. The regulator has to define the liability of potential issues after well closure.
Special challenges related to shale gas drilling in South Africa include issues relating to the provision of an adequate number of rigs, availability of casings and the correct quality of cement, and the development of the necessary skills base within the country. Ensuring well-integrity must remain the highest priority to prevent short term air pollution, and long term (>50 years) contamination of the critical zone (ecosystems, soil, water). There must be lifelong instrumentation (processes) in place to monitor ‘closed wells’ and there is a need for clarity on severance or well-retirement tax, irrespective of a reported/immediate damage.