01-7748. Improved Recovery From Low-Permeability Formations

AGENCY:

National Energy Technology Laboratory (NETL), Department of Energy (DOE).

ACTION:

Notice of Availability of a Financial Assistance Solicitation.

SUMMARY:

Notice is hereby given of the intent to issue Financial Assistance Solicitation No. DE-PS26-01NT41121 entitled “Improved Recovery from Low-Permeability Formations”. The objective of this solicitation is to demonstrate existing technologies and methodologies, or improve and demonstrate technologies with strong near-term commercialization potential, for increasing production from low-permeability “tight” gas formations. Demonstration of existing technologies should be relatively new to a basin or play.

An Information Package is available on the NETL's Homepage at http://www.netl.doe.gov/​business for viewing and downloading. The Information Package contains general information regarding the proposed solicitation.

DATES:

The solicitation will be available on the DOE/NETL's Internet address at http://www.netl.doe.gov/​business on or about April 6, 2001. Prospective applicants are invited to E-mail any comments and/or questions associated with the information presented to Dona Sheehan via the Internet at [e-mail] by COB on March 30, 2001 as a draft version of the solicitation will not be issued.

FOR FURTHER INFORMATION CONTACT:

Dona G. Sheehan, U.S. Department of Energy, National Energy Technology Laboratory, P.O. Box 10940, MS 921-107, Pittsburgh, PA 15236-0940, E-mail Address: [e-mail], Telephone Number: 412/386-5918.

SUPPLEMENTARY INFORMATION:

As new discoveries from conventional supplies decline, future supplies of natural gas will have to come increasingly from low-permeability (tight) reservoirs. The National Petroleum Council's (NPC) 1992 natural gas study concluded that 232 Tcf of gas could be technically recoverable from low-permeability formations, and assuming that technology improvements continued, the NPC estimated that 349 Tcf of gas could be produced. In their most recent study (1999), the NPC states that deeper resources, resources in deeper water, and nonconventional resources will be the key to future supply. However, under current limitations in exploration and production technology, only a small portion of this vast resource is economic to develop.

A significant portion of natural gas resources in low-permeability formations are found in deep reservoirs and in large gross intervals (over thousands of feet) with many potential pay zones. In addition, most low-permeability wells are marginally productive because an extensive, well-connected natural fracture network is the exception, rather than the rule. These factors indicate that improved recovery technology and reduced costs associated with completion will increase recovery from this vital resource.

Although the high ultimate recovery from wells associated with large natural fractures systems are the exception, these wells can produce 5-10 Bcf. However, these wells often have problems associated with high water production because the natural fracture system connects to overlying or underlying water zones or because they are associated with a fault(s) that provides a pathway for large water influx.

Applications will be accepted for research and development (R&D) in two major areas: (1) Improved completion technology; and (2) identification/remediation of high water production problems from basin-centered gas plays. Priority basins and plays in which the R&D shall be conducted will be identified from previous United States Geological Survey, NPC and NETL studies, but will more than likely include: Greater Green River, Wind River, Anadarko, Permian, San Juan, Piceance, Uinta, Arkla-E.Texas.

Increasing reserves per well with better completion technology or reducing the cost to complete a well will vastly improve the recovery from marginally economic wells. Applications for improved completions can include (but will not be limited to): Cementing, downhole separation/reinjection, stimulation techniques, e.g., comparable fluids, composite fracturing plugs/baffles, and zonal isolation, improved identification of most productive intervals, tubulars (CO₂/H₂ S), multi-lateral horizontal wells, and multiple stimulations from a horizontal well. By identifying the sources and mechanisms of high water production, industry can avoid these areas or complete the reservoir in a way that reduces or eliminates excessive water production. Applications for identification of high water production problems from basin-centered gas plays can include): Regional hydrologic study, water sampling and analysis, new/improved geophysical well log processing, and improved downhole fluid identification.

DOE anticipates issuing financial assistance (Cooperative Agreement) awards. DOE reserves the right to support or not support, with or without discussions, any or all applications received in whole or in part, and to determine how many awards will be made. Multiple awards are anticipated. Approximately $2 million of DOE funding is planned over a 3 year period for this solicitation. National Laboratories may participate as team members; however, they may not act as the prime awardee and total funding to the Laboratory must not exceed 10% of the total project cost. If a project which includes National Laboratory participation is approved for funding, DOE intends to make an award to the applicant for its portion of the effort and to provide direct funding for the National Laboratories portion of the effort as a Field Work Proposal (FWP). DOE has determined that a minimum cost share of 20 percent of the total project cost is required for this solicitation. Details of the cost sharing requirement and the specific funding levels will be contained in the solicitation. The anticipated period of performance of the projects will range in duration from 24 months to 36 months.

Prospective applicants who would like to be notified as soon as the solicitation is available should register at http://www.netl.doe.gov/​business. Provide your E-mail address and click on the “Oil & Gas” technology choice located under the heading “Fossil Energy.” Once you subscribe, you will receive an announcement by E-mail that the solicitation has been released to the public. Telephone requests, written requests, E-mail requests, or facsimile requests for a copy of the solicitation package will not be accepted and/or honored. Applications must be prepared and submitted in accordance with the instructions and forms contained in the solicitation. The actual solicitation document will allow for requests for explanation and/or interpretation.

Issued in Pittsburgh, PA on March 7, 2001.

Dale A. Siciliano,

Deputy Director, Acquisition and Assistance Division.