Paralana, South Australia
There deep below the red sand of the Frome Plains, are hot rocks capable of providing enough clean energy to significantly reduce Australia's reliance on fossil fuels. Petratherm and its joint venture partner, Beach Energy, have begun the process of tapping into the vast renewable energy resource to create Australia's first base load, commercial geothermal energy plant. Figure 1 - Regional locality map In September 2005, temperature readings from shallow evaluation drilling (Paralana 1) to around 500m, recorded a geothermal gradient of 76ºC per kilometre, which is among the highest reported shallow temperature gradients in Australia. In June 2006, Petratherm deepened the Paralana well (Paralana 1B) to 1807 metres to assess the temperature gradients and insulating properties (thermal conductivity) of the deeper geological strata. A bottom-hole temperature of 109ºC was recorded. The HEWI Model (Figure 2) postulates that significant cost and risk reductions can be achieved by creating the requisite underground heat exchanger within the naturally permeable and porous insulating rock above the granite heat source.
Paralana - Introduction
Paralana - History
The Paralana site was identified utilizing Petratherm's innovative exploration methodologies to identify potential hot spots. The exploration methodology applies crustal heat flow and thermal conductivity measurements, in combination with state of the art 3D geological and geophysical modeling to build predictive heat models of the near surface crust, thereby generating geothermal exploration targets in greenfield enviornments.
Measurement of insulating properties and thermal gradients within the deeper strata allowed calculation of the heat flow at the Paralana site. This information, along with seismic survey data acquired in October 2007, allows for more accurate prediction of temperatures at greater depths. The data indicates a temperature of 200ºC will occur at the target depths, which is within the range of temperatures which Petratherm has been modeling for commercially viable EGS operation under current Australian electricity market conditions.
Paralana - Subsurface Development Strategy - The HEWI Model
The aim of the HEWI model is to obtain the required fluid flows through shallower drilling and controlled rock fracture. Confirming the validity and applicability of the HEWI model will form the next major stage of development work at Paralana.
There deep below the red sand of the Frome Plains, are hot rocks capable of providing enough clean energy to significantly reduce Australia's reliance on fossil fuels. Petratherm and its joint venture partner, Beach Energy, have begun the process of tapping into the vast renewable energy resource to create Australia's first base load, commercial geothermal energy plant.
Figure 1 - Regional locality map
In September 2005, temperature readings from shallow evaluation drilling (Paralana 1) to around 500m, recorded a geothermal gradient of 76ºC per kilometre, which is among the highest reported shallow temperature gradients in Australia. In June 2006, Petratherm deepened the Paralana well (Paralana 1B) to 1807 metres to assess the temperature gradients and insulating properties (thermal conductivity) of the deeper geological strata. A bottom-hole temperature of 109ºC was recorded.
The HEWI Model (Figure 2) postulates that significant cost and risk reductions can be achieved by creating the requisite underground heat exchanger within the naturally permeable and porous insulating rock above the granite heat source.
Figure 2 - schematic diagram demonstrating the basic concept of an Engineered Geothermal System using the HEWI (Heat Exchanger within Insulator) model.
Existing technical difficulities in achieving a robust sub-surface heat exchanger generally relate to the practice of developing the sub-surface heat exchanger (also termed the reservoir or fluid circulation cell) within the heat producing granite rock. Granite is by nature an impermeable and mechanically strong rock. As a result it is inherently difficult to generate fluid flow through granite, or to develop an effective reservoir articially by mechanically fracturing the rock. Once established, a granite reservoir is also susceptible to chemical reactions (i.e. alteration) which clog fluid pathways and diminish the efficiency of the heat exchanger.
By comparison, the rocks which make up the overlying insulating sediments tend to have greater naturally occurring porosity and permeability, are mechanically weaker, and more susceptible to induced chemical and mechanical stimulation if enhancement of the reservoir is required. The behaviour of sedimentary reservoir rocks is better understood than that of granites and a range of techniques exist to control reactions and remove products of alteration from sedimentary reservoirs. Thus the long term utility of a heat exchanger within the insulating sediments is likely to be greater and less costly than an equivalent granite heat exchanger and more closely approximates the systems successfully used in petroleum reservoirs and conventional geothermal projects.
Extensive research and development undertaken by Petratherm suggests that clear technical advantages are afforded by developing the sub-surface heat exchanger within the overlying insulating sediments, rather than using the current practice of establishing the heat exchanger within the granite (Figure 2). Petratherm refers to this concept as the HEWI model (Heat Exchanger within Insulator).
HEWI provides a unique approach to the problem of engineering a robust sub-surface heat exchanger, through creative adaptation of proven techniques and tools from the petroleum and conventional geothermal industries.
In the second half of 2009 a deep geothermal well, Paralana 2, primarily designed to be an injector well, was drilled to 4003 metres (G.L) AHD (Figure 3). During drilling of the well, several zones of over-pressured fluid between 3670-3864 metres were encountered. The well was originally designed to be steel cased but due to well breakout issues in the lower portion of the well, a result of the abovementioned overpressured brines, the final casing string was set at 3725 metres. The strategy is to perforate the casing at selected target intervals and perform hydraulic stimulations to increase the chance of achieving a commercial flow rate, a key commercial barrier for EGS developments around the world.
Figure 3 - Paralana 2 well completion and geological log
The Paralana micro-earthquake (MEQ) monitoring array has been operational since April 2008, initially recording the background seismicity in the region, prior to ground operations.
The array combines sensitive downhole sondes with surface seismometers to enable the interpretation of a wide spectrum of seismic events (Figure 5). For the hydraulic stimulation in July 2011, the array was upgraded to a real-time monitoring network to enable analysis of micro-seismic events and to manage induced seismic risk.
Four ground accelerometers were also added to the array and were located to measure peak ground velocity with respect to local surface infrastructure. The ground accelerometer data was used in real-time to manage the injection operating process and induced seismic risk.
Figure 4 - Google Earth image of the Paralana area showing distribution of micro seismic array
In January 2011, the Paralana 2 deep well's casing was perforated over the 3679-3685 metres interval, corresponding to the zone where the wireline logging did not indicate the presence of a permeable structure. This was trialled to initiate a complex frac in competent formations around the well bore. The perforation was followed by a small volume stepped injection test that successfully broke down the formation. Injection rates ranged between 1.3 and 5.3 litres per second providing base information to plan the main fracture stimulation works. On completion of the injectivity test, the measured stable well head pressure was 3.940 psi. The high pressure suggests connection to a pre-existing overpressured zone contained in the reservoir rock.
In July 2011 fracture stimulation works were successfully completed. Over a five day period, 3.1 million litres of fracturing fluid were pumped into the Paralana 2 well at pressures up to 9,000 psi. Initial injection rates were low (3 litres per second), but steady improvement occurred over the period principally through the injection of several acid treatments. The reservoir rock sequence contains only trace carbonate so it thought the increased injection rates are principally due to the breakdown of casing cement in and around the injection zone. Near the end of the injection period a maximum sustained pump rate of 27 litres per second was achieved.
The Stimulation produced over 11,000 micro-earthquakes detected by the micro seismic network (Figure 5). The primary aim of the fracture stimulation was to create fractures in the subsurface at least 500 metres from the Paralana 2 well. This was achieved with the stimulated zone extending approximately 900 metres to the northeast and east of the Paralana 2 well and at depths ranging between 3,500 to 4,000 metres.
The fracture network comprises at least 4 main structures, with the principal area of growth, a northeast trending enechelon style tensile opening fracture which dips steeply to the northwest. This feature seems to be bounded either side by steep north-northeast trending structures.
On completion of the stimulation, the calculated stable wellhead pressure remained at approximately 4000 psi. Hence, it appears that the stimulated volume is overpressured and connected into a naturally overpressured zone. This may assist in the recovery of hot fluids from the reservoir.
The largest seismic event detected during the stimulation was magnitude 2.6 on the Richter scale with 98% of the micro-seismic events detected being below 1.0. The magnitude 2.6 was felt as a short and slight vibration by some staff members near the well bore. Companies and people in the surrounding area did not feel the event.
The Richter Magnitude 2.6 event corresponded with a peak particle velocity of 2.36mm per second, which falls within the green operating zone of the Induced Seismicity Risk Management Plan.
Paralana 2 well flow testing was completed successfully in October 2011. Approximately 1.3 million litres of fluid was produced over a seven day period with natural flow rates of up to 6 litres per second. After flowing for seven days, the bottom hole flowing fluid temperature at the perforated interval 3679-3685 metres was recorded as 171 degrees Celcius, which is in line with expectations. The geothermal brines were analysed to assist the determination of safe management procedures for any future scale and/or corrosion issues once in long term production. The flow test confirmed the existence of a natural geothermal system at Paralana which may aid future energy recovery from the hot rocks at depth.
Figure 5 - Paralana 2 - Oblique view of the fracture cloud looking down towards the northeast
An updated Independent Resource Statement prepared by experts in geothermal assessment, Hot Dry Rocks Pty Ltd, for the Paralana resource was released in November 2011 (full report is available on the Company's website). The total estimated recoverable Resource is 38,000 PJth. This could not all be developed in one single stage, however to put it into a realistic context:
The next critical stage of works is the drilling and completion of Paralana 3 into the stimulated volume of rock to complete the fluid circulation loop. A second round of hydraulic stimulation will follow to increase the reservoir volume and connection to the well bores to ensure a commercial fluid circulation rate of approximately 75 litres per second can be achieved. This will be followed by long term circulation testing and finally installation of the initial geothermal plant.
The Beach Energy (formerly Beach Petroleum) joint venture announced in January 2007 enables Beach - an Adelaide-based oil and gas company - to earn up to 36% of the Paralana Project for an investment of $30 million (plus their equity share of project costs) over time, in line with achievement of specific milestones.
The terms of the Beach JV are:
Proof of HEWI Concept Stage - Beach may earn a 21% equity interest by contributing $10 million as follows:
• $5 million for drilling and stimulating the first well, and
• $5 million for drilling and stimulating the second well and circulation tests between the wells.
Beach may withdraw without earning equity after the completion of the first well.
Beyond HEWI Stage - Beach has an option to earn a further 15% equity by contributing $20 million towards the development of the pilot plant stage and future demonstration stages that would be capable of providing power to the Beverley Uranium Mine - just 11 kilometres away.
Petratherm Competent Persons statement
The information in this report that relates to Exploration Results, Geothermal Resources or Geothermal Reserves is based on information compiled by Peter Reid, who appears on the Register of Practicing Geothermal Professionals maintained by the Australian Geothermal Energy Group Incorporated at the time of the publication of this report. Peter Reid is a full time employee of the Company. Peter Reid has sufficient experience which is relevant to the style and type of geothermal play under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the Second Edition (2010) of the Australian Code for Reporting Exploration Results, Geothermal Resources and Geothermal Reserves. Peter Reid has consented in writing to the inclusion in the report of the matters based on his information in the form and context in which it appears.
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