In a project involving a number of operational firsts for Australia’s CSG industry, ESG’s first two multi-lateral production pilots have been completed and commenced production.

The company has estimated that multi-lateral wells will achieve gas flow rates up to ten times greater than those achievable from conventional wells in the same coal, so completion of the first multi-lateral pilots is a major milestone for the company.

Each of the completed pilots comprises three vertical production wells that are intersected by two horizontal – or lateral – wells. Each of these laterals is about one kilometre deep and then travels through the coal seam for another kilometre.

Multi-lateral well production

ESG has adopted the lateral drilling technique because of the unique vertically-fractured architecture of target coal seams within Petroleum Exploration Licence (PEL) 238.

The coal is characterised by a series of sub-vertical fractures running parallel to each other with a southwest to northeast orientation, and passing through the entire thickness of the coal seam. Unlike normal coals, the coals found within PEL 238 have no secondary or tertiary cleating system interconnecting with the primary fractures. By drilling horizontal ‘laterals’ roughly perpendicular to the natural fracture network, it is possible to intersect literally thousands of fractures, thereby maximising communication with the coal seam. These fractures represent the pathways through which water, and subsequently gas, can flow. So themore fractures that are intersected, the greater the eventual flow of gas.

Early results have already justified the company’s decision to adopt the lateral drilling technology. During initial testing, the first multi-lateral pilot free-flowed in excess of 3,400 bbl/d of water, confirming that the lateral wells had established effective communication with the fracturing system of the coal.

While it is likely to take some time for the full potential of the multi-lateral well design to be realised, ESG is already working on plans to build upon the initial success through a range of optimisation initiatives. For example, the next multi-lateral production pilot, now being drilled at Bibblewindi West, incorporates three laterals, all drilled from a single location. Looking to the future, ESG expects to be able to achieve further design refinements through increasing the length of the laterals, drilling for two or more kilometres through the coal, and by increasing the spacing between laterals.

Facilitating Narrabri growth

ESG is prepared for the healthy gas production rates that the multi-lateral wells are expected to achieve. Water and gas gathering systems have been preinstalled to allow production to be transferred to a central Bibblewindi location for processing and handling.

The main backbone of the gathering system to Bibblewindi from the first two multi-lateral well-sets was constructed from 315 mm diameter polyethylene for gas, and 250 mm diameter polyethylene for water. By having preinstalled the gathering system, operation of the multi-lateral wells could commence as soon as the wells were completed and, in addition, gas was initially transferred from Bibblewindi back to the multi-lateral wells as fuel for onsite electricity generation (thereby avoiding the need for the short term use of diesel generation before the wells became self-sufficient in terms of gas production).

Fibreglass field pipeline

ESG has also been at the vanguard of innovation from a pipeline development perspective. The company opted to use screw-jointed fibreglass (or screw-jointed epoxy) for a medium pressure raw-gas transfer line from Bibblewindi to the Wilga Park Power Station. The 250 mm diameter, 33 km gas flowline is almost complete.

Advantages of using fibreglass pipe included:

• Ease of construction;
• The ability to operate the pipeline at elevated pressures to increase throughput if need be, and the possibility of using the pipeline to transfer water instead of gas;
• Freedom from corrosion problems associated with transport of raw gas in steel lines; and,
• The narrow right of way requirement achieved by using over-the-trench construction techniques.

The Wilga Park Power Station is being upgraded in preparation for the ramp up in gas production expected as the multi-lateral production pilots come online. The first of up to twelve new 3 MW gas engine-driven generators came online late in June, with additional generators expected to be installed as gas production continues to climb. Approval is in place for the total capacity of the Wilga Park Power Station to be increased to 40 MW.

Opportunities in the pipeline

Use of gas at the Wilga Park Power Station is the first marketing step for ESG and its joint venture partner Gastar Exploration. The ultimate objective is to supply gas into the New South Wales gas market and, with this in mind, ESG has entered into a Heads of Agreement with the APA Group, the objective of which is to see Narrabri CSG delivered through APA’s New South Wales gas transmission system.

Subsequent to APA’s acquisition of the Central Ranges Gas Pipeline last year, the company’s pipeline system is now within approximately 100 km of the Narrabri project. Development of a new lateral from the project to the Central Ranges Pipeline will see Narrabri CSG gain access not only to the Central Ranges and Central West gas markets, but to the New South Wales gas market more generally. As gas supplies and markets grow, the capacity of APA’s system to move gas can be progressively expanded, or complementary new pipeline laterals can be developed.

In the longer term, ESG is confident that commercialisation of its Narrabri project will see it achieve its goal to become New South Wales’ major supplier of gas with resources to spare. In preparation for this, the company is also starting to investigate ways to access and secure even larger markets. And with this may come a need for further gas pipeline infrastructure development. Interesting times are ahead for the company, and also for the pipeline industry, as ESG continues on its journey from explorer to major market player.