Phase III - Department of Mines and Petroleum
Phase III - Department of Mines and Petroleum
Phase III - Department of Mines and Petroleum
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Executive Summary<br />
Overview<br />
The Greater Gorgon Area gas fields lie <strong>of</strong>f the northwest coast <strong>of</strong> Australia in an area known geologically<br />
as Carnarvon Basin. These gas fields represent a world class gas resource containing approximately 25%<br />
<strong>of</strong> all the natural gas discovered to date in Australia. It is proposed that the exploitation <strong>of</strong> these fields<br />
commence with the development <strong>of</strong> the Gorgon <strong>and</strong> Jansz fields with the natural gas piped to a liquefied<br />
natural gas (LNG) processing facility to be constructed on Barrow Isl<strong>and</strong> some 60 km <strong>of</strong>f the northwest<br />
coast <strong>of</strong> Western Australia (Figure 1).<br />
The natural gas in the Gorgon field contains approximately 14% carbon dioxide (CO 2 ) while the natural gas<br />
in the Jansz field contains less than 1% carbon dioxide. This CO 2 will be produced with the hydrocarbon<br />
gases as the fields are developed. Along with minor concentrations <strong>of</strong> other substances, the CO 2 will be<br />
separated from the hydrocarbon gases at the proposed LNG processing facility to be built on Barrow Isl<strong>and</strong>.<br />
Established global practice is for this reservoir CO 2 to be vented to the atmosphere; however the Gorgon<br />
Joint Venturers plan to dispose <strong>of</strong> this reservoir carbon dioxide by injecting it underground into the Dupuy<br />
Formation beneath Barrow Isl<strong>and</strong>.<br />
Figure 1<br />
Location map for Gorgon gas field <strong>and</strong> CO 2 disposal project.<br />
Chevron, as Operator <strong>of</strong> the Gorgon Joint Venture (GJV), propose to utilize the Dupuy Formation beneath<br />
Barrow Isl<strong>and</strong> as the host reservoir for the permanent (i.e., >1,000 years) disposal <strong>of</strong> the 1.4 – 2.6 trillion<br />
cubic feet (TCF) <strong>of</strong> CO 2 which is expected to be produced in conjunction with hydrocarbon gases from the<br />
Gorgon <strong>and</strong> Jansz-Io gas fields. The objective <strong>of</strong> permanently disposing <strong>of</strong> the CO 2 in this deep<br />
underground reservoir is to prevent it entering the atmosphere, where it would act as a greenhouse gas <strong>and</strong><br />
potentially contribute to global climate change. The Gorgon CO 2 disposal project will be potentially the<br />
largest such project in the world, <strong>and</strong> has attracted international attention.<br />
xiv
Highlights<br />
As a means <strong>of</strong> fully underst<strong>and</strong>ing the CO 2 disposal process <strong>and</strong> the associated risks, the Western<br />
Australian <strong>Department</strong> <strong>of</strong> Industry <strong>and</strong> Resources (DoIR) <strong>and</strong> the GJV agreed to regularly review the<br />
technical work for “due diligence” purposes. Consequently, DoIR is undertaking an ongoing technical<br />
appraisal <strong>of</strong> the Gorgon CO 2 disposal project. When completed, the appraisal will provide technical<br />
guidance to assist the Barrow Isl<strong>and</strong> Act 2003 Minister in his/her assessment <strong>of</strong> the GJV’s application,<br />
under section 13 <strong>of</strong> the Act, to inject <strong>and</strong> monitor the injected CO 2 in the Dupuy reservoir beneath Barrow<br />
Isl<strong>and</strong>.<br />
<strong>Phase</strong>s I <strong>and</strong> II <strong>of</strong> the technical appraisal were completed by Curtin University in 2003 <strong>and</strong> 2004,<br />
respectively. Innovative Carbon Technologies Pty Ltd, subsequently renamed CO2CRC Technologies Pty<br />
Ltd (CO2TECH) was commissioned by DoIR to undertake the <strong>Phase</strong> <strong>III</strong> technical appraisal. CO2TECH<br />
assembled an international Due Diligence Team to carry out this appraisal, consisting <strong>of</strong> experts with<br />
significant experience in various aspects <strong>of</strong> CO 2 disposal.<br />
The objectives for this <strong>Phase</strong> <strong>III</strong> technical assessment are to review, assess <strong>and</strong> verify the effectiveness <strong>of</strong><br />
the following GJV plans:<br />
• the Data Well programme to evaluate the injectivity <strong>and</strong> safety requirements <strong>of</strong> an effective<br />
injection programme in the Dupuy Formation beneath Barrow Isl<strong>and</strong>;<br />
• the monitoring programme for detection <strong>of</strong> migration <strong>of</strong> the CO 2 plume away from the injection<br />
site over the life <strong>of</strong> the project;<br />
• the well remediation programme to ensure that existing wells that intersect the Dupuy Formation<br />
near the proposed injection site have been properly secured <strong>and</strong> do not pose a CO 2 containment<br />
risk;<br />
• the management plan for the remediation <strong>of</strong> CO 2 seepage, should it occur, through the geological<br />
column to within 1 km <strong>of</strong> the surface.<br />
As a basis for the <strong>Phase</strong> <strong>III</strong> technical assessment , the GJV provided CO2TECH <strong>and</strong> the Due Diligence<br />
Team with reports that were available on parts <strong>of</strong> their technical work undertaken in <strong>Phase</strong>s I to <strong>III</strong> <strong>of</strong> the<br />
GJV technical review. Interaction between the Due Diligence Team <strong>and</strong> Chevron staff was facilitated<br />
through a series <strong>of</strong> four engagement sessions, held on 29-30 June, 30 August, 4-6 December, 2006 <strong>and</strong> 28<br />
February to 2 March 2007. Copies <strong>of</strong> the presentations made by Chevron staff at the engagement sessions<br />
were provided to the Due Diligence Team.<br />
The <strong>Phase</strong> I study concluded that the risks <strong>of</strong> CO 2 geosequestration into the Dupuy Formation <strong>of</strong> Barrow<br />
Isl<strong>and</strong> could be managed. <strong>Phase</strong> II concluded that the target reservoir has the capacity to store the CO 2<br />
anticipated from Gorgon Project, <strong>and</strong> that the primary seal seems to be adequate for long term disposal.<br />
This <strong>Phase</strong> <strong>III</strong> technical assessment, which ran from June 2006 to February 2008, produced four interim<br />
reports to DoIR. These interim reports were commented on shortly after submission, by both DoIR <strong>and</strong> the<br />
GJV, with the result that some <strong>of</strong> the observations <strong>and</strong> recommendations made by the Due Diligence Team<br />
have already been incorporated into future work plans <strong>of</strong> the GJV. Feedback on the interim reports<br />
provided by DoIR <strong>and</strong> GJV also improved the Due Diligence Team’s underst<strong>and</strong>ing <strong>of</strong> the project, <strong>and</strong><br />
resulted in modifications to both the Final Report <strong>and</strong> certain earlier recommendations. Thus, in our view,<br />
the iterative Due Diligence process initiated by DoIR has been highly constructive <strong>and</strong> has led to a<br />
convergence <strong>of</strong> views over the way forward for the Gorgon CO 2 disposal project.<br />
The Due Diligence Team is particularly impressed with the scope <strong>and</strong> quality <strong>of</strong> work, <strong>and</strong> the amount <strong>of</strong><br />
resources committed to the Gorgon CO 2 disposal project. It appears that the preparatory work that has<br />
gone into this project significantly exceeds other comparable projects to date. Furthermore the GJV have<br />
demonstrated that many <strong>of</strong> the major requirements for CO 2 disposal are satisfied. The associated risks are<br />
considered manageable through technically comprehensive plans for monitoring the migrating CO 2 plume<br />
<strong>and</strong> the remediation <strong>of</strong> existing wells near the injection site. The GJV Uncertainty Management Plan is<br />
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considered to be a thorough <strong>and</strong> sound methodology, providing an excellent basis for reducing <strong>and</strong><br />
managing subsurface uncertainties.<br />
The Due Diligence Team concur with the GJV that additional studies are necessary as part <strong>of</strong> the Chevron<br />
Project Development <strong>and</strong> Execution Process (CPDEP) <strong>Phase</strong> IV <strong>and</strong> the Due Diligence Team have<br />
identified a series <strong>of</strong> recommendations that we consider must be addressed. This report is based on a<br />
specific scope <strong>of</strong> services, as detailed in DoIR Request Document (Request No. 206DIR0306), <strong>and</strong> should<br />
not be considered a complete technical appraisal <strong>of</strong> the feasibility for the underground disposal <strong>of</strong> CO 2<br />
from the proposed gas processing facilities on Barrow Isl<strong>and</strong>. It is anticipated that the <strong>Phase</strong> IV technical<br />
assessment will provide a complete appraisal <strong>of</strong> the technical feasibility <strong>of</strong> the injection project. In<br />
conclusion, at this point in time there appear to be no significant issues which may compromise the<br />
feasibility <strong>of</strong> the project, <strong>and</strong> based on the available data the Due Diligence Team believes that the overall<br />
technical assessment <strong>of</strong> the project by the GJV is sound.<br />
GJV’s Approach to the Identification <strong>and</strong> Management <strong>of</strong> Technical<br />
Uncertainties within the Project<br />
The GJV have developed an Uncertainty Management Plan that identifies all known subsurface<br />
uncertainties (including all risks), <strong>and</strong> evaluates the potential impact <strong>of</strong> each uncertainty on the project<br />
metrics (which are capacity, containment, injectivity, risk to assets, reservoir surveillance, cost, l<strong>and</strong> use<br />
<strong>and</strong> HSE). It also generates options for reducing <strong>and</strong> managing each uncertainty, develops surveillance<br />
plans to identify if an unforecast event has occurred <strong>and</strong> describes how to manage unpredicted outcomes.<br />
The Due Diligence Team believes this is a thorough <strong>and</strong> sound methodology <strong>and</strong>, providing all the<br />
technical uncertainties within the project are identified, the Uncertainty Management Plan is an excellent<br />
basis for reducing <strong>and</strong> managing subsurface uncertainty <strong>and</strong> risk.<br />
The GJV have undertaken a work programme to characterise the proposed disposal site <strong>and</strong> its surrounding<br />
area. This work programme includes building geological <strong>and</strong> numerical models <strong>of</strong> the disposal site,<br />
simulating the injection <strong>of</strong> CO 2 into the proposed reservoir, assessing the subsurface risks <strong>and</strong> designing<br />
monitoring <strong>and</strong> remediation programmes to detect <strong>and</strong> manage un-forecast outcomes. The work<br />
programme is ongoing, continually strengthening the technical evaluation <strong>and</strong> feeding new information<br />
back into the Uncertainty Management Plan. The quality <strong>and</strong> scope <strong>of</strong> the work programme is impressive<br />
<strong>and</strong> it is expected that a thorough <strong>and</strong> comprehensive evaluation <strong>of</strong> the CO 2 disposal project will be<br />
completed as part <strong>of</strong> the Chevron Project Development <strong>and</strong> Execution Process (CPDEP) before injection<br />
commences.<br />
There are five major risks to successful injection <strong>of</strong> CO 2 beneath Barrow Isl<strong>and</strong>:<br />
1. insufficient capacity for CO 2 ;<br />
2. inadequate containment <strong>of</strong> the CO 2 in the reservoir;<br />
3. insufficient rates <strong>of</strong> injection <strong>of</strong> CO 2 into the reservoir;<br />
4. contamination <strong>of</strong> other hydrocarbon resources by migration <strong>of</strong> CO 2 away from the disposal<br />
site;<br />
5. commercial viability <strong>of</strong> the project.<br />
The present review focuses on the first four risks. This report initially describes the target reservoir <strong>and</strong><br />
places it in the regional context through a hydrodynamic assessment. It then deals with capacity for CO 2<br />
disposal through the assessment <strong>of</strong> data collected for the Dupuy Formation reservoir from seismic <strong>and</strong> well<br />
data. The report reviews the use <strong>of</strong> these data to build the geological, geomechanical <strong>and</strong> geochemical<br />
reservoir models together with the simulation <strong>of</strong> CO 2 movement in the 1,000 years following injection. It<br />
reviews CO 2 injectivity based on well tests <strong>and</strong> simulation, <strong>and</strong> then addresses the risk <strong>of</strong> CO 2<br />
contamination <strong>of</strong> hydrocarbon assets <strong>and</strong> the potential for environmental impacts <strong>of</strong> CO 2 migration to the<br />
ground surface. Finally the report evaluates the monitoring <strong>and</strong> verification plans for the planned CO 2<br />
disposal project.<br />
xvi
Only those parts <strong>of</strong> the GJV work programme that were included in the <strong>Phase</strong> <strong>III</strong> due diligence scope <strong>of</strong><br />
services are reviewed in this report. A summary <strong>of</strong> each <strong>of</strong> these topics, presented below, is followed by<br />
our recommendations for the GJV (CPDEP) <strong>Phase</strong> IV technical work programme.<br />
Regional Setting<br />
The assessment <strong>of</strong> geological CO 2 disposal is commonly carried out at three scales referred to as regional,<br />
local <strong>and</strong> reservoir scales. A regional assessment commonly considers the general geological<br />
characteristics <strong>and</strong> hydrodynamics <strong>of</strong> a basin or sub-basin. A local assessment considers a 3-dimensional<br />
body <strong>of</strong> rock (<strong>and</strong> its contained fluids) encompassing the target disposal reservoir <strong>and</strong> surrounding domains<br />
which might have a bearing on the overall disposal integrity <strong>and</strong> containment <strong>and</strong>/or may be affected by the<br />
disposal <strong>of</strong> CO 2 . It commonly extends above the reservoir to the surface <strong>and</strong> below it to basement. A<br />
reservoir-scale assessment considers the portion <strong>of</strong> the sedimentary succession that defines the capacity <strong>of</strong><br />
the reservoir, <strong>and</strong> associated barriers to CO 2 migration, <strong>and</strong> is the unit which petroleum companies focus on<br />
in conventional oil <strong>and</strong> gas exploration to identify potential petroleum traps.<br />
In the <strong>Phase</strong> <strong>III</strong> assessment by the GJV, the main focus <strong>of</strong> the assessment was on the reservoir scale. It is<br />
expected that in the <strong>Phase</strong> IV assessment, more emphasis will be placed on the local <strong>and</strong> regional scales.<br />
Regional to Local Geology <strong>and</strong> Hydrodynamic Regimes<br />
The Barrow Sub-basin (Figure 2) is a northeast-southwest trending trough (graben) within the Northern<br />
Carnarvon Basin located on the North West Shelf <strong>of</strong>fshore Western Australia. The northeast-trending<br />
Rankin Platform <strong>and</strong> Alpha Arch form the north-western margin <strong>of</strong> the Barrow Sub-basin <strong>and</strong> its southeastern<br />
limit is defined by the northeast-trending Peedamullah Shelf. To the northeast <strong>and</strong> southwest, the<br />
sub-basin abuts the Dampier (separated by a Jurassic high) <strong>and</strong> Exmouth (separated by the Alpha Arch <strong>and</strong><br />
Yanrey Ridge) sub-basins. The transition from the shelf into the central trough is marked by the north-east<br />
trending en-echelon Flinders Fault System. Barrow Isl<strong>and</strong> is located on the north-northeast trending<br />
Barrow Isl<strong>and</strong> anticline (Figure 2 <strong>and</strong> 3).<br />
The stratigraphy <strong>of</strong> Barrow Isl<strong>and</strong> is shown in Figure 4. The Jurassic Dupuy Formation is the CO 2<br />
injection target. Beneath Barrow Isl<strong>and</strong>, the Dupuy Formation is folded into an open anticline (Figure 3).<br />
It conformably overlies the thick marine Dingo Claystone. Directly above the Dupuy Formation lies the<br />
Barrow Group, a Cretaceous deltaic complex dominated by s<strong>and</strong>stone <strong>and</strong> mudstone. The Lower Barrow<br />
Group, the Basal Barrow Group Shale <strong>and</strong> overlying Malouet Formation (mixed s<strong>and</strong>stone/shale sets) lie<br />
unconformably on the Dupuy, <strong>and</strong> are unconformably overlain by the Flacourt Formation (s<strong>and</strong>stonedominated<br />
s<strong>and</strong>stone/shale sets) which grades laterally into the Flag S<strong>and</strong>stone. The thick Muderong Shale<br />
forms a regional seal <strong>and</strong> unconformably caps the Barrow Group. At the base <strong>of</strong> the Muderong Shale is the<br />
Mardie Greens<strong>and</strong> Member (an extensive marine transgressive unit <strong>of</strong> glauconitic, s<strong>and</strong>y siltstone,<br />
interbedded with siltstone <strong>and</strong> shale). The Windalia S<strong>and</strong> Member, in the upper part <strong>of</strong> the Muderong<br />
Shale, is a locally developed s<strong>and</strong>y facies which is capped by the Windalia Radiolarite <strong>and</strong> Gearle<br />
Siltstone.<br />
It is planned that CO 2 will be injected into the Lower Dupuy <strong>and</strong> lower part <strong>of</strong> the Upper Massive S<strong>and</strong><br />
(below the Perforans Siltstone; Figure 5). During injection, the laterally discontinuous siltstones in the<br />
Upper Massive S<strong>and</strong> (both above <strong>and</strong> below the Perforans Siltstone) <strong>and</strong> the Perforans Siltstone are<br />
expected to impede the vertical migration <strong>of</strong> the injected CO 2 . If vertically migrating CO 2 reaches the top<br />
<strong>of</strong> the Upper Massive S<strong>and</strong>, the upwards migration <strong>of</strong> the CO 2 will be further slowed by fine-grained beds<br />
in the Upper Dupuy. Migrating CO 2 will then encounter the Basal Barrow Group Shale, which is expected<br />
to form an effective barrier to CO 2 movement from the Dupuy reservoir into the Lower Barrow Group.<br />
xvii
Figure 2<br />
Geological structure <strong>of</strong> the Barrow Sub-basin <strong>of</strong> the Carnarvon Basin.<br />
There is some debate over the competence <strong>of</strong> the primary seal (the Basal Barrow Group Shale) to prevent<br />
the upwards transport <strong>of</strong> water over long timescales, based on mixing phenomena <strong>and</strong> salinity gradients<br />
observed close to the boundary between the Lower Barrow Group <strong>and</strong> the Upper Dupuy. However, the<br />
transport <strong>of</strong> water (a single wetting phase fluid) through this barrier in response to a pressure difference<br />
between the Dupuy Formation <strong>and</strong> the Barrow Group does not mean that CO 2 could also be transported<br />
through it. Indeed the mercury injection capillary pressure (MICP) results (Figure 6) indicate that this is<br />
extremely unlikely to happen unless the Basal Barrow Group Shale is breached by conductive faults or<br />
fractures along the plume migration path. Moreover, even if CO 2 could breach the Basal Barrow Group<br />
Shale, further leakage through the Lower Barrow Group must contend with 160 m <strong>of</strong> discontinuous shale<br />
packages. It must then pass through 700 m <strong>of</strong> Barrow Group reservoir s<strong>and</strong>s which are, in turn, overlain by<br />
the 250 to 1000 m thick Muderong shale, which has a regional sealing capacity sufficient to trap 400 – 700<br />
m columns <strong>of</strong> natural gas in places on the North-West Shelf. Any CO 2 that breached the Muderong Shale<br />
would then encounter the Windalia Radiolarite <strong>and</strong> Gearle Siltstone (several hundred metres thick), which<br />
are the sealing units for the currently producing billion-barrel oil accumulation within the Windalia S<strong>and</strong><br />
Member on Barrow Isl<strong>and</strong>.<br />
xviii
Figure 3<br />
Geological cross-section through Barrow Isl<strong>and</strong> <strong>and</strong> the surrounding area (see Figure 2 for location).<br />
Figure 4<br />
Schematic presentation <strong>of</strong> stratigraphy beneath Barrow Isl<strong>and</strong>.<br />
It seems that the existence <strong>of</strong> these three thick sealing packages above the Basal Barrow Group Shale will<br />
provide adequate sealing capability over geologic time for containing the CO 2 , providing it does not leak<br />
through existing faults, existing or induced fractures or well bores. Over geological time, there is indirect<br />
evidence <strong>of</strong> episodic fluid transport along at least one major fault on Barrow Isl<strong>and</strong> (the Main Barrow<br />
Fault). Contact <strong>of</strong> CO 2 with such sub-vertical planar major faults should, if possible, be avoided to reduce<br />
the risk <strong>of</strong> migration from the reservoir towards the surface. Therefore, the GJV has sensibly chosen to site<br />
xix
the CO 2 injectors in locations that would minimize both the potential for contact <strong>of</strong> the injected CO 2 with<br />
the larger faults <strong>and</strong> limit any pressure increase at the faults.<br />
The Due Diligence Team concur on the importance <strong>of</strong> the stated GJV plan, to integrate their local<br />
underst<strong>and</strong>ing <strong>of</strong> the hydrodynamics in the Barrow Isl<strong>and</strong> area with their Barrow Sub-basin scale<br />
hydrodynamic underst<strong>and</strong>ing in future work.<br />
Figure 5 Diagrammatic north-south cross section showing the key stratigraphic units within, <strong>and</strong> adjacent to, the<br />
proposed CO 2 reservoir beneath Barrow Isl<strong>and</strong>.<br />
Figure 6 CO 2 column heights predicted from mercury injection capillary pressure (MICP) data for a range <strong>of</strong> contact<br />
angles (document G1-TE-Z-0000-REPX039.pdf).<br />
xx
Dupuy Reservoir Capacity<br />
The accurate estimation <strong>of</strong> the capacity <strong>of</strong> the Dupuy Formation on Barrow Isl<strong>and</strong> for CO 2 disposal<br />
depends on the synthesis <strong>of</strong> flow simulations using robust geological, geomechanical <strong>and</strong> geochemical<br />
models. These flow simulations can be used to evaluate how the injected CO 2 fills the Dupuy Formation<br />
reservoir <strong>and</strong> affects the reservoir <strong>and</strong> seal properties, but these models must be calibrated with high quality<br />
data. Petrographic <strong>and</strong> petrophysical measurements have been used to determine permeability <strong>and</strong> porosity<br />
in the Dupuy Formation reservoir, <strong>and</strong> the adjacent seals <strong>and</strong> baffles. Sedimentological facies models<br />
guided by well control have been used to predict the distribution <strong>of</strong> lithologic properties throughout the<br />
reservoir. In addition, the analysis <strong>of</strong> reservoir rock units is complemented by analysis <strong>of</strong> the faults <strong>and</strong><br />
fractures in the reservoir, which may locally promote or retard the migration <strong>of</strong> CO 2 .<br />
Petrography <strong>and</strong> Petrophysics<br />
The Data Well, Gorgon CO 2 Data Well-l with side-track ST1, was drilled through the Dupuy Formation on<br />
Barrow Isl<strong>and</strong> by the GJV to collect data to reduce uncertainties over a range <strong>of</strong> CO 2 injectivity <strong>and</strong><br />
containment issues. An extensive work programme has been undertaken by the GJV on the samples <strong>and</strong><br />
measurements derived from the Data Well, resulting in an impressive amount <strong>of</strong> data for incorporation into<br />
the geological model. Overall, the data are <strong>of</strong> excellent quality, confirming the presence <strong>of</strong> reservoir<br />
s<strong>and</strong>stones in the Lower Dupuy <strong>and</strong> Upper Massive S<strong>and</strong>, an overlying argillaceous Upper Dupuy, which is<br />
likely to act as a baffle, <strong>and</strong> an apparently continuous sealing lithology overlying the Dupuy across the<br />
Barrow Isl<strong>and</strong> area (the Basal Barrow Group Shale).<br />
Petrographic studies (thin section, X-ray diffraction <strong>and</strong> scanning electron microscopy) on selected samples<br />
from the Data Well have been undertaken by the GJV in order to assess the texture <strong>and</strong> mineral content <strong>of</strong><br />
the sedimentary rocks that make up the main reservoir interval (the Lower Dupuy <strong>and</strong> Upper Massive<br />
S<strong>and</strong>), intraformational baffles (e.g., Perforans Siltstone <strong>and</strong> Upper Dupuy) <strong>and</strong> top seal (Basal Barrow<br />
Group Shale). A good description <strong>of</strong> these sedimentary strata is provided for over 30 samples through the<br />
Barrow Group <strong>and</strong> underlying Dupuy Formation. Overall, these samples provide an adequate assessment<br />
<strong>of</strong> the petrographic nature through the injection target (Lower Dupuy <strong>and</strong> Upper Massive S<strong>and</strong>). It is,<br />
however, suggested that a few additional samples are required to better assess the petrographic nature <strong>of</strong> the<br />
Upper Dupuy <strong>and</strong> Barrow Group (particularly the section identified as the Basal Barrow Group Shale).<br />
The existing petrographic work has been undertaken in isolation from other sedimentological,<br />
mineralogical <strong>and</strong> petrophysical studies <strong>and</strong> it is recommended that a rigorous examination <strong>of</strong> sample<br />
points with respect to core position should be undertaken (e.g., petrographic character relative to facies,<br />
bedding, presence/absence <strong>of</strong> fractures). This should help to better characterise the various units <strong>and</strong>/or<br />
will allow subdivision <strong>of</strong> petrographic samples by facies. An integration <strong>of</strong> petrographic <strong>and</strong> petrophysical<br />
work could also be undertaken to better underst<strong>and</strong> controls on reservoir quality <strong>and</strong> to aid the development<br />
<strong>of</strong> porosity-permeability transforms.<br />
A thorough petrophysical evaluation has been undertaken by the GJV for the Dupuy Formation in the Data<br />
Well. It is constrained by good quality logs <strong>and</strong> excellent coverage <strong>of</strong> high-quality core analysis data.<br />
Overall, the methodology <strong>and</strong> interpretations are robust, with a good match between the now extensive core<br />
analysis data set <strong>and</strong> the derived petrophysical logs.<br />
Petrophysical logs have been used by the GJV to generate a petr<strong>of</strong>acies scheme for use in the Dupuy<br />
geological model. Prior to drilling the Data Well this petr<strong>of</strong>acies scheme was used in preference to a<br />
depositional facies scheme due to the limited data set in the Dupuy Formation, including limited core<br />
coverage. The Due Diligence Team agrees that the data set at Barrow Isl<strong>and</strong> before drilling <strong>of</strong> the CO 2<br />
Data Well does not support a depositional facies approach, <strong>and</strong> that this would have overstated technical<br />
knowledge <strong>of</strong> the reservoir. However, it is suggested that in the light <strong>of</strong> the excellent core, core analysis<br />
data <strong>and</strong> petrophysical log data from the Data Well, improvements could be made to the existing<br />
petr<strong>of</strong>acies scheme. It is considered here that the division <strong>of</strong> the existing petr<strong>of</strong>acies scheme into only two<br />
groups, “Silt” <strong>and</strong> “S<strong>and</strong>” is inadequate to capture the range <strong>of</strong> facies <strong>and</strong> their petrophysical properties.<br />
xxi
Another key outcome from the petrophysical work on the Data Well was improved computation <strong>of</strong><br />
permeability. A flow zone indicator (FZI) flow unit approach was used by the GJV, which has<br />
significantly improved the core-based porosity-permeability transforms compared to earlier (pre-Data<br />
Well) transforms. The significant advances in underst<strong>and</strong>ing porosity-permeability relations could be<br />
further improved by additional integration <strong>of</strong> petrophysical, core analysis, XRD <strong>and</strong> petrographic data.<br />
Seal/baffle quality has been qualitatively assessed using petrographic examinations. However, a better<br />
underst<strong>and</strong>ing <strong>of</strong> the full range <strong>of</strong> textures <strong>and</strong> mineralogies within the Dupuy <strong>and</strong> Basal Barrow Group<br />
mudstones/siltstones should be gained with the analysis <strong>of</strong> additional samples. MICP results have been<br />
presented by the GJV for a range <strong>of</strong> seal <strong>and</strong> baffle lithologies. A good spread <strong>of</strong> samples has been<br />
analysed through the top seal (Basal Barrow Group Shale), which displays good sealing potential <strong>and</strong> is<br />
generally capable <strong>of</strong> sustaining CO 2 column heights in excess <strong>of</strong> 300 metres (Figure 6). These column<br />
heights are greater than those predicted to result from CO 2 injection. It is understood that further samples<br />
have been submitted by the GJV for MICP analysis; including samples from the Perforans Siltstone.<br />
However, these results are not yet available. It is suggested that more work will be undertaken on the<br />
Upper Dupuy (currently only one sample) <strong>and</strong> that results from all baffles will be incorporated into the<br />
reservoir model.<br />
Faults <strong>and</strong> Fractures<br />
Small (< 30 m throw) normal faults <strong>and</strong> fractures observed on seismic <strong>and</strong> in core data are present in the<br />
Dupuy Formation reservoir <strong>and</strong> the Basal Barrow Group Shale seal within, <strong>and</strong> adjacent to, the predicted<br />
1000 year CO 2 plume (Figure 7). These structures have been studied using a number <strong>of</strong> techniques,<br />
including seismic reflection interpretation, Formation MicroImager (FMI TM ) log interpretation,<br />
geomechanical analysis, curvature analysis <strong>and</strong> fault seal potential analysis using Shale Gouge Ratios <strong>and</strong><br />
juxtaposition.<br />
The 2005 GorBar 3D seismic reflection survey across Barrow Isl<strong>and</strong> has been interpreted to a high st<strong>and</strong>ard<br />
<strong>and</strong> provides a robust fault data set. Five to nine faults with throws as little as 8-10 metres have been<br />
resolved in the region <strong>of</strong> the predicted 1000 year CO 2 plume (Figure 7). In addition to these faults several<br />
seismic lineaments up to 7 km long also cross the predicted 1000 year plume volume. Some <strong>of</strong> these<br />
lineaments are probably faults <strong>and</strong> have the potential to influence CO 2 migration. It is recommended that<br />
they should be fully interpreted <strong>and</strong> included in future reservoir simulation modelling.<br />
Analysis <strong>of</strong> the FMI log <strong>and</strong> core from the Data Well reveal many fractures over a depth range between<br />
~700 <strong>and</strong> 2600 m. These fractures vary in orientation <strong>and</strong> occur in the reservoir <strong>and</strong> the overlying Barrow<br />
Group. Many fractures are observed in the Lower Dupuy, while few have been recorded in the Basal<br />
Barrow Group Shale seal. Inspection <strong>of</strong> the core indicates that the fractures are mainly faults which are<br />
open or filled with mineralisation or clay. Further analysis <strong>of</strong> the core <strong>and</strong> FMI together with measurement<br />
<strong>of</strong> fractures exposed on Barrow Isl<strong>and</strong> could improve our underst<strong>and</strong>ing <strong>of</strong>: 1) fault <strong>and</strong> fracture geometries<br />
<strong>and</strong> locations (both absolute <strong>and</strong> relative to the stratigraphy) <strong>and</strong>, 2) fault permeabilities.<br />
Information from the Data Well indicates that there are many faults <strong>and</strong> fractures in the predicted 1000 year<br />
plume volume which are too small to be resolved by the seismic data set. Integration <strong>of</strong> information from<br />
the Data Well <strong>and</strong> seismic reflection lines will provide an improved underst<strong>and</strong>ing <strong>of</strong> the fault <strong>and</strong> fracture<br />
systems within the reservoir. Fault information from the Data Well should, for example, be combined with<br />
seismically interpreted faults to determine the scaling properties <strong>of</strong> the fault system for inclusion in<br />
simulation models.<br />
Pre-Data Well estimates <strong>of</strong> Shale Gouge Ratios on the Main Barrow, Plato <strong>and</strong> Godwit faults are moderate<br />
(0.3–0.6) <strong>and</strong> indicate that these faults are likely to be sealing to lateral flow <strong>of</strong> CO 2 . Fault permeabilities<br />
in core from the Data Well have not been measured, while the impact <strong>of</strong> faults on vertical migration <strong>of</strong> CO 2<br />
is not known. Further work is required to constrain better the vertical permeability <strong>of</strong> the faults.<br />
xxii
Triller fault<br />
Main Godwit fault<br />
U22J faults<br />
Plato fault<br />
P18J fault<br />
Main Barrow Fault<br />
Figure 7 Map showing the main faults <strong>and</strong> the predicted CO 2 plume through time (extent <strong>of</strong> 1000 year plume indicated<br />
by light blue. document G1-TE-Z-0000-PRSX001).<br />
Sedimentology<br />
Following drilling <strong>of</strong> the Data Well <strong>and</strong> evaluation <strong>of</strong> results, there is now a series <strong>of</strong> good reservoir <strong>and</strong><br />
seal data available for incorporation into the geological model at the proposed injection site on Barrow<br />
Isl<strong>and</strong>. Results from the Data Well have proven to be within the expected range for rock lithology <strong>and</strong><br />
properties, <strong>and</strong> the horizons encountered are very close to prognosis, which is extremely encouraging. The<br />
well tie to seismic is excellent <strong>and</strong> also helps reduce uncertainty regarding the gross sedimentological<br />
framework in the area <strong>of</strong> the Gorgon CO 2 disposal project.<br />
The scope <strong>and</strong> quality <strong>of</strong> work, <strong>and</strong> the amount <strong>of</strong> resources committed to the Gorgon CO 2 disposal project<br />
(as presented by Chevron during the four engagement sessions), are very impressive. It has been<br />
demonstrated that many <strong>of</strong> the major requirements for CO 2 disposal are satisfied; that is, the upper injection<br />
target (Upper Massive S<strong>and</strong>) represents a laterally extensive, moderate reservoir quality s<strong>and</strong>stone with<br />
some internal heterogeneity, good for moderating CO 2 migration; it is overlain by poorer quality s<strong>and</strong>stones<br />
(Upper Dupuy), which will also slow CO 2 plume migration. The top seal (Basal Barrow Group Shale) is a<br />
laterally extensive s<strong>and</strong>y mudstone with proven capability to hold back significantly more CO 2 than will be<br />
injected, assuming that no migration pathways through the Basal Barrow Group Shale are provided by<br />
faults, fractures or wells.<br />
A series <strong>of</strong> sedimentological studies on Data Well cores have been undertaken <strong>and</strong> could be extremely<br />
helpful in reducing uncertainties with regard to characterisation <strong>of</strong> the Dupuy aquifer. The depositional<br />
xxiii
interpretation (Figure 8) as documented in the Data Well sedimentology reports has changed significantly<br />
from earlier interpretations <strong>and</strong> is considered here to be greatly improved. However, there are still some<br />
conflicting interpretations made for various units in the Data Well <strong>and</strong> also for the overall Dupuy<br />
depositional setting used by the GJV. As yet the various sedimentological <strong>and</strong> palynology studies have not<br />
been fully integrated <strong>and</strong> further work is critical in order to improve underst<strong>and</strong>ing <strong>of</strong> the overall<br />
depositional setting <strong>and</strong> sequence stratigraphy (e.g., water depth, s<strong>and</strong>body <strong>and</strong> mudstone geometries).<br />
Figure 8 Dupuy depositional model showing an unstable s<strong>and</strong>y slope setting dominated by gravity driven processes<br />
involving s<strong>and</strong>y turbidites <strong>and</strong> debris flows (after document ICTPL 3rd Engagement – Reservoir Characterisation <strong>and</strong> Static<br />
Modelling – 5 December 2006.pdf).<br />
Sustained injectivity depends on reservoir continuity, <strong>and</strong> therefore detailed well correlation <strong>and</strong> sequence<br />
stratigraphy studies are a desirable requirement before developing a static reservoir model. The basis for<br />
well correlation presented by the GJV appears sound, with all major surfaces defined by interpretation <strong>of</strong><br />
seismic reflection lines (7 horizons) <strong>and</strong> palynology to aid chronostratigraphy where possible. The GJV<br />
have proved lateral continuity <strong>of</strong> the seven seismically defined horizons, with possible limited lateral extent<br />
for the ps3 surface (near top <strong>of</strong> the Lower Dupuy). Whilst the broad correlation framework is proven, we<br />
recommend that in the light <strong>of</strong> the new data, a more detailed (if possible sequence stratigraphic) well<br />
correlation is attempted. This could form part <strong>of</strong> the recommended review <strong>and</strong> integration <strong>of</strong> all the<br />
available petrographic, core analysis, sedimentological <strong>and</strong> paleontological reports, possibly supplemented<br />
by a new report on forams to get a better h<strong>and</strong>le on paleo-water depth. This could improve the GJV<br />
underst<strong>and</strong>ing <strong>of</strong> the depositional setting <strong>and</strong> thus the facies geometry.<br />
Containment<br />
Simulator Comparisons<br />
This part <strong>of</strong> the review addresses whether the use <strong>and</strong> comparison <strong>of</strong> multiple reservoir CO 2 flow<br />
simulation modelling products is desirable to demonstrate high confidence in the model output. The Due<br />
Diligence Team observed that several packages were available which could adequately simulate the flow <strong>of</strong><br />
CO 2 beneath Barrow Isl<strong>and</strong> following injection. Differences in the output <strong>of</strong> these various modelling<br />
packages generally arise due to variations in the fluid properties entered into the models. We are not aware<br />
that CHEARS, the in-house simulation model used by Chevron, has been involved in any published<br />
benchmarking studies <strong>of</strong> CO 2 flow simulation. However, although we concluded that CHEARS addresses<br />
fluid flow <strong>and</strong> should adequately predict the pressure, saturation <strong>and</strong> composition distribution in the Dupuy<br />
Formation, it should be benchmarked against other simulators.<br />
xxiv
Calibration Data for the Static Model<br />
Development <strong>of</strong> a realistic static reservoir model, describing the “earth model”, is critical before moving on<br />
to develop a dynamic model to simulate CO 2 plume migration. Information from the Data Well represents<br />
a critical component <strong>of</strong> the local assessment <strong>of</strong> the Dupuy aquifer in terms <strong>of</strong> quantifying the static<br />
geological model which is a major input for the reservoir simulator. Information collected from the Data<br />
Well has already had significant input into refining the static model <strong>and</strong> will continue to do so, yet despite<br />
the excellent database <strong>and</strong> sound geological framework, there are currently limitations with the existing<br />
geological model.<br />
The sedimentological approach used by the GJV to populate the static model was inherited from the<br />
original (pre-Data Well) two-component facies model (i.e., earth layers were defined as either s<strong>and</strong>stone or<br />
siltstone). The shape, dimensions <strong>and</strong> lateral continuity <strong>of</strong> s<strong>and</strong> <strong>and</strong> silt facies are described by variograms<br />
(i.e., models <strong>of</strong> the spatial variability <strong>of</strong> facies in the reservoir), primarily constructed using well control,<br />
regional geology <strong>and</strong> mapping <strong>of</strong> seismic reflectors.<br />
While the two-component facies model will provide useful general information on the flow <strong>of</strong> CO 2 , it may<br />
not include sufficient stratigraphic detail to capture facies variations that will affect CO 2 plume migration.<br />
However, the main source <strong>of</strong> concern with the existing static model is the application <strong>of</strong> the variograms.<br />
Specifically, the lack <strong>of</strong> clear justification for grouping together the Upper Massive S<strong>and</strong> <strong>and</strong> Upper Dupuy<br />
into one variogram, <strong>and</strong> the assignment <strong>of</strong> significantly different variogram properties to the Lower Dupuy<br />
(compared to the Upper Massive S<strong>and</strong> <strong>and</strong> Upper Dupuy). The review panel acknowledge that GJV are<br />
planning to undertake further sensitivity analysis on variograms <strong>and</strong> endorse this. It is understood, for<br />
example, that the GJV propose to examine the continuity <strong>of</strong> the Perforans Shale <strong>and</strong> its impact on<br />
containment via an alternative version <strong>of</strong> the static model. In addition to the proposed Perforans Shale<br />
sensitivity analysis underst<strong>and</strong>ing <strong>of</strong> the depositional environment <strong>and</strong> sedimentological facies is also<br />
considered necessary in order to input realistic variograms into the property modelling.<br />
Fault transmissibilities are also an important factor in the static model. We are in agreement with the<br />
methodologies used to estimate across-fault transmissibilities; however, these methods should be better<br />
documented. While vertical along-fault permeabilities could prove to be important controls on the<br />
migration <strong>of</strong> CO 2 , no tested methodologies presently exist for incorporating such permeabilities into flow<br />
simulators <strong>and</strong> it is hoped that this deficiency in current simulation methodologies will be rectified with<br />
future advances in simulation technology.<br />
The simulation model development appears to follow accepted petroleum industry practice, utilising local<br />
grid refinements, good vertical resolution, <strong>and</strong> flow-based upscaling. We recommend the GJV include<br />
deterministic fault leakage scenarios through different fault combinations involving vertical flow to the<br />
overlying Barrow Group, modelling different across fault transmissivities, <strong>and</strong> identifying faults as<br />
barriers/baffles to lateral flow <strong>and</strong> enhancements to vertical flow as part <strong>of</strong> their <strong>Phase</strong> IV technical work<br />
programme.<br />
Review <strong>of</strong> Field-scale Simulations<br />
The static model used in the development <strong>of</strong> the dynamic model (reservoir simulation used to predict<br />
migration <strong>of</strong> the CO 2 plume) was revised after the completion <strong>of</strong> the Data Well. Updates to the static<br />
model post data-well are indicated by slight differences in the pre-Data Well <strong>and</strong> post-Data Well plume<br />
location (Figure 9). Comparison shows that with the improvement in reservoir quality in the Lower Dupuy<br />
for the post-Data Well static model, CO 2 migrates more readily in the lower part <strong>of</strong> the model. To continue<br />
to reduce uncertainty in the modelling process, further updates are required as new data becomes available.<br />
At this stage, for example, only the largest seismically resolvable faults have been fully defined in the<br />
reservoir simulation model. However, sub-seismic faults <strong>and</strong> fractures could modify the CO 2 flow<br />
pathways, if the faults are long, if they are located close to an injection well, <strong>and</strong>/or if they pass through key<br />
baffles such as the Perforans Shale.<br />
xxv
The behaviour <strong>of</strong> injected CO 2 in a flow simulation model has been shown to be strongly dependent on the<br />
relative permeability curves for CO 2 <strong>and</strong> water used in the simulation. Monte Carlo analysis by the GJV<br />
demonstrates that relative permeability <strong>of</strong> CO 2 <strong>and</strong> water includes significant uncertainty. Furthermore, the<br />
GJV have not presented information discussing the possible impact <strong>of</strong> relative permeability hysteresis,<br />
which can have an important impact on the rate <strong>of</strong> CO 2 movement particularly after injection ceases.<br />
A comprehensive review <strong>of</strong> the dynamic model is difficult since no written reports are available on this<br />
matter from the GJV. We believe the flow simulation model was constructed following accepted industry<br />
practices, but were unable to fully verify the flow modelling results. The Due Diligence Team would<br />
expect that the model will continue to be further refined once relative permeability data is available from<br />
special core analyses, as part <strong>of</strong> the <strong>Phase</strong> IV technical work programme, <strong>and</strong> would hope that the dynamic<br />
model will be documented in greater detail.<br />
<strong>Phase</strong> II earth model<br />
<strong>Phase</strong> <strong>III</strong> earth model<br />
Figure 9 Reservoir simulation model results showing 10 year plume extent (cross section), pre- <strong>and</strong> post-Data Well<br />
(document G1-TE-Z-0000-PRSX001) where blue layers represent s<strong>and</strong>, red layers represent silt <strong>and</strong> green illustrates CO 2<br />
saturation.<br />
Geomechanical Model<br />
Geomechanical measurements <strong>and</strong> analysis have been completed for the Dupuy Formation reservoir <strong>and</strong><br />
Basal Barrow Group Shale seal to: estimate the pre-injection stress conditions, predict which faults may<br />
enhance vertical migration <strong>of</strong> CO 2 , predict pore fluid pressures that will induce slip on existing faults <strong>and</strong><br />
predict the pore fluid pressures required to initiate new fractures.<br />
Formation pressures provided by the GJV for this study confirm hydrostatic pressures in wells on Barrow<br />
Isl<strong>and</strong> in the depth range <strong>of</strong> the available data (1200-2500 m). Predicted vertical stress (S v ) increases<br />
linearly with depth. At a depth <strong>of</strong> 2100 m, the values <strong>of</strong> S v predicted pre- <strong>and</strong> post-Data Well are consistent<br />
at 46 <strong>and</strong> 47 MPa, respectively.<br />
Extended leak-<strong>of</strong>f <strong>and</strong> mini-frac tests constrain the magnitude <strong>of</strong> the minimum horizontal stress (S hmin ).<br />
Estimates <strong>of</strong> S hmin use the ratio <strong>of</strong> minimum effective stress to effective vertical stress (σ hmin ’ / σ v ’);<br />
however, further documentation <strong>of</strong> the derivation <strong>of</strong> this ratio is required. At a depth <strong>of</strong> 2100 m the ratio <strong>of</strong><br />
minimum effective stress to vertical effective stress is 0.269. This value suggests a current mobilised<br />
friction angle within the Upper Massive S<strong>and</strong> that is approaching the failure angle determined by the rock<br />
mechanics testing programme. This indicates that relatively small pressure increases have the potential to<br />
result in shear failure (i.e., stress conditions that satisfy the Mohr Coulomb failure criterion) within at least<br />
the upper parts <strong>of</strong> the intended injection formation (Upper Massive S<strong>and</strong> <strong>and</strong> Lower Dupuy). Further<br />
reservoir geomechanical models are required to determine the likelihood <strong>of</strong> reservoir shear failure during<br />
CO 2 injection. In <strong>Phase</strong> 4 <strong>of</strong> their work programme the GJV propose to conduct further modelling <strong>of</strong> stress<br />
conditions in the reservoir during injection to identify the operating injection pressures required to avoid<br />
shear failure.<br />
Tensile strength magnitudes have been used to compute the maximum horizontal stress (S Hmax ). The small<br />
number <strong>of</strong> rock tests conducted to estimate tensile strength magnitudes (two specimens per sample zone as<br />
xxvi
opposed to the 10 samples recommended by the American Society for Testing <strong>and</strong> Materials) suggest that<br />
the variability in tensile strength <strong>and</strong> S Hmax will not be fully represented in the results.<br />
The stress regime beneath Barrow Isl<strong>and</strong> is now considered more likely to be normal (S hmin < S Hmax < S v ),<br />
rather than strike slip (S hmin < S v < S Hmax ), with S Hmax trending approximately E-W, which is consistent with<br />
the regional neotectonics. The change in interpretation <strong>of</strong> the stress regime resulted from the decrease in<br />
S Hmax from pre- to post-Data Well.<br />
The GJV should consider using Chevron’s GeoMechanical_Reservoir Simulator (GMRS) code to conduct<br />
reservoir-geomechanical simulations to better underst<strong>and</strong> the stress path that will be followed during CO 2<br />
injection <strong>and</strong> use those results to conduct a series <strong>of</strong> triaxial tests to confirm the behaviour <strong>of</strong> the Dupuy<br />
Massive S<strong>and</strong> formations. Reservoir-geomechanical simulations will also provide insight into whether the<br />
pore volume change under shear will have a positive or negative impact on injectivity.<br />
Geomechanical Impact on Seals<br />
Injection <strong>of</strong> CO 2 has the potential to produce local <strong>and</strong> regional over-pressurisation <strong>of</strong> the reservoir <strong>and</strong><br />
surrounding rock. Such increases <strong>of</strong> pressure decrease injectivity <strong>and</strong> effective permeability while<br />
elevating the likelihood <strong>of</strong> fracture generation <strong>and</strong> reactivation <strong>of</strong> fault slip. The possibility <strong>of</strong> local overpressurisation<br />
occurring is dependent on a number <strong>of</strong> factors including; i) pre-injection stress conditions in<br />
the reservoir, ii) rate <strong>of</strong> injection, iii) permeability <strong>of</strong> the injection reservoir <strong>and</strong> iv) the depth <strong>of</strong> the<br />
injection point from the base <strong>of</strong> the seal.<br />
Over-pressurisation <strong>of</strong> a reservoir into which CO 2 is being injected is not desirable where it significantly<br />
reduces injectivity <strong>and</strong> produces new fractures <strong>and</strong>/or reactivation <strong>of</strong> slip on existing faults. Predictions <strong>of</strong><br />
slip on existing faults are expressed in terms <strong>of</strong> the differential (i.e., increase relative to pre-injection)<br />
pressure that can be exerted on the reservoir or seal rocks before failure is likely. The formation <strong>of</strong> new<br />
fractures, most likely close to injection wells, can be induced by pressure <strong>and</strong>/or temperature changes<br />
arising from CO 2 injection. The effect <strong>of</strong> CO 2 injection on reservoir pressure, <strong>and</strong> the possible impact this<br />
may have on containment have been examined.<br />
The differential pressure, or critical delta pressure, has been assessed by GeoMechanics International<br />
(GMI) for the Main Barrow, Godwit, Plato, Triller, P18J <strong>and</strong> U22J faults. The critical delta pressure is<br />
partly dependent on the co-efficient <strong>of</strong> friction assigned to each fault. Our analysis <strong>of</strong> the critical delta<br />
pressures presented in the GMI geomechanics report, in combination with the assumption that certain faults<br />
(i.e., Main Barrow, Godwit <strong>and</strong> Triller faults) are not predicted to intersect the CO 2 plume, suggests that<br />
slip on these faults (i.e., Main Barrow, Godwit, Plato, Triller, P18J <strong>and</strong> U22J faults), induced by increases<br />
in pore pressure due to injection <strong>of</strong> CO 2 beneath Barrow Isl<strong>and</strong>, is unlikely to elevate the risk to CO 2<br />
containment.<br />
Rock strength measurements <strong>and</strong> analysis <strong>of</strong> the stress data indicate that fracturing initiated in the Upper<br />
Massive S<strong>and</strong> could grow preferentially in the overlying seal. Our analysis <strong>of</strong> the stress changes expected<br />
to occur in the Upper Massive S<strong>and</strong> during injection also suggests that shear failure (i.e., stress conditions<br />
that satisfy the Mohr Coulomb failure criterion) could occur in this unit. Continued investigation is<br />
suggested on the potential for shear failure in the reservoir <strong>and</strong> seal, <strong>and</strong> should include reservoirgeomechanical<br />
simulations to fully underst<strong>and</strong> the stress changes within the reservoir <strong>and</strong> to estimate the<br />
magnitude <strong>of</strong> potential stress changes within the seals.<br />
Operational aspects <strong>of</strong> the CO 2 injection process include the limitation <strong>of</strong> bottom-hole pressure to avoid<br />
fracturing close to the injection wells, <strong>and</strong> the possible use <strong>of</strong> pressure relief wells. The GJV currently<br />
expects to have 675 psi <strong>of</strong> working pressure available when injection commences. We anticipate the<br />
impact <strong>of</strong> mechanical <strong>and</strong> thermal effects in the determination <strong>of</strong> the maximum bottom-hole pressure will<br />
come under further scrutiny. The Due Diligence Team supports the use <strong>of</strong> pressure-relief wells as a<br />
mitigation strategy <strong>and</strong> encourage the GJV to use coupled geomechanics <strong>and</strong> fluid flow simulators for the<br />
prediction <strong>of</strong> post-injection reservoir pressures.<br />
xxvii
Geochemical Modelling<br />
Comprehensive characterisation <strong>of</strong> formation water samples <strong>and</strong> <strong>of</strong> twelve selected rock samples from the<br />
Dupuy Formation has been documented <strong>and</strong> these data are used for the geochemical modelling <strong>of</strong><br />
CO 2 /water/rock reactions during <strong>and</strong> following CO 2 injection. However, there has been no attempt to relate<br />
the petrography <strong>of</strong> the rock samples used for the geochemical modelling to the petrology <strong>and</strong> facies <strong>of</strong> the<br />
reservoir. Although the geochemical modelling predicts specific outcomes for the rock samples<br />
characterised from reaction with CO 2 -enriched fluids, it is difficult to import these results to the reservoir<br />
model without integration <strong>of</strong> the petrology <strong>and</strong> facies work.<br />
Dehydration <strong>of</strong> an annular region around the wellbore due to injection <strong>of</strong> a CO 2 stream undersaturated with<br />
water is a potential near-wellbore issue. Such drying-out <strong>of</strong> the near-wellbore region can increase the<br />
relative permeability to CO 2 , decrease the absolute permeability due to salt precipitation <strong>and</strong> inhibit waterrock<br />
reactions (which may release fines <strong>and</strong> cause plugging). This process should be assessed through<br />
simulation runs <strong>and</strong> core-flood experiments.<br />
Reactive transport modelling in the far-field Dupuy reservoir predicts porosity changes to be less than 1%<br />
over the first 100 years. Generally the accompanying permeability changes are predicted to be slight over<br />
the same time period. In the post-injection phase, between 100 <strong>and</strong> 10,000 years, the Dupuy Formation<br />
would approach a closed system with the total amount <strong>of</strong> CO 2 in the reservoir fixed. During this time<br />
silicates would react <strong>and</strong> approach chemical equilibrium. This time period is important for the assessment<br />
<strong>of</strong> final trapping modes for the CO 2 in the Dupuy Formation. Porosity changes over the 10,000 year time<br />
frame were predicted to be as high as 10% (in carbonate-rich rocks) but typically tended to be less than a<br />
few per cent. Even though predicted porosity changes were generally small, significant amounts <strong>of</strong> waterrock<br />
reaction occurred resulting in significant changes in water chemistry, particularly with regard to<br />
bicarbonate. These results have important implications for monitoring techniques using geochemical<br />
sampling.<br />
Effect <strong>of</strong> Fluid Geochemistry on Seals<br />
The GJV has a comprehensive MICP programme in place for the Data Well to evaluate the transmissivity<br />
through the primary top seal (i.e., the Basal Barrow Group Shale). As expected, the Basal Barrow Group<br />
Shale exhibited the properties <strong>of</strong> a good seal based on the samples examined (Figure 6). Consequently, the<br />
potential for existing fractures <strong>and</strong> faults that cut across the seal to leak, fracturing <strong>of</strong> the seal due to<br />
overpressuring, weakening <strong>of</strong> the seal due to permeability increases from geochemical reactions, interfacial<br />
tension effects due to the increased acidity <strong>of</strong> the formation water <strong>and</strong> leakage via wells are considered the<br />
only possible mechanisms for breaching <strong>of</strong> the Basal Barrow Group Shale. The GJV is currently<br />
performing a comprehensive core flood program to determine the impact <strong>of</strong> CO 2 saturated fluid interacting<br />
at a s<strong>and</strong>/shale interface (i.e., Dupuy s<strong>and</strong>s <strong>and</strong> Basal Barrow Group Shale).<br />
The geochemical modelling was focused on predicting geochemical reactions in the Dupuy Formation <strong>and</strong><br />
their effect on the transport properties <strong>of</strong> the reservoir. Only one sample from the Basal Barrow Group<br />
Shale primary seal was considered, <strong>and</strong> it was reacted with Dupuy Formation water. As the main thrust <strong>of</strong><br />
the GJV geochemical reports was on short term reactions in the Dupuy reservoir, the modelling done using<br />
one Basal Barrow Group Shale primary seal sample was inadequate.<br />
The Dupuy formation water is predicted to be very reactive with the Basal Barrow Group Shale due to its<br />
high clay fraction (approximately 40%), although the system is rock buffered because <strong>of</strong> the low porosity<br />
(
There is a tendency to treat geochemical <strong>and</strong> geomechanical effects as independent <strong>of</strong> each other. One<br />
concern is that the number <strong>of</strong> geochemical reactions predicted by the modelling (although predicted<br />
porosity changes are small), may geomechanically weaken the seal. If feasible, “chunks” <strong>of</strong> the seal should<br />
undergo geochemical autoclave experiments <strong>and</strong> the reaction products undergo geomechanical testing.<br />
Integrity <strong>of</strong> Existing Wells<br />
Long-term well integrity issues for the geological disposal <strong>of</strong> CO 2 are currently not well understood <strong>and</strong> are<br />
an area <strong>of</strong> active research by many groups internationally. The GJV have recognized this situation in their<br />
documents ‘Technical Evaluation <strong>and</strong> Basis for Development Concept’ <strong>and</strong> ‘Uncertainty Management<br />
Plan’, <strong>and</strong> have incorporated operational <strong>and</strong> ab<strong>and</strong>onment practices to accommodate these uncertainties.<br />
The strategy for ab<strong>and</strong>onment <strong>of</strong> the existing 27 (pre-Data Well) wells penetrating the Dupuy Formation<br />
will be reactive. If the monitoring <strong>and</strong> surveillance plan <strong>and</strong> plume migration forecasts indicate that CO 2<br />
leakage from an existing well is imminent, plans will be developed which may include plug <strong>and</strong><br />
ab<strong>and</strong>onment operations. These operations may incorporate multiple levels <strong>of</strong> redundancy for long-term<br />
sealing. The generic cased-hole <strong>and</strong> open-hole remediation operations developed by the GJV are consistent<br />
with <strong>and</strong> generally surpass current international well ab<strong>and</strong>onment approaches. For the cased-hole plug<br />
<strong>and</strong> ab<strong>and</strong>on generic programme, the GJV has gone beyond operational concerns <strong>and</strong> recognised the<br />
importance <strong>of</strong> eliminating potential areas <strong>of</strong> leakage due to long term corrosion <strong>of</strong> the casing.<br />
The GJV have, however, identified three existing wells (the Data Well, P18J <strong>and</strong> U22J) that may<br />
potentially have the greatest exposure to the CO 2 plume <strong>and</strong>, it is recommended that a more comprehensive<br />
ab<strong>and</strong>onment plan for these three 'at risk' wells should be adopted. The acquisition <strong>of</strong> downhole materials<br />
(casing steel <strong>and</strong> cement), during ab<strong>and</strong>onement operations <strong>of</strong> these wells, <strong>and</strong> the assessment <strong>of</strong> their<br />
ageing characteristics could assist the GJV with managing the ab<strong>and</strong>onment requirements <strong>of</strong> the remaining<br />
well assets on Barrow Isl<strong>and</strong>. This might also assist in formulating the most appropriate ab<strong>and</strong>onment<br />
options for the injection <strong>and</strong> observation wells.<br />
Injectivity<br />
Injectivity estimates depend on the reservoir model <strong>and</strong> the data that was used to develop it. The GJV have<br />
undertaken a number <strong>of</strong> studies addressing injectivity <strong>and</strong> further issues are expected to be addressed as<br />
part <strong>of</strong> their <strong>Phase</strong> IV technical work programme.<br />
Injectivity Data Sources<br />
Injectivity performance predictions can be made using data from routine core analysis, mini-permeameter<br />
measurements, core-flood experiments, well testing <strong>and</strong> numerical reservoir simulations. The GJV<br />
analysed 1593 core samples <strong>and</strong> collected 4518 mini-permeameter readings over a 503 m interval from the<br />
Data Well. The GJV workflow makes significant use <strong>of</strong> numerical simulation, as is accepted practice in<br />
petroleum field development, <strong>and</strong> this is considered the most appropriate tool for analyzing injectivity in<br />
heterogeneous reservoirs.<br />
Well Tests<br />
An injection test was conducted in the Data Well using brine as the injection fluid as opposed to CO 2 . This<br />
allowed the horizontal permeability <strong>of</strong> the formation to be determined with greater certainty than if CO 2<br />
had been used as an injection fluid. The GJV assessed the impact <strong>of</strong> multiphase flow on injectivity via a<br />
combination <strong>of</strong> an extensive review <strong>of</strong> published data <strong>and</strong> numerical reservoir simulation models.<br />
The GJV faced some operational difficulties during their well testing programme (e.g., cement debris <strong>and</strong><br />
formation material plugging pore throats). We believe that the GJV responded to these problems with<br />
appropriate modifications to their well testing programme. The results <strong>of</strong> the three drill stem tests (DSTs)<br />
xxix
are consistent <strong>and</strong> show horizontal permeabilities <strong>of</strong> 21.7 to 28.8 mD (compared with 30-105 mD<br />
determined from routine core analysis for the same intervals). Vertical permeability was also assessed<br />
during one <strong>of</strong> these DSTs <strong>and</strong> during vertical interference tests conducted as part <strong>of</strong> the MDT programme.<br />
Several possible interpretations <strong>of</strong> these data which imply the vertical to horizontal permeability ratio<br />
(k v /k h ) might range from 0.03 to 0.26 were presented. The very high skin factors required in the DST<br />
interpretations were unexpected <strong>and</strong> subsequently attributed to pore throat plugging. Although the GJV has<br />
some contingency plans to remediate skin damage, it is unclear what skin factors would be encountered in<br />
future injection wells drilled in the field <strong>and</strong> this will need to be included as an uncertainty in subsequent<br />
injectivity analyses.<br />
Injectivity Indices<br />
Typically injectivity is controlled by four key parameters:<br />
• pressure, both the maximum achievable bottom hole pressure in the injection wells (to avoid<br />
fracturing the formation) <strong>and</strong> the fluid pressure in the formation;<br />
• the absolute permeability <strong>of</strong> the formation;<br />
• the relative permeability between the different fluids in the formation (i.e., irreducible water<br />
saturation);<br />
• skin factor in the injection wells.<br />
The injectivity index, which relates the injection rate to the pressure difference between the injection well<br />
<strong>and</strong> the reservoir, is best determined in heterogeneous reservoirs like the Dupuy by numerical simulation.<br />
The injectivity index is clearly affected by the maximum permissible well bore pressure in the injection<br />
well that avoids hydraulically fracturing the formation near the well. Creating a hydraulic fracture could<br />
enhance injectivity, although it is viewed as undesirable since it may create a fracture that propagates<br />
vertically upward <strong>and</strong> breaches the top seal. Thermal stresses also affect the potential to fracture the near<br />
well formation since cooling an annular region around the injection well can reduce the fracture gradient <strong>of</strong><br />
the reservoir. The GJV have initiated studies to underst<strong>and</strong> these effects on the fracture gradient, <strong>and</strong> have<br />
demonstrated that thermal effects are potentially significant.<br />
Geomechanical factors such as the in-situ stresses, <strong>and</strong> the elastic modulus <strong>and</strong> Poisson's ratio <strong>of</strong> the<br />
reservoir formation are also shown to be important in controlling the pressure at which these rocks will<br />
fracture. While geochemical issues, such as scale formation, carbonate dissolution <strong>and</strong> fines migration may<br />
also impact injectivity, they are considered to be secondary to the above geomechanical factors.<br />
The role <strong>of</strong> relative permeability in injectivity was assessed by the GJV using a Monte Carlo approach <strong>and</strong><br />
indicates that relative permeability is one <strong>of</strong> the dominant uncertainties in injection predictions. While skin<br />
factor is not as significant an uncertainty, the GJV injectivity report recommends that laboratory<br />
experiments be performed to assess possible damage mechanisms.<br />
<strong>Phase</strong> Behaviour<br />
The main effects <strong>of</strong> CO 2 -H 2 O phase behaviour in reservoir simulation are captured via relative permeability<br />
curves. However, evaporation <strong>of</strong> pore-water into the injected CO 2 near the injection well, as discussed<br />
above, could dehydrate a region close to the injection zone <strong>and</strong> the significance <strong>of</strong> these effects should be<br />
calibrated by core-flood experiments.<br />
It is our opinion that relative permeability curves are the most important control on injectivity related to the<br />
interaction <strong>of</strong> CO 2 <strong>and</strong> brine, <strong>and</strong> should be calibrated by experiment. Geochemical issues, such as fines<br />
release from dissolution <strong>of</strong> carbonates, should definitely not be ignored <strong>and</strong> could also be assessed through<br />
experiments; however the shape <strong>of</strong> the total mobility curve is more likely to control injectivity on time<br />
scales <strong>of</strong> ~20 years.<br />
xxx
Optimal Well Count<br />
The GJV used routine core analysis as conditioning data for the static reservoir model at the Data Well<br />
location, <strong>and</strong> then calibrated the model to the injection test results in the Data Well. Reservoir simulation<br />
predictions (Figure 9) were then used to develop the set <strong>of</strong> (seven) well locations (Figure 10) ensuring that<br />
the CO 2 plume would not reach the Plato <strong>and</strong> Main Barrow faults (Figure 7). The injection rates achievable<br />
in these wells will depend on the fracture gradient <strong>of</strong> the reservoir (which limits the maximum bottom-hole<br />
pressure) <strong>and</strong> is yet to be finalised (see discussion above). Until the fracture gradient (based on mechanical<br />
<strong>and</strong> thermal factors) has been established, the well locations <strong>and</strong> injectivity rates should be considered as<br />
provisional.<br />
Well development schedules also included two surveillance wells at the project outset with two additional<br />
surveillance wells <strong>and</strong> two water production wells in year 5 <strong>of</strong> the project <strong>and</strong> two additional water<br />
production wells in year 10. It is recognized that the GJV will continue to modify these well counts <strong>and</strong><br />
schedules to optimize the project development concept.<br />
Figure 10 Provisional injection wells locations (document G1-TE-Z-0000-PRSX001). Top Upper Massive S<strong>and</strong> to top<br />
Basal Dupuy isopach map (contours in metres).<br />
Injectivity Improvements<br />
Sustainable injectivity <strong>of</strong> CO 2 into the Dupuy Formation is one <strong>of</strong> the critical areas for the GJV to ensure<br />
the successful injection <strong>of</strong> CO 2 beneath Barrow Isl<strong>and</strong>.<br />
To optimise the injectivity for each well, consideration must be given to: injecting at maximum regional<br />
pressure (but still safely below the fracture pressure), injecting into the highest absolute permeability zones,<br />
operating at the CO 2 -end <strong>of</strong> the relative permeability curve <strong>and</strong> minimizing the skin factor.If injectivity<br />
decreases unacceptably, our review supports the following:<br />
• in the case <strong>of</strong> relatively rapid increases in downhole pressure (> 675 psi in three months), the<br />
following solutions are proposed by the GJV:<br />
– re-complete injection wells <strong>and</strong> fracture stimulate or cavity complete,<br />
– re-complete <strong>and</strong> perforate over entire interval (i.e., Upper Massive S<strong>and</strong>, Lower Massive<br />
S<strong>and</strong>stone <strong>and</strong> Basal Dupuy),<br />
xxxi
– change design for subsequent injection wells (e.g., introduce horizontal wells),<br />
– re-consider bottom-hole locations for subsequent injection wells, based on additional<br />
knowledge <strong>of</strong> reservoir heterogeneity acquired from previous drilling,<br />
– drill additional injection wells,<br />
– complete injectors in another stratigraphic unit as well as the Dupuy Formation (e.g., Malouet<br />
S<strong>and</strong>) to facilitate injection at the required rate 1 ;<br />
• in the case <strong>of</strong> gradual increases in bottom-hole pressure due to limited pore space leading to<br />
unacceptable increase in reservoir pressure, the following solutions are proposed by the GJV;<br />
– produce water from the Dupuy Formation to <strong>of</strong>fset reservoir pressure increase,<br />
– complete injectors in another stratigraphic unit as well as the Dupuy Formation (e.g., Malouet<br />
S<strong>and</strong>) to facilitate injection at the required rate 1 ,<br />
• in the case <strong>of</strong> relatively rapid increases in downhole pressure accompanied by significant changes<br />
in formation water chemistry due to chemical reaction with the formation, the following solutions<br />
are proposed by the GJV;<br />
– workover well <strong>and</strong> acid stimulate depending on the specific change in water chemistry (e.g.,<br />
carbonate precipitation),<br />
– re-complete injection wells <strong>and</strong> fracture stimulate or cavity complete.<br />
The Due Diligence Team support the approach taken by the Gorgon Subsurface Development Team in<br />
designing each well to either minimise formation damage <strong>and</strong>/or to allow access to the well <strong>and</strong> if possible<br />
alternative reservoirs for remedial treatments in the event <strong>of</strong> injectivity loss.<br />
Risk to Hydrocarbon Assets <strong>and</strong> Risk <strong>of</strong> CO 2 Leakage to<br />
the Biosphere<br />
Although the injection project is designed to ensure containment <strong>of</strong> the injected CO 2 , there is still a risk <strong>of</strong><br />
leakage in the short (during injection) <strong>and</strong> long (post injection) terms. This risk must be evaluated.<br />
Contamination <strong>of</strong> Assets<br />
Given that Barrow Isl<strong>and</strong> is an operating oil field, an assessment <strong>of</strong> the potential for contamination <strong>of</strong> these<br />
assets (Figure 11), including any significant impact on remaining hydrocarbon potential, by the injected<br />
CO 2 is required.<br />
Consequently, the GJV analysed the spatial <strong>and</strong> temporal relationships <strong>of</strong> existing <strong>and</strong> undiscovered<br />
hydrocarbon assets beneath Barrow Isl<strong>and</strong> <strong>and</strong> adjacent parts <strong>of</strong> the North Carnarvon Basin to potential<br />
CO 2 injection sites <strong>and</strong> expected CO 2 migration paths. Our interpretation <strong>of</strong> the evidence presented by GJV<br />
suggests that the risk to known <strong>and</strong> any as yet undiscovered hydrocarbon assets that might result from CO 2<br />
disposal beneath Barrow Isl<strong>and</strong> is low. However, it is recommended that the GJV should report on how<br />
injected CO 2 beneath Barrow Isl<strong>and</strong> could impact on the development <strong>of</strong> undiscovered Biggada Formation<br />
assets, particularly below the predicted plume extent.<br />
Possible Environmental Impact<br />
The Environmental Impact Statement/Environmental Review <strong>and</strong> Management Programme (EIS/ERMP)<br />
generally fulfils (qualitatively) the guidelines given in the <strong>Department</strong> for Environment <strong>and</strong> Heritage /<br />
1 Prior to injection in any alternate reservoirs, capacity <strong>and</strong> containment would need to be demonstrated.<br />
xxxii
Environment Protection Authority (DEH/EPA) scoping document for environmental impact <strong>and</strong> risk from<br />
CO 2 sequestration activities. The GJV have produced an extensive <strong>and</strong> wide-ranging document which, in<br />
our view, correctly focuses on the target Dupuy Formation. However, the work, as it currently st<strong>and</strong>s, has<br />
limitations (outlined below), which the regulator <strong>and</strong> the GJV may wish to consider for future technical<br />
work programmes.<br />
The CO 2 injection project was extensively documented <strong>and</strong> subjected to public comment as part <strong>of</strong> the<br />
Gorgon Project Environmental Impact Assessment Process. Following this process the WA Environmental<br />
Protection Authority found that the environmental risks associated with the CO 2 injection project were<br />
acceptable <strong>and</strong> recommended that CO 2 injection must proceed as an integral component <strong>of</strong> the Gorgon<br />
Project.<br />
Risk assessment should play a major role in any CO 2 sequestration project 2 . A variety <strong>of</strong> risk assessment<br />
tools that are currently employed by the hydrocarbons industry are also relevant to CO 2 disposal <strong>and</strong><br />
provide a valuable experience base. In the widely used systems analysis approach, the first step in risk<br />
assessment is to specify the boundaries (in both space <strong>and</strong> time) <strong>of</strong> the CO 2 disposal system to be analysed.<br />
The system can then be described in terms <strong>of</strong> relevant risks <strong>and</strong> their uncertainties.<br />
Figure 11<br />
2006)<br />
Stratigraphic distribution <strong>of</strong> oil reservoirs <strong>and</strong> pools on Barrow Isl<strong>and</strong> (Document G1-NT-PRSX0000073,<br />
The development <strong>of</strong> a system model is clearly progressing for the proposed CO 2 disposal project on Barrow<br />
Isl<strong>and</strong> but quantitative evaluations seem to be mostly confined to the Dupuy Formation where considerable<br />
reservoir modelling is being undertaken. There is, however, little work on likely migration pathways above<br />
the Basal Barrow Group Shale (should the CO 2 breach the Basal Barrow Group Shale), nor will the current<br />
modelling address the consequences <strong>of</strong> gas leakage <strong>and</strong> seepage on the shallow subsurface <strong>and</strong> surface<br />
environments. The failure modes should be evaluated by making an evaluation <strong>of</strong> likelihoods, mitigation<br />
measures <strong>and</strong> ensuing risk.<br />
The timescales considered in the Environmental Impact Statement/Environmental Review <strong>and</strong><br />
Management Programme are related to the life-time <strong>of</strong> the project (i.e., injection <strong>and</strong> monitoring) <strong>and</strong> are<br />
open-ended, although the duration <strong>of</strong> the monitoring programme has yet to be determined. Currently, on<br />
2 A risk assessment report was provided to the review team; this report did not critically review the technical<br />
issues related to containment but used an expert panel to assign risk in a semi-quantitative way.<br />
xxxiii
Barrow Isl<strong>and</strong> the focus is on the effects <strong>of</strong> short-term leakage during the operational phase <strong>of</strong> CO 2<br />
injection <strong>and</strong> then on the monitoring period immediately following injection. The GJV should give greater<br />
consideration to the option <strong>of</strong> examining CO 2 containment failure modes over timescales <strong>of</strong> 1 to 10 years,<br />
10 to 50 years, 50 to 100 years <strong>and</strong> 100 to 1000 years.<br />
The planned environmental monitoring for CO 2 may rely on atmospheric <strong>and</strong> soil CO 2 detection only (with<br />
perhaps ‘vegetation responses’ undertaken using remote sensing) <strong>and</strong> does not include monitoring species<br />
or total ecosystem changes. Ecosystem monitoring will be particularly important for detecting rapid<br />
seepage <strong>of</strong> CO 2 should it occur. Such monitoring would provide confidence that the impacts <strong>of</strong> any<br />
potential CO 2 seeps could be fully assessed. No environmental monitoring <strong>of</strong> marine systems is planned in<br />
relation to disposal <strong>of</strong> CO 2 beneath Barrow Isl<strong>and</strong>.<br />
It should be noted that the 10Mtpa Gorgon Project (including the CO 2 project) obtained State <strong>and</strong><br />
Commonwealth Government environmental approvals in September <strong>and</strong> October 2007 respectively. The<br />
State environmental approval under the Environmental Protection Act 1986 (Ministerial Statement No.<br />
748) has imposed conditions on the Gorgon JV relating to the CO 2 injection project, which include:<br />
• Annual Environmental Performance Reporting which requires amongst other things reporting "on<br />
the results <strong>of</strong> environmental monitoring <strong>and</strong> identified Material or Serious Environmental Harm, if<br />
any, resulting from the seepage <strong>of</strong> injected CO 2 to the surface or near surface environments<br />
including those which may support subterranean fauna" (Condition 5; Schedule 3.6);<br />
• The Gorgon JV to prepare <strong>and</strong> implement a monitoring program to satisfy the annual reporting<br />
requirements for the performance <strong>of</strong> the Carbon Dioxide Injection System (Condition 5.2 vi <strong>and</strong><br />
Schedule 3.6).<br />
In addition, there are other conditions such as Condition 8 which requires a Terrestrial <strong>and</strong> Subterranean<br />
Environment Monitoring Program for terrestrial facilities, which includes the CO 2 injection system (as<br />
defined in the Statement). The objective <strong>of</strong> this Program is to establish a statistically valid ecological<br />
monitoring program to detect any Material or Serious Environmental Harm to the ecological elements<br />
outside <strong>of</strong> the Terrestrial Disturbance Footprint (as defined in the Statement).<br />
The EIS/ERMP discusses the effect <strong>of</strong> elevated CO 2 concentrations on humans <strong>and</strong> qualitative risk<br />
assessments for terrestrial fauna <strong>and</strong> flora for unpredicted CO 2 seepages are detailed. Target receptors are<br />
also identified. As a minimum, an assessment <strong>of</strong> the possible impacts <strong>and</strong> recovery rates from CO 2<br />
exposure for key receptors should be undertaken in future technical work. A suggested approach for<br />
evaluating impacts would be to use a variety <strong>of</strong> scenarios at different points in the evolution <strong>of</strong> the injection<br />
site – from operational phase, to different post-injection periods (including worst case scenarios).<br />
Monitoring, Measurement <strong>and</strong> Verification<br />
Having evaluated the risk <strong>of</strong> leakage in both the short <strong>and</strong> long terms through simulation, a monitoring plan<br />
has been developed to detect leakage <strong>and</strong>/or any unpredicted outcomes.<br />
Monitoring <strong>and</strong> Surveillance Plans<br />
The GJV conducted an extensive review <strong>of</strong> potential CO 2 monitoring technologies which covered the use<br />
<strong>of</strong> observation wells (well logging <strong>and</strong> downhole sensors/gauges), seismic measurements, microgravity<br />
measurements, electrical measurements, tiltmeters, geochemical monitoring <strong>and</strong> environmental monitoring.<br />
Our conclusions regarding the overall Monitoring <strong>and</strong> Surveillance Plan as proposed by the GJV are<br />
generally very favourable, <strong>and</strong> it fits closely with the recommendations provided by the IEA monitoring<br />
selection tool (Figure 12).<br />
xxxiv
The GJV have focussed their priorities on the detection <strong>of</strong> early failure modes in the deep subsurface (in<br />
<strong>and</strong> around the target reservoir). This is a sensible approach <strong>and</strong> to some extent, depending on the efficacy<br />
<strong>of</strong> the deep monitoring tools, reduces the requirement for exhaustive shallow or surface monitoring<br />
deployments.<br />
More specifically, the monitoring strategy is guided by the requirements <strong>of</strong> the Uncertainty Management<br />
Plan. Provided this is valid, <strong>and</strong> the highside/lowside outcomes are properly taken into account, then the<br />
overall monitoring plan is largely robust. The major containment risks appear to have been satisfactorily<br />
identified <strong>and</strong> the strategy <strong>of</strong> time-lapse 3D/2D surface seismic, observation wells <strong>and</strong> soil gas<br />
measurements is, in principle, well suited to deal with these risks.<br />
Figure 12 Output from the International Energy Association Greenhouse Gas R&D Programme (IEAGHG) monitoring<br />
selection tool for a simplified Barrow Isl<strong>and</strong> (onshore) scenario with ‘basic’ filter. The tools that would normally be<br />
considered essential are highlighted in red.<br />
Time-lapse surface seismic is identified as the key monitoring tool. Its capability is, however, constrained<br />
by the very variable seismic data quality so far obtained across Barrow Isl<strong>and</strong> <strong>and</strong> the stringent l<strong>and</strong>-use<br />
restrictions imposed on surface activities. A major project risk therefore is the significant possibility that<br />
3D surface seismic may not be able to satisfactorily image the CO 2 plume everywhere. The GJV have<br />
evaluated the main seismic quality parameters <strong>and</strong> a limited seismic pilot study has been carried out to<br />
further optimise the baseline 3D survey <strong>and</strong> assess repeatability. This is commendable but spatial coverage<br />
<strong>of</strong> such a test is limited. It is recommended that the report on the seismic pilot study <strong>and</strong> final specification<br />
for the 3D seismic survey be reviewed in the <strong>Phase</strong> IV assessment.<br />
The GJV has followed a thorough process in identifying the most suitable technologies <strong>and</strong> completion<br />
geometries for monitoring saturation <strong>and</strong> pressure changes in both CO 2 injection wells <strong>and</strong> observation<br />
(surveillance) wells. Clear, well defined objectives for each monitoring variable (pressure, temperature,<br />
saturation, fluid sampling, etc.) have been documented. These objectives have been reflected in the<br />
Uncertainty Management Plan with initial “signposts” or indicators <strong>of</strong> lowside <strong>and</strong> highside project<br />
outcomes identified. These signposts are based on early simulation results <strong>and</strong> will need to be revisited in<br />
light <strong>of</strong> the most recent project study findings (i.e., dynamic simulation model, geomechanics, geochemical<br />
<strong>and</strong> injectivity reports) to ensure they remain reasonable indicators for the implementation <strong>of</strong> mitigation<br />
plans. The monitoring <strong>of</strong> saturation <strong>and</strong> pressure changes in the observation <strong>and</strong> injection wells will help<br />
calibrate the seismic data <strong>and</strong> the integration <strong>of</strong> the seismic <strong>and</strong> well logging datasets will clearly be<br />
beneficial.<br />
xxxv
The proposed observation wells are designed such that formation fluids can be sampled at three points in<br />
the geological succession, two in the Dupuy Formation <strong>and</strong> one in the Barrow Group. However, the GJV<br />
have not included routine fluid sampling in the monitoring programme, preferring to retain it as an option<br />
to be used if the Uncertainty Management Plan indicates that it is required. Formation fluid sampling is the<br />
only direct way to fully characterise the fluids arriving at the wellbore <strong>and</strong> we consider that it would help to<br />
calibrate <strong>and</strong> confirm the log responses, a view which is supported by the use <strong>of</strong> the International Energy<br />
Associated Greenhouse Gas monitoring selection tool for Barrow Isl<strong>and</strong> (Figure 12).<br />
A reconnaissance soil gas monitoring survey is also being undertaken. The report on this <strong>and</strong> the final<br />
specification for the main soil gas survey should also be reviewed in the <strong>Phase</strong> IV assessment.<br />
Based on the available documents, the proposed monitoring schedule covers the
Data Well should also be incorporated into such an integrated report. Further reservoir quality assessment<br />
is strongly recommended using the total core analysis dataset, thin section <strong>and</strong> quantitative XRD data.<br />
More advanced petrographic analyses could also include stable isotope analysis <strong>of</strong> carbonate cements, to<br />
confirm the origin for siderite cement.<br />
We strongly recommend that further studies are undertaken to better underst<strong>and</strong> the depositional setting<br />
<strong>and</strong> the differences between different units (BD, LD, UMS, <strong>and</strong> UD). Existing sedimentology, ichnology,<br />
FMI <strong>and</strong> palynology reports, preferably with a new study <strong>of</strong> benthic foraminifera, should be integrated. It<br />
is recommended that the existing log correlations are reviewed in light <strong>of</strong> data from the Data Well. A<br />
sequence stratigraphic approach to the correlation is suggested, possibly following the development <strong>of</strong> logfacies<br />
interpretations, which should be integrated with seismic interpretations. We recommend that<br />
detailed log correlation is attempted as part <strong>of</strong> an integrated log-correlation-biostratigraphic study. Revised<br />
paleogeographic maps should be generated for each <strong>of</strong> the major intervals, <strong>and</strong> we strongly recommend that<br />
variogram parameters be reviewed, <strong>and</strong> as appropriate modified, following the recommended integrated<br />
study <strong>of</strong> depositional systems in the Dupuy <strong>and</strong> suitable analogue data. Models should be run with a range<br />
<strong>of</strong> variograms to capture uncertainties in facies, <strong>and</strong> sensitivities in the model documented. The use <strong>of</strong><br />
planned sensitivity testing <strong>of</strong> the static model <strong>and</strong> construction <strong>of</strong> a new suite <strong>of</strong> post-Data Well static <strong>and</strong><br />
dynamic models is endorsed. The GJV plan to obtain laboratory measurements <strong>of</strong> relative permeability <strong>and</strong><br />
we strongly recommend that the results from special core analyses, including the assessment <strong>of</strong><br />
dehydration, skin factor, <strong>and</strong> fines release from core-floods, be incorporated in the reservoir simulation<br />
model. We maintain that either a depositional facies scheme or a more detailed petrophysical facies<br />
scheme ought to be developed, which should result in a better underst<strong>and</strong>ing <strong>of</strong> the Dupuy Formation<br />
beneath Barrow Isl<strong>and</strong>.<br />
Further interrogation <strong>of</strong> the flow unit transforms is strongly recommended in association with petrographic<br />
analyses <strong>and</strong> quantitative XRD results, to better define, flow zones for permeability assessment. While the<br />
GJV have indicated that this interrogation is underway, we recommend it includes further evaluation <strong>of</strong><br />
wireline log responses, computed logs <strong>and</strong> FZI zonation in relation to thin section, SEM <strong>and</strong> XRD<br />
petrography <strong>of</strong> s<strong>and</strong>stones, seals <strong>and</strong> baffles, reservoir quality <strong>and</strong> sedimentary facies. Horizontal <strong>and</strong><br />
vertical permeability should also be interrogated by formation, lith<strong>of</strong>acies <strong>and</strong> facies to better underst<strong>and</strong><br />
vertical permeability trends, necessary for more accurate reservoir models.<br />
Three dimensional seismic reflection <strong>and</strong> drill-hole information indicate that faults <strong>and</strong> fractures are present<br />
in the Dupuy reservoir <strong>and</strong> the strata that overlie it. We strongly recommend that all seismically resolvable<br />
faults (including lineaments within the seismic volume considered by the Due Diligence Team to probably<br />
be faults) are interpreted to their tip lines. These interpreted faults <strong>and</strong> predicted sub-seismic faults with<br />
throws <strong>of</strong> ≥ 5m should be incorporated into the static model. In addition, a detailed analysis <strong>of</strong> fractures in<br />
all available core <strong>and</strong> FMI data (include review <strong>of</strong> differences in two FMI reports) should be undertaken.<br />
To augment existing fracture data multi-azimuth walkaways are recommended to effectively deploy some<br />
<strong>of</strong> the seismic analytical techniques outlined for fracture detection.<br />
The choice <strong>of</strong> specific reservoir simulation codes is not considered by the Due Diligence Team to be as<br />
important as the quality <strong>of</strong> the PVT data used in the models <strong>and</strong> the quality <strong>of</strong> the underlying geological<br />
model. However, we do recommend that reservoir simulation models be calibrated by history matching <strong>of</strong><br />
monitoring data as such data is obtained. Furthermore, the GJV are urged to consider models which are<br />
able to couple fluid flow, geomechanics <strong>and</strong> geochemistry.<br />
Geomechanical analysis has been undertaken to determine how the Dupuy reservoir <strong>and</strong> overlying rocks<br />
will respond to the injection <strong>of</strong> CO 2 . To calculate critical instantaneous delta pressures, which provide<br />
information on fault stability, we strongly recommend a conservative approach is adopted <strong>and</strong> that the<br />
minimum reasonable value for fault sliding friction (e.g., 0.7) is used. Fault analysis should also include a<br />
re-examination <strong>of</strong> the potential for injection induced slip on the Main Barrow fault (including the impact <strong>of</strong><br />
dynamic rupture processes) <strong>and</strong> a review <strong>of</strong> the impact <strong>of</strong> slip on hydrocarbon resources adjacent to the<br />
fault. To further improve underst<strong>and</strong>ing <strong>of</strong> how the post-injection reservoir conditions have been<br />
determined, the complete methodology for computing S hmin together with constraints used to compute the<br />
distribution <strong>of</strong> S hmin should be documented. Estimates <strong>of</strong> reservoir stress conditions should be augmented<br />
xxxvii
y additional tensile strength testing (at least 8 additional specimens per zone should be subjected to tensile<br />
strength tests) <strong>and</strong> detailed analysis <strong>of</strong> the frictional strength <strong>of</strong> the top seal rocks. Armed with new rock<br />
strength <strong>and</strong> stress data additional geomechanical simulations <strong>of</strong> injection should be completed to further<br />
examine the resulting stress changes, <strong>and</strong> to predict fracture gradients <strong>and</strong> failure conditions in the reservoir<br />
<strong>and</strong> overlying zones. It is anticipated that estimates <strong>of</strong> the maximum bottom-hole injection pressure will<br />
have to be revisited by the GJV once all geomechanical analysis is finalised <strong>and</strong> the thermal effects are<br />
fully accounted for. We concur with the GJV's plan to use a research simulator built by Chevron for<br />
coupled fluid-flow/geomechanics simulation <strong>and</strong> support the continued analysis <strong>of</strong> pressure relief<br />
strategies.<br />
We recommend the integration <strong>of</strong> petrology <strong>and</strong> geochemical reports, <strong>and</strong> that further geochemical<br />
modelling should be advanced to assess the mineral reactions occurring in a heterogeneous reservoir based<br />
on the facies distribution in the reservoir model. Future geochemical modelling should: a) evaluate the<br />
potential for near-field drying out <strong>of</strong> formation <strong>and</strong> model its effect on injectivity, b) assess the potential<br />
impact <strong>of</strong> geochemical reactions related to release <strong>of</strong> fines, dehydration, ion exchange, <strong>and</strong> wettability, <strong>and</strong><br />
c) re-examine the long term trapping effects (including dissolved <strong>and</strong> mineralised phases). Predicted<br />
formation water chemistry from geochemical modelling should be useful in the improvement <strong>of</strong><br />
observation well monitoring strategies. A strong recommendation is the commissioning <strong>of</strong> a new<br />
modelling report focused on the geochemical stability <strong>of</strong> the seals which addresses the uncertainties related<br />
to the geochemical stability <strong>of</strong> the primary seals. Geochemical modelling <strong>of</strong> the stability <strong>of</strong> seals should<br />
focus on both long (100 - 1,000 yrs) <strong>and</strong> short timeframes. If feasible, additional geomechanical testing<br />
should be completed on samples from geochemical autoclave experiments to test for "s<strong>of</strong>tening" <strong>of</strong> seal.<br />
The GJV has done a thorough job at researching the current underst<strong>and</strong>ing <strong>of</strong> long-term well integrity<br />
issues <strong>and</strong> capturing the historical records associated with the existing 27 (pre-Data Well) wells penetrating<br />
the Dupuy Formation. We would emphasize the importance <strong>of</strong> preserving the drilling/log database for<br />
future assessment by regulators <strong>and</strong> strongly recommend that provision be included in the Well<br />
Remediation Plan for re-examination <strong>of</strong> timing <strong>of</strong> well ab<strong>and</strong>onment based on updated reservoir<br />
simulations. An incremental improvement in the long-term integrity <strong>of</strong> ab<strong>and</strong>oned wells is strongly<br />
recommended whereby intervals between each milled window/cement plug are completely filled with CO 2<br />
-resistant cement. The GJV should also give serious consideration to acquiring downhole samples <strong>of</strong> both<br />
the casing steel <strong>and</strong> cement prior to milling operations associated with the ab<strong>and</strong>onment options <strong>of</strong> existing<br />
wells P18J <strong>and</strong> U22J. Furthermore, the Due Diligence Team strongly recommends that the GJV reconsider<br />
their plans for well construction <strong>and</strong>/or well ab<strong>and</strong>onment <strong>of</strong> proposed water production wells. During the<br />
construction <strong>of</strong> injection <strong>and</strong> monitoring wells we advocate that special care be given to the placement <strong>of</strong><br />
instrumentation (e.g., pressure gauges <strong>and</strong> capillary tubes) on the outside <strong>of</strong> casing to avoid creating a<br />
possible escape conduit via tubing connected to the wellhead.<br />
It is important that the GJV review the drilling/operational issues leading to cement debris present in the<br />
well bore <strong>of</strong> the Data Well <strong>and</strong> identify a plan to avoid future similar problems. While we agree that high<br />
skin factors recorded in the Data Well were due to operational issues, the Due Diligence Team recommends<br />
that the injection well skin factor should be carried forward through the analysis <strong>of</strong> injectivity as a<br />
potentially significant uncertainty. The well test interpretation provided alternative estimates <strong>of</strong> k v /k h so<br />
vertical permeability should also be treated with less certainty in subsequent analysis.<br />
The detailed assessment <strong>of</strong> risks to hydrocarbon assets undertaken by the GJV is considered robust in its<br />
conclusions. However, we recommend that the GJV should document the potential for as yet undiscovered<br />
Biggada Formation assets on Barrow Isl<strong>and</strong>, particularly beneath the predicted location <strong>of</strong> the CO 2 plume<br />
<strong>and</strong>, if there is potential, describe how any such assets could be developed.<br />
The focus on environmental impact <strong>and</strong> risk from CO 2 sequestration activities has to date been on the<br />
Dupuy Formation. However, we strongly recommend that the GJV develop an overarching <strong>and</strong> connecting<br />
view <strong>of</strong> both the shallow subsurface <strong>and</strong> surface systems <strong>and</strong> the Dupuy Formation <strong>and</strong> that longer<br />
timescales are considered in future technical work, to allay any concerns about long-term environmental<br />
impacts. The precautionary principle should be adhered to. Environmental monitoring techniques should<br />
comprise a range <strong>of</strong> environmental methods including those examining the impact <strong>of</strong> any seepage on<br />
xxxviii
ecosystems. The GJV Ecological Monitoring Plan’s activities <strong>and</strong> methods should be incorporated into<br />
monitoring activities for the CO 2 disposal project. As a minimum, it is strongly recommended that an<br />
assessment <strong>of</strong> the possible impacts <strong>and</strong> recovery rates from CO 2 exposure for key receptors be undertaken<br />
in future technical work.<br />
The overall Monitoring <strong>and</strong> Surveillance Plan as proposed by the GJV is generally very thorough with clear<br />
well-defined objectives. Time-lapse seismic is identified as the key monitoring tool <strong>and</strong> hence it is strongly<br />
recommended that the results from the seismic pilot test (including their integration into the 3D baseline<br />
survey planning process) are reviewed as part <strong>of</strong> any <strong>Phase</strong> IV due diligence. We further recommend that<br />
overall spatial repeatability should be tested by an early repeat 3D survey (~2 years after start <strong>of</strong> injection).<br />
For the proposed soil gas survey, the GJV should carefully assess the required density <strong>of</strong> sampling points,<br />
with additional sites around wells, <strong>and</strong> potentially incorporating long term flux <strong>and</strong> concentration data. It is<br />
expected that results from the soil gas pilot study <strong>and</strong> plans for the baseline soil gas monitoring survey will<br />
be reviewed as part <strong>of</strong> any <strong>Phase</strong> IV due diligence.<br />
Since observation wells could provide the most valuable data points with respect to plume migration<br />
verification, it will be important to confirm the saturation measurements obtained from well logging<br />
programs. It is recommended that the GJV review their decision to not acquire fluid samples during<br />
saturation logging in observation wells. It is considered important that the GJV continues to review<br />
advances in technology on the most appropriate tool to measure changes in reservoir saturation <strong>and</strong> we<br />
strongly recommend that the GJV update current log modelling activities in support <strong>of</strong> the decision on<br />
which logging technology is to be used for saturation measurements. Signposts should be refined to reflect<br />
the importance <strong>of</strong> injection well pressure measurements, the process by which pressure data are used to<br />
constrain simulation models should be clarified, <strong>and</strong> the workflow for calibration (<strong>and</strong> up-scaling) <strong>of</strong><br />
saturation logging results for simulation modelling should be described. Even though the preliminary<br />
locations <strong>of</strong> the observation wells have been chosen, it is recommended that provision be included for<br />
changes to locations <strong>of</strong> the observation wells <strong>and</strong> timing <strong>of</strong> monitor surveys as new information becomes<br />
available on the rate <strong>and</strong> direction <strong>of</strong> the migrating plume.<br />
The Due Diligence Team believes that these recommendations can be accommodated in the GJV <strong>Phase</strong> IV<br />
technical work programme.<br />
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