Due to third party failures or scheduled and unscheduled maintenance of downstream operations, KeyWest Resources Ltd. were forced to completely shut-in their oil and gas production in the Bashaw D-2G and D-2L pools for a significant number of days each year. This represented a loss in revenue of approximately $81,000 per day (gross 2002 dollars). KeyWest was anxious to find a solution that would work within the existing regulatory framework and that would eliminate the pool shut-ins due to third party failures. KeyWest also required the solution result in little or no capital expenditure.
The solution to the problem of lost production, was to submit applications to the Alberta Energy and Utilities Board (EUB), to amend existing schemes for enhanced recovery of oil by water injection, to allow for the intermittent re-injection of raw sour solution gas into the D-2G and D-2L pools during times of shut down. This would achieve the two goals of allowing continuous production while conserving the sour gas. The applications were approved, and the operator can now produce oil and gas continuously, even during periods of disruptions of the downstream processing or transportation facilities while still conserving the sour gas.
Due to third party failures or scheduled and unscheduled maintenance of downstream operations, KeyWest Resources Ltd. were forced to completely shut-in their oil and gas production in the Bashaw D-2G and D-2L pools (Figure 1) for a significant number of days each year. This represented a loss in revenue of approximately $81,000 per day (gross 2002 dollars based on $40/barrel oil and $4/MSCF gas Cdn). KeyWest was anxious to find a solution that would work within the existing regulatory framework and that would eliminate the pool shutins due to third party failures. KeyWest also required the solution result in little or no capital expenditure. The application would have to address the EUB's three main concerns; conservation (of the oil), equity and economics.
Applications submitted to the EUB, pursuant to the requirements laid out in Guide 65 Resources Applications for Conventional Oil and Gas Reservoirs, June 2000 sections 2.1 and 4.1, requested the following:
amend Approvals 7609 and 7274, approvals for the injection of water to enhance oil recovery from the Bashaw D2-L and D-2G Pools, respectively, pursuant to Section 26 (1,a) of the Oil and Gas Conservation Act and Guide G-51 by the intermittent re-injection of raw sour solution gas produced from the pool, and to
re-classify the wells approved for Class II water injection in Approvals 7609 and 7274 to Class III injection (sour gas) wells.
The EUB reviewed the initial submission and compiled a list of concerns. We were given 2 weeks to reply. The concerns were mainly questions regarding the suitability and capability of the existing water injection pipeline network to handle the sour gas and questions about the effect of the proposed re-injection on overall oil recovery in the Bashaw D- 2L and D-2G pools.
