Shale gas without borders

Abstract On the outskirts of Grapevine, Texas, USA, there is an unexpectedly high-profile location – a drilling spot. It is not a tourist attraction, but it has become a “holy place” for tourists to visit.
On the outskirts of Grapevine, Texas, USA, there is an unexpectedly high-profile location – a drilling spot.

It is not a tourist attraction, but it has become a “holy place” for tourists to visit. Everything stems from the establishment of a learning center at Chesapeake Energy, where visitors can visit the gas drilling operations nearby. “Drilling day trip” is so popular.

This trend stems from people's curiosity about the mysterious world of energy, and shale gas is the most attractive protagonist in this world.

For some time, the increase in US energy import dependence has often been seen as the strongest evidence of decline. However, the shale gas revolution has changed everything.

Today, petrochemical giants are beginning to believe that the future of the energy industry is in the United States. The shale gas industry, which is booming, not only directly affects the US energy market, but also reverses the fate of many high-energy heavy chemical industries.

Ten years ago, people were still caught in the anxiety of the oil crisis and the development of biofuels. However, the action of the shale-free gas in the past decade has brought about a revolutionary change in the global energy landscape.

After witnessing wars, sanctions and turmoil in the Middle East for decades, oil and gas producers began to change direction and try to reduce their dependence on the region.

A massive action without borders came into being. The foundation is the mysterious sedimentary rock, blended with some special chemicals, plus a little quartz particles, and the perfect combination of many elements has spawned one of the most important commercial stories of this era, shale gas.

From the highly segmented industries in the upstream and downstream, to the new look of the US energy market, to the global transformation of the energy landscape, the shale gas that is booming has changed everything.

At the same time, this magical power is “dongdu” and Chinese companies are eager to try. In the future, with the shale gas development grafting financial innovation, and the pace of marketization such as mineral rights trading, China's shale gas development will also bloom.

Shale treasures rise in unconventional energy

Shale gas, one of the most attractive emerging energy sources in the last decade. Traditional natural gas is decomposed by ancient organisms for many years, but unconventional natural gas such as shale gas exists in deep layers such as oil shale, coal and sandstone.

Shale is a layered, crunchy sedimentary rock that has a hard and easily exfoliated nature and stores natural gas and crude oil in very small voids in the shale. Unlike conventional natural gas that is automatically ejected from the ground as soon as it is drilled from the ground, the thin and widely distributed unconventional natural gas must be specially excavated to be mined underground.

According to industry insiders, traditional oil and gas mining is like “blood in the veins” because the rock gap is large and easy to mine, but the shale gas is mined as “microvascular blood pumping”.

And because of the high cost of mining, this energy was once called "unexploitable gas."

With the technological innovations that began in the 1980s, people first realized the efficient exploitation of shale gas. Since then, initiatives aimed at mining shale gas and shale oil have increased rapidly.

How to “force out” the oil and gas in the shale is the core technology of the entire shale gas industry. The main mining technologies currently used in the United States include horizontal wells, multi-stage fracturing, water fracturing and simultaneous fracturing.

Among them, the most widely known is the hydraulic fracturing technology that was invented by Americans earlier: the injection of chemical-injected water into the underground shale layer with a high-pressure pump can cause cracks in the shale formation near the natural gas well, and then contain quartz with high pressure. Water from particles and chemicals is injected into the borehole. Water pressure creates many small cracks in the shale, and the quartz particles enter the pores to make them incapable of closing. In this way, the natural gas is squeezed out and flowed into the gas well.

These shale gas can sometimes reach the surface very quickly. But if the shale is too dense, the process of reaching the surface may even exceed one year.

Technology to cross Chinese companies eager to try

Compared with decades of mining history in North America, China did not have a shale gas concept until around 2005, and began its substantive work from 2008 to 2009. The first domestic shale gas level Jingwei 201-H1 well was drilled in December 2009, only 5 years old.

The United States has played tens of thousands of wells and formed a mature system. Only two or three hundred wells have been drilled in China. The experience, technology and equipment have not yet fully matured. Despite this, domestic companies are still trying hard. Sinopec [1.47% Fund Research Report] announced last month that the Ministry of Land and Resources's Oil and Gas Reserves Evaluation Office organized an expert group to confirm that the Fuling shale gas field is a typical high-quality marine shale gas with a newly added proven geological reserve of 106.75 billion cubic meters. Meter. This marks the official birth of China's first large shale gas field, which kicked off the commercial development of shale gas in China.

Wang Minsheng, deputy director of the Strategic Planning Institute of Sinopec Petroleum Engineering and Technology Research Institute, told the reporter that the key technologies for shale gas mining in China in the early days, such as horizontal well fracturing, were all learned from abroad. “The United States has rich experience and draws on the starting point of another stove. high". However, due to the complicated geological conditions in China, the shale reservoirs are deeper than the United States, and the technology needs to be improved in combination with the actual introduction.

He further said that the future is mainly to improve the efficiency and reduce the cost of the two major technical breakthroughs, relying on the continuous operation of the well factory, continuous production mode, "that is, in the same small area to play a lot of wells, several wells at the same time drilling, Fracturing, production, repetitive, batch operations, including re-use of drilling fluids, construction vehicles, etc., which can reduce equipment handling, labor waiting, and water resources costs. In addition, the fracture network formed by simultaneous fracturing greatly improves shale Gas well productivity and ultimate recovery.

The concept of “well factory” originated from the Canadian energy company. At present, domestic equipment manufacturers have successively developed complete sets of “well factory” solutions. Key technologies include wellsite deployment, batch operations, special operations drilling rigs, wellbore trajectory control technology, simultaneous fracturing technology, crack monitoring technology, drilling fluid recycling and fracturing fluid recycling.

“The next step in developing shale gas can be successful, and economics is one of the key factors. One of the most important ones is our equipment. Can we make the cost of developing shale gas go down, except for the rig? Cracking, the cost of import alone is relatively high, so it is necessary to achieve localization." Zhao Zhiming, chief consultant of China Petroleum and Petrochemical Equipment Industry Association, pointed out.

Fortunately, Jianghan Siji Factory, Jerry, Corey and Baoji's private enterprises, including Sinopec, are constantly developing new domestic equipment.

Private oil and gas equipment leader Jerry shares released the "Small Well Field Operation" shale gas cracking solution in October last year, which is the world's first solution for shale gas mining under complex geographical conditions. At present, the world's largest power 3100 fracturing truck has been continuously operated in Chuanqing area. 240 barrel closed sand mixing vehicles and fracturing automatic mixing vehicles have been applied in Xinjiang oilfield, and the efficiency and output are more conventional. Equipment increased by more than 50%. In addition, the company launched China's first turbine fracturing truck in March this year, with a maximum power of 4,500 water horsepower. Make China the third country with turbine fracturing equipment after the United States and Russia.

Another private drilling rig and Hong Kong-listed company Honghua Group also released the “integrated” new shale gas overall solution in March this year, completely changing the diesel driving mode during the development of the original shale gas. The gas-fired, gas-electric combined drive equipment replaces the traditional diesel engine with a gas engine, and uses its own shale gas to drive the well site drilling equipment. The substation and transmission grid are established in the shale gas well field, and the shale gas power generation is combined with the shale gas itself. At the same time, equipped with 6000 horsepower fracturing pump and 6 sets of flexible water tank, its unique water tank is 4 times the volume of the traditional water tank, only 1/4 of the floor space, foldable and transportable. It is reported that the use of this solution can reduce the mining area by 50%-65%, save 10% drilling cost, and reduce the carbon dioxide emissions per well by 226 tons.

Industry insiders analyzed that with the advancement of domestic equipment manufacturing capabilities, key technologies such as shale gas well plant operations and horizontal well segmental fracturing have been recombined, the cost of domestic shale gas drilling single wells has dropped from more than 100 million to 7 in the initial period. 80 million, there will continue to decline after the scale of development. In the future, with the shale gas development financial innovation, mineral rights trading and other market liberalization, China's shale gas development will gradually transition from the pilot test area and the southern marine shale breakthrough to the comprehensive development of continental shale.

Excavating a lot of articles in the "gold mine" derivatives

The development of shale gas has already set off a boom in many countries around the world, forming an objective market prospect. According to data released by research firm Grand View this week, the global shale gas market is expected to reach $67.02 billion by 2020. The shale gas production is expected to achieve a compound annual growth rate of 8.3% between 2014 and 2020. Among them, the Asia-Pacific market will become the fastest growing market, with a compound annual growth rate of 66.7% between 2015 and 2020.

The derivative industries that followed were also prosperous. In the United States, the construction of methanol plants using methane, the main component of shale gas, has emerged. Overseas media revealed that many companies, including Methanex, the world's largest methanol producer, will increase production from 2014 to 2017, with a total production increase of 5 million tons per year.

There are other useful sub-components of shale gas. These by-components are raw materials for various organic materials such as resins and coatings, and ethane is a representative. The low price of ethane extracted from shale gas has increased the cost competitiveness of the chemical industry, and the price of by-products such as resins is expected to decrease significantly.

South African petrochemical giant Sasol built an energy facility near the Lake Charles estuary in Louisiana, USA. Take advantage of the cheap natural gas extracted by hydraulic fracturing technology in the Gulf Coast and break down natural gas into ethylene, a chemical used in the manufacture of plastics, coatings and food packaging. The company also plans to convert natural gas into high quality diesel and other fuels.

Shale gas is not only a raw material for fuels and chemicals, but also a reducing agent in the iron making process. According to foreign media, the reducing agent of ordinary blast furnace uses coke, but the iron making process called direct reduction method uses natural gas to reduce. Therefore, cheap shale gas has received attention. Nucor Steel, a large electric furnace company in the United States, and Austrian VAI, built a reduced iron plant in Louisiana and Texas, respectively.

Asian Petrochemical is building tanks and renewing plant equipment to store and process liquefied petroleum gas (LPG) imported from the United States. These petrochemical companies are counting on the large supply of shale gas mining in the United States to replace the higher cost naphtha as a raw material. US consultancy ESAI said that shale gas heat will boost US LPG production. Before 2019, the US LPG surplus will double from 270,000 barrels per day in 2014 to 550,000 barrels per day. Energy consultancy FACTS estimates that by 2020, US LPG exports are expected to increase about two-fold from last year, reaching around 63.5 to 795,000 barrels per day.

Change in pattern

Energy map brewing innovation

Although shale gas is considered a future energy star, some critics believe that people are underestimating the amount of methane that leaks into the atmosphere during natural gas extraction, transportation, and storage. Methane is a major component of natural gas, and its environmental damage is many times more severe than carbon. The German government has planned to stop shale gas drilling for the next seven years because of concerns that shale gas exploration technology may contaminate groundwater.

However, with the continuous improvement of policies and technologies, technicians are constantly exploring the balance between environment and efficiency. At the policy level, the industry consensus is that large-scale commercial development of shale gas requires a good market environment in addition to state financial subsidies. In the United States, the vigorous development of shale gas development is driven by thousands of small and medium-sized private enterprises. China is still dominated by huge oil giants. Private enterprises are still hindering due to restrictions on mining rights, funds, blocks and technology. Big.

In this regard, the Shanghai Securities Journal reporter was informed that, commissioned by the National Energy Administration, Sinopec, PetroChina and CNOOC Energy Research Institute and other units are jointly conducting research on the “13th Five-Year Plan” and medium- and long-term shale gas development issues. According to relevant sources of CNOOC, the reform of the shale gas system was deepened, and its topics focused on innovations in mineral rights, ecological zone construction, gas prices, fiscal and tax subsidies, corporate incentives, local enthusiasm, supporting infrastructure and environmental protection.

Pani Garda, an analyst at consulting firm Wood Mackenzie, believes that the shale gas industry has just started. "It hasn't even reached the age of young people. The plan to maximize production has not yet been finalized, so there is still much room for growth. ”

Another growing shale gas in the process of growth is the global energy landscape disruptor. According to the International Energy Agency (IEA), the global shale gas reserves are 187 trillion cubic meters, equivalent to 196 trillion cubic meters of traditional natural gas reserves. After the commercialization of shale gas mining, global natural gas extraction The number of years is estimated to have risen sharply from the past 59 years to more than 100 years.

Since the beginning of the 21st century, with the emergence of new mining technologies, mining costs have rapidly decreased, and it is now comparable to conventional natural gas. In terms of price, companies that use coal to generate electricity have turned to cheap shale gas, and the industrial competitiveness has increased significantly. In addition to affecting the petrochemical industry, shale gas has also had a profound impact on the energy power generation industry. It has helped the US electricity price become the most competitive country in the world. The manufacturing industry with a high proportion of energy has a tendency to turn to the US to set up a factory.

Japanese media commented that the energy price cut brought by the shale revolution has lowered the electricity bill in the United States. In addition, shale gas is also an inexpensive raw material for various organic materials such as resins and paints, and therefore, the price of organic materials is also expected to decrease. In the future, the United States, where energy, electricity and materials are at very low prices, will become attractive production bases, so the United States may become a world factory in the future.

Applause and coexistence coexist, although it seems that the label attached to the shale gas is unpredictable. But we still see the new global energy landscape slowly opening.

Philip Verleger, an energy economist who had been a government adviser to Ford and Carter in the United States, used football games to make an analogy: shale is like a match between friends, if it starts to rain, everyone They all hid indoors to shelter from the rain. Once the rain stopped, they could quickly start the game again. Large traditional energy projects are more like World Cup games: cancellations are costly, and once cancelled, they take a long time to restart. Shale output is likely to decline very quickly, but it is also very likely to recover quickly.

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