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Home My WebLink About2008 Kenai Gas Fielda Marathon Oil COMPany March 1, 2009 RECEIVED Y C -9-S FEB 2 * 2009 Alaska Oil $ Gas Cons, Commission Anchorage Commissioners: John Norman, Dan Seamount, Cathy Foerster Alaska Oil and Gas Conservation Commission 333 W. 7th Avenue Suite 100 Anchorage, AK 99501-3539 Re: Storage Injection Order 7 -8+39 Annual Gas Storage Performance Evaluation g�oa3 Dear Commissioners: Alaska Asset Team P.O. Box 196168 Anchorage, AK 99519-6168 Telephone 907/561-5311 Fax 907/565.3076 Marathon Oil Company (Marathon) respectfully submits the attached information to fulfill the requirements of Rule 5 of Storage Injection Order #7, dated April 19, 2006. Rule 5 requires, in part: "An annual report evaluating the performance of the storage injection operation must be provided to the Commission no later than March 15. The report shall include material balance calculations of the gas production and injection volumes and a summary of well performance data to provide assurance of continued reservoir confinement of the gas storage volumes." After almost 48 years of continuous production, the Sterling Pool 6 continues to exhibit tank -like behavior. Marathon has not observed, and has no information indicating, any change to this behavior as a result of gas injection and storage operations which began on May 8, 2006. Marathon has conducted gas storage operations in compliance with the rules and conditions of SIO #7. All required data, other than form 10-413 as explained below, have been submitted to the AOGCC. From the time of first injection through the period ending December 31, 2008, the total volume of gas injected into Pool 6 was 7,162,816 mscf. The total volume of stored gas withdrawn was 1,503,809 mscf. The total volume of native gas withdrawn was 7,721,216 mscf. The maximum calculated reservoir bottom -hole pressure during the 2008 injection cycle was 187 psia (KBU 23X-06, June 2008) far below the maximum of 300 PSI permitted under Rule 4 of SIO -7. Attached, please find Exhibit #1, a summary of the results of a recent update to the Sterling Pool 6 reservoir model, which is submitted to satisfy the annual performance evaluation requirements for material balance calculations. The reservoir pressures used in the model were shut-in tubing pressures obtained from our SCADA system which were converted to bottom -hole pressures at mid -perforation. The field was shut in on May 13, 2008 and October 17, 2008 to obtain pressure data (Exhibit 1 M). Modeling work shows a direct response to injection and withdrawals from the reservoir. Each observed shut-in well pressure correlated to the model's prediction. In summary, the model's prediction is consistent with observed pressures and injection/withdrawal volumes. The observed static pressures gathered have slight variations from the P/Z line (Exhibit 4). The reason for the variations can be explained by examining the pressure distributions predicted by the simulation model (Exhibit 1 N). There is an aerial as well as temporal variation of pressure in the reservoir. This implies depending upon the location of the specific wells chosen for pressure measurements and the time of the year when the pressures are measured, the average measured pressure could be slightly higher or lower than P/Z line. This is consistent with the observed departures from the P/Z values in Exhibit 4. Exhibit #2 is a plot showing the performance of the injection wells (KU 31-07X and 23X-06) during 2008. Exhibit #3 is a table showing monthly injection and withdrawal volumes plus allocated balances between Native and Stored gas. Exhibit #4 is the original P/Z plot contained in the application for gas storage. Exhibit #5 is a plot showing monthly averaged production rates, injection rates and field average pressure. Although Form 10-413 appears to be required by statute, the form has not been submitted because we interpret it to be applicable only to enhanced recovery projects rather than gas storage projects. Additional guidance is requested regarding the applicability and necessity of Form 10-413 for this gas storage project. If you have any questions, please do not hesitate to contact me at: 713-296-3390 or dszalkowski(!-)marathonoil.com —'— Sinc tely, Scott Szalkowski SUBSURFACE SUPERVISOR MARATHON OIL COMPANY Enclosures Via Certified Mail cc: Greg Noble, BLM Kevin Banks, Alaska DNR, Dept of Oil & Gas Lyndon (bele, Marathon File 2 Exhibit #1 (1A — 1 L) Comparisons of Observed Pressures vs. Expected Pressures from Eclipse t,„ Model • KDU-5 Exhibit 1A • Well 43-06RD Exhibit 1 B • Well 34-32 Exhibit 1C • Well 34-31 Exhibit 1 D • Well 33-07 Exhibit 1 E • Well 33-06 Exhibit 1 F • Well 31-07X Exhibit 1G • Well 23X-06 Exhibit 1 H • Well 21-06RD Exhibit 11 • Well 14X-06 Exhibit U • Well 14-32 Exhibit 1 K • Well 13-06 Exhibit 1 L For each well listed above two plots are presented showing historical observed shut-in pressures against those predicted by the Eclipse simulation model. The upper plot encompasses the entire historical life of the Pool 6 reservoir. The lower plot shows the same data beginning in the Year 2003. There is agreement between the pressures predicted by the simulation model and those observed at each well. There are some minor differences in pressures taken between 2003 and 2008. The minor variations can be attributed to the following conditions. 1) Simulation uses average monthly production rates rather than daily rates. 2) Some of the observed pressures are obtained from SCADA, which are less accurate as compared to test gauges used for biannual pressure measurements. 3) Some of the data was obtained when the field was not completely shut in as desired, to compare against the simulated shut in pressures. Conclusions 3 • Eclipse Model was updated to include production and injection volumes through December 2008 • The pressures predicted by the Eclipse model were compared to pressures observed in the various wells in 2008 • The pressures observed in the various wells compared very favorably with those predicted by the simulation model • Storage Unit did not exceed maximum allowable pressure of 300 psis • Sterling Pool 6 continues to maintain reservoir confinement. LI