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Home My WebLink About2009 Kenai Gas FieldRECEIVED Abska Asset Team MAR 1.2 2010 Alaska Oil & Gas Cis. Commission Marathon P.O. BOX 166166 Aneboraw into -an Alaska Production LLC Anchorage, h 99519-6168 1 5 61 i 68 Fax 907/565-3076 March 11, 2010 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 2009 Annual Gas Storage Performance Evaluation Dear Commissioners: Marathon Alaska Production LLC (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. For the annual period ending December 31, 2009, the total volume of gas injected into Pool 6 was 10,472,372 mscf. The total volume of stored gas withdrawn was 418,249 mscf. The total volume of native gas withdrawn was 710,108 mscf. The maximum calculated reservoir bottom - hole pressure during the 2009 injection cycle was 243 psia (KBU 31-7x, Nov -2009) 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. Additionally, the field was shut in on May 13, 2009 and November 23, 2009 to obtain the pressures. Modeling work shows an expected direct response to injection and withdrawals from the reservoir prior to 2009. Each observed shut-in well pressure prior to 2009 correlated well with the model prediction. However, the predicted pressures by the simulation model in 2009 are considerably lower than the observed pressures. There is no evidence that indicates there has been any loss of resource. We will continue to monitor the pressure discrepancy seen in 2009. The observed static pressures gathered are considerably different from the expected P/Z line (Exhibit 4). The reason for this variation can be explained by examining the pressure distributions predicted by the simulation model (Exhibit 1 N) and the reasons listed on page three. 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 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 2009. 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: 713-296-3310 or mievans@marathonoil.com Sincerely, Michael Evans 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 RAI Exhibit #1 (1 A —1 L) Comparisons of Observed Pressures vs. Expected Pressures from Eclipse Model • KDU-5 • Well 43-06RD • Well 34-32 • Well 34-31 • Well 33-07 • Well 33-06 • Well 31-07x • Well 23x-06 • Well 21-06RD • Well 14x-06 • Well 14-32 • Well 13-06 For each of the wells 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. As can be seen for each of the wells, there is, in general good agreement between the pressures predicted by the simulation model and those observed at the individual wells prior to 2009. There do appear to be some minor differences for the historical pressures during 2003-2008 when plotted on an expanded scale. The minor variation could be attributed to the following reasons: 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. There appears to be a considerable pressure difference between the pressures predicted by the simulation model and the observed pressures in each of the wells for 2009. The pressure variation could be attributed to the following reasons: 1) Simulation model incapable of handling high injection volumes 2) Potentially attached to an aquifer or leakage from another zone, although there has not been any evidence indicating this over the past 48 years. Conclusions • Eclipse Model was updated to include production and injection volumes through December 2009 • The pressures predicted by the Eclipse model were compared to pressures observed in the various wells in 2009 • The pressures observed in the various wells compared favorably with those predicted by the simulation model prior to 2009 • Storage Unit did not exceed maximum allowable pressure of 300 psia • There is no evidence of containment issue • We are monitoring the observed pressure variation in 2009 11 Sterling Pool 6 - S107 Exhibits February 2010 M� MARATHON O . SBHP observed (F�wryf —_.-s5w sm�ree (an ar<ue miarax� 2000 O Un 1000 D- V) N j i i 0 111960 1/1965 111970 1/1975 1/1980 111985 1/1990 Date -- Simulated SBHP - Eclipse — Well Gas Production Rate Obserjed SBHP till 2007 400 300 (D 200 Q L In rn P L 0- 100 0 t { i 1/2000 1/2005 1/201 Date Exhibit 1 A: Well KDU-5 16 14 r7 O X 12 Q O 10 U (/1 8 d ry C- 6 O U 4 OL 0 N U 2 0 M\\ 11 i, , I, obsen2d(F$9orY)—smws�m�ea(m�arnw miomw7 _-..SBtP sinMetl(2QIN$IN i(HFlR(Bf}- �Bg sanuMea(2(n0f6�T1211f0PW) Date Exhibit 1 B: Well 43-06RD ' 'M i 1 200a 1 I 6 i I j 1 i i 1000 Q N L 1 i E cn L � 3 ! � 1 0 } 111960 111965 111970 1/1975 1/1980 1/1985 1/1990 111995 112000 1/2005 1/2010 Date --Simulated SBHP- Eclipse —Well Gas Production Rate — Observed SBHP till 2007 400 16 - i I 14 i 9 C) 300 —12 t0 Ci s ... V) O 200 8 4J to i3 6 0 n :t-. [n U N � too — -4 IL 2 � 0 Date Exhibit 1 B: Well 43-06RD ' 'M WeD Bottom .• observe6 (F&slbryj —sc ws�m�eo(zmawan zmoq(sa� .____sere s�m�.v� (meow(. a ��n —�rsr sr�wm<a(zmaAuw zmur+uw7 2000 1 i i _) 1000- 00001/1960 Q 0- 1/19601/1965 1/1970 1/1975 1/1980 1/1985 1/1990 1!1995 112000 1/2005 1/2010 Date '—Simulated SBHP- Eclipse Well Gas Production Rate Observed SBHP till 2007 400- 16 14 r7 O 300- x 12 } D 10 U cn O 200 8 v Q � 6 0 � v a> L � 100 O 4 (1 O 2 U 0 0 1/2003 112004 1/2005 112006 1/2007 1/2008 1/2009 112010 Date Exhibit 1C: Well 34-32 �+aunlarr Well Buttoin P observed(History) _-�. serve s:wma cm+aaira zmaRtrv7 —serm s�mwnmcaww.uuzoia:uu) 2000 j ■I { 6 Q 1000 N j i n LL _ � 1 ■ t � 0 t 1/1960 1/1965 1/1970 111975 1/1980 1/1985 1/1990 111995 112000 1/2005 112010 Date —Simulated $BHP- Eclipse —Well Gas Production Rate — Observed SBHP till 2007 400 16 14 r� O 300 12 x r a 0 10 0 U-) 0 200 N iY 6 O cn V N � 100 4 O (1 rn O 2 O 0 0 1/2003 1/2004 1/2005 1/2006 1/2007 112008 1/2009 1/2010 Date Exhibit 1 D: Well 34-31 so �.. SBHP observed (Hismry -saw s..,�wpm Wrtcu mioau� 2000 O 1/1960 1/1965 1 /1 ! --Simulated SBHP- Eclipse Observed SBHP till 2007 400 300 C) 200 V) a U L rn cn U L a- 100 0 1/2005 1 Date Exhibit 1 E: Well 33-07 16 14 r7 O X 12 a 10 U U� s Q) a 6 p U 4 O n cn O 2 — •H o served isto7) saw simaaea ¢mwuri mtrca m IM —s�vRuamea�zaioRUN zmmuq 2000 I! 1 6 3 Q 1000 rn U) N L i I i SS f 0 111960 1/1965 111970 1/1975 1/1980 111985 1/1990 1/1995 1/2000 1/2005 1120101 Date ---Simulated SBHP- Eclipse —Well Gas Production Rate Observed SBHP till 2007 400- 16 t 14 r) < O 300._ _ _. 12 x O t 10 E U-) a 200 8 N Q 3 � t _ ... 6 o (n - U N � 100 4 O t1 cn O 2 C� 0 0 1/2003 112004 112005 1/2006 1/2007 1/2008 1/2009 1/2010 Date Exhibit 1 F: Well 33-06 M' 0 1/1960 1/1965 1/1970 1/1675 111980 1 /1985 1 /1990 1/1995 1/21000 1/2005 1/201 Date ---Simulated SBHP- Eclipse —Well Gas Production Rate Observed SBHP till 2007 400-1 30( O 200 N Q V) P L 0 Date Exhibit 1G: Well 31-07X 16 14 r7 G O 12 X Q Q 10 U Vn 8 � O Cr 6 O v 70 4 O IZ flo 2 C? /2008 1/2009 1/2010 300 a 200 N Q L In U) p L a- 100 0 Date Exhibit 1 H: Well 23X-06 16 14 r� O X 12 Q 10 U 8 0 Cr p 6 p U 4 0 n cn 0 U 0 D o served (History) ---SBFP SLnlaletl (IDIORW A10RINJ 2000 O Q 1000 L rn rn ^L LL 0 111960 1/1965 ---Simulated SBHP -Eclipse , ^ Observed SBHP till 2007 400 300 O 200 a L rn rn N L d 100 0 Well Gas Production Rate Date Exhibit 11: Well 21-06RD 01 16 14 M O X 12 a 10 C) cn s a) U ry C 6 p U 4 O n U) U 2 U D M • SBHP observed (History) WeH Bottom Hole Pressure (14X-06) �a�so-nu�aczaiorzt•rayFaernN .___.. sav s:ete•aCp+arzw mromwl —oaf sMs»ea t�moauu xirxtrm+S 2000 I i 6 c 1000 G 73L N L a- i f 0- i i ( Y 111960 1/1960 1/1965 1/1970 1/1975 111980 1/1985 111990 1/1995 112000 1/2005 1/2010 Date Simulated SBHP - Eclipse —Well Gas Production Rate Observed SBHP till 2007 400- I 16 14 1 i O 300 x _,. 12 } Q CD LL U O 200 8 N Q O 4 Ch 6 O U) — m U N L Q 100- 00 O 4 i D_ O 2 0 0 1/2003 1/2004 1/2005 112006 1/2007 1/2008 112009 1/2010 Date Exhibit 1J: Well 14X-06 MAUTdol Well B. SBHP observed (F —san snrwmea�m+ar<w rowt+tug _4 _.... 5&P Sinieletl (3Yi6fiw Xi110r WJ -sew SmWded (G�i(�$.I mtoRU� 2000— C) Q 1000 s` V) N 0 i 1 !1960 1 /1965 1!1970 1 /1975 1 /1980 1 /1985 1!1990 1!1995 112000 112005 1!2010 Date ---Simulated SBHP- Eclipse —Well Gas Production Rate Observed SBHP till 2007 400 16 14 r7 O 300 x 12 a 0 10 v 0 200 8 a� Cn a U a 100 O 4 IL t7 2 C? 0 0 1/2003 112004 112005 112006 112007 112008 1/2009 112010 Date Exhibit 1 K: Well 14-32 AURATHON Date Exhibit 1 L: Well 13-06 1 I E 0 {Ij t ■ 1 111960 1/1965 111970 111975 111980 1/1985 1/1990 111995 112000 1/2005 112010 Date ---Simulated SBHP - Eclipse —Well Gas Production Rate ,^ Observed SBHP till 2007 400 f f 16 f j t 14 r7 I f O 300 12 x 3 ( 1 i ? # Cr) 0 200 _ - - . 8N Q a I � � 6 O cn U N L 0 100 _ O 4 r2 U) 2 0 E 0 Date Exhibit 1 L: Well 13-06 Pool 6 Shut -In Surface Pressures Date 5/13/2009 Wells had been S/I approx. 48 hrs. BHP at Datum Test Gauge MidPerf MidPerf MidPerf Zones (TVD) 4565' SS or Calc Well Psig SITP psia SSTVD TVD MD Perfd BHP psia MidPerf BHP at Datum COMMENTS 14-32 Test Gauge 219.70 MidPerf MidPerf MidPerf Zones (TVD) 4565' SS or 241.32 Well Psig SITP psia SSTVD TVD MD Perfd BHP psia -4652 TVD COMMENTS 14-32 171.0 185.70 4520 1 4607 5316 1 C-1 203.7 203.89 BHP calculated based upon surfjees 21-6RD 175.0 189.70 4482 4562 5280 C-1 207.9 208.28 BHP calculated based upon surf 34-32L 172.0 186.70 4485 4580 5239 C-1 204.7 204.98 SHP calculated based upon surf DU-5L 4476 4570 4490 4578 5162 C-1 BHP calculated based upon surface pressures 14-X6 13-6L 173.0 187.70 4476 4570 5223 C-1 205.7 206.1 BHP calculated based upon surf14-X6 based upon surface pressures 23x-6 182.0 196.70 4403 4498 4498 C -1,C-2 215.3 216.0 BHP calculated based u on surf23x-6 BHP calculated based upon surface pressures 182.0 196.70 4393 4486 4868 C-1 215.2 216.0 BHP calculated based upon surf31-7X 244.7 178.9 193.60 4359 4446 5350 C -1,C-2 211.7 212.6 BHP calculated based u on surf33-7S C-1 4442 4532 5050 C-1 222.20 22-6x 178.0 192.70 244.1 4537 based upon surface pressures 211.0 211.6 BHP calculated based u on surfre 43-6RD 207.0 43-6RD 175.0 189.70 1 4416 1 4503 5362 C-1 207.7 208.3 BHP calculated hated unnn carfare nr -iroc Pool 6 Shut -In Surface Pressures Wells had been S/I approx. 48 hrs. Date 11/23/2009 N/M Exhibit 1 M: Static Reservoir Pressures gathered in 2009 MINAUTH01 MidPerf BHP at Datum Test Gauge MidPerf MidPerf MidPerf Zones (TVD) 4565' SS or Well Psig SITP psia SSTVD TVD MD Perfd BHP psia -4652 TVD I COMMENTS 14-32 205.0 219.70 4520 4607 5316 C-1 241.1 241.32 BHP calculated based upon surface pressures 21-6RD 204.0 218.70 4482 4562 5280 C-1 239.7 240.22 BHP calculated based upon surface pressures 34-32L 207.0 221.70 4485 4580 5239 C-1 243.2 243.52 BHP calculated based upon surface pressures DU -51L 205.5 220.20 4490 4578 5162 C-1 241.5 241.9 BHP calculated based upon surface pressures 13-6L 204.0 218.70 4476 4570 5223 C-1 239.8 240.2 BHP calculated based upon surface pressures 14-X6 208.0 222.70 4403 4498 4498 1 C -1,C-2 243.9 244.6 BHP calculated based upon surface pressures 23x-6 205.0 219.70 4393 4486 4868 1 C-1 240.5 241.3 BHP calculated based upon surface pressures 31-7X 208.0 222.70 4359 4446 5350 C -1,C-2 243.6 244.7 BHP calculated based upon surface pressures 33-7S 4442 4532 5050 C-1 22-6x 207.5 222.20 243.5 244.1 SHP calculated based upon surface pressures 43-6RD 207.0 221.70 4416 4503 5362 C-1 1 242.8 243.5 BHP calculated based upon surface Dressures N/M Exhibit 1 M: Static Reservoir Pressures gathered in 2009 MINAUTH01 Pressure distribution as per Eclipse Model on 23 -Nov -2009 Exhibit 1 N: Reservoir pressure distribution predicted by Eclipse simulation model 23x-6 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 y=57.926x-719fi - ♦ R2 = 0.9478 M 0 0 40,000 35,000 30,000 25,000 20,000 d 15,000 10,000 5,000 100 200 300 400 500 Tubing Pressure (psig) 31-7x 600 700 0 0 100 - 200 300 400 500 600 700 Tubing Pressure (psig) Exhibit # 2: Performance of injection wells during 2009 Jan -09 Feb -09 Mar -09 Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep -09 Oct -09 Nov -09 Dec -09 Total: Total Total Allocation Ratio *Native *Stored Gas Gas Native Stored Gas Gas Iniected Withdrawn Gas Gas Withdrawn Withdrawn 529,145 168,141 70% 30% 117,699 50,442 610,275 57,840 70% 30% 40,488 17,352 889,015 85,728 70% 30% 60,010 25,718 1,418,148 19,208 70% 30% 13,446 5,762 1,326,519 - 60% 40% - - 1,278,925 - 60% 40% - - 1,268,657 - 60% 40% - - 1,143,616 - 60% 40% - - 925,063 61,756 60% 40% 37,054 24,702 718,191 5,655 60% 40% 3,393 2,262 132,383 412,366 60% 40% 247,420 164,946 232,435 346,858 1 60% 40% 208,115 138, 743 IU74124Iz 1,15/,bb2 727,623 Exhibit 3: Monthly injection and withdrawal volumes 429,929 300 250 200 d150 100 50 P/Z for Pool - 6 ♦ 2006 G 2007 ■ 2008 ■ 2009 Linear (Eclipse P/Z) Official P/Z .. Eclipse Model P/Z D 5.100E+08 5.200E+08 5.300E+08 5.400E+08 5.500E+08 5.600E+08 Cum withdrawl (MSCF) Exhibit # 4: P/Z Plot -FPR vs. DRiE (2QFIXikB3f -FGff: vs. DATE (2D1 DRtk.D -FGPR vs. DATE MI W UN) 220- 20210200190180 210- Monthly averaged field pressures 200- 190- 180-1 Q I 170- 70160150140 160- 150- 140 DATE Black — Monthly averaged gas injection rates Red — Monthly averaged gas production rates Blue — Monthly averaged field pressures Exhibit # 5: Monthly averaged rates and pressure 50000 40000 30000 Q L� U 20000 7 n C� Lam. 10000 0 L1 0