Understanding Value of Appraisal Information through Geologically-Constrained Engineering Scenario Analysis in Economic Modeling of CO2 Storage Site

Abstract

Carbon dioxide (CO2) geological storage is considered in many large "greenfield" developments. The requirements for long-term injection operations have put a premium on obtaining the right information early, constraining engineering solutions and costs before major investment decisions are reached. Information such as long-term field pressure evolution and local fracture gradient alteration may have major impacts on development cost forecast. Reservoir heterogeneity and compartmentalization may result in continuous reservoir pressure escalation as injected CO2 amount increases. Maintaining rate is essential to avoid venting. However, this requires proportionate injection pressure increases—an option bounded by formation integrity, seal capacity, and well interference limits. When operating conditions approach these limits, one may avoid compromising rate by, albeit costly, drilling more injection wells over time. We investigate the impact of mean reservoir parameter and boundary condition assumptions on project economics. The potential impact of injection temperature on formation integrity and in-field power needs is also explored. Well injection rate is estimated analytically using a Darcy law's approximation. Taking high seal entry pressures as a given, the study defines allowable injection pressure in terms of fracture gradient. Upward fracture gradient adjustment is modeled for escalating reservoir pressure, allowing mitigation of injection rate reduction. We later analyze the variation of fracture gradient with injection temperature to account for thermal fracture limitation. Ultimately, the study presents pre-tax break-even CO2 unit technical costs in dollar per tonne injected, providing comparison of relative economic performance among the investigated scenarios. The results demonstrate the importance of reservoir quality in suppressing cost-intensive injection well and CO2 heating requirements. The range of costs indicates the value of early appraisal information before making development decisions. The application of geologically-constrained engineering analysis in economic modeling is useful in providing insight on value of information as well as supporting decisions for CO2 storage site development.