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The Economics of CO2 Storage in Coal Seams with
Enhanced Coalbed Methane Recovery (CO2-ECBM) -

Development of Screening Criteria
Regina Sander
A thesis submitted in fulfilment of the requirements for the degree of

Doctor of Philosophy
School of Petroleum Engineering

Faculty of Engineering
The University of New South Wales
Sydney, Australia
March 2014
ABSTRACT
Carbon capture and storage is a greenhouse gas mitigation strategy that allows the
continuous utilisation of fossil fuels while long-term zero or low emissions alternatives
are being investigated and improved. Coal reservoirs have received attention as CO2
storage sinks as the injection of CO2 has the potential to enhance gas recovery. This
thesis investigates the economic feasibility of CO2 storage in coal reservoirs in an
Australian and a more general context. The objective is the identification of screening
criteria for economic CO2 storage with incremental CBM recovery (Storage-ICBM)
through the development of a methodology that integrates reservoir simulation with
techno-economic modelling to assess the economics of CO2 storage, the identification
of the reservoir properties to which the economics of Storage-ICBM are most sensitive,
the establishment of preliminary operating guidelines, and probabilistic analyses to
establish the conditions that provide CO2 storage in coal with the highest possibility of
economic success.
It is demonstrated that the application of Storage-ICBM can add more value to coal
reservoirs that are less economic to start with, such as low permeability or
undersaturated reservoirs, when gas and CO2 prices are high. However, the first
commercial Storage-ICBM projects are expected to be those for which the threshold to
economic viability is the lowest. The probability of an economic Storage-ICBM project
using vertical wells is highest when the reservoir permeability is between 1 and 100
mD, the cumulative CO2 injected is between 30 and 100 Mt/100 km2, and the
incremental recovery exceeds 2,000 Mm3/100 km2. Higher CO2 prices decrease the
minimum requirements for reservoir permeability and gas content for economic
Storage-ICBM while higher gas prices have the potential to increase the minimum
requirements of these properties. Thus, higher gas prices will not necessarily lower the
threshold for Storage-ICBM to become economically viable, but the presence of a CO2
price will.
The results of this thesis deliver insight into the economics of CO2 storage in coal while
presenting a starting point for screening for coal reservoirs that are likely candidates for
economic CO2 storage.
i
ACKNOWLEDGMENTS
I would like to express my gratitude to my supervisors Guy Allinson, Dianne Wiley,

and Luke Connell. Thank you for your patience, your time, and your valuable advice
and insights.
Thank you, Guy, for taking me on as a student, for sharing your expertise, and for
attempting to improve my written English skills.
Thank you, Dianne, for letting me benefit from your experience, for trusting me, and for
always being available. You are also possibly the fastest reviewer known to mankind.
Thank you, Luke, for all the “nearly theres”, the scientific and technical advice, and for
always having an open door for my many smaller and larger issues.
Further, I am grateful to the CO2CRC for providing financial support and the
opportunity to attend conferences and meetings. It was a great experience.
I would also like to thank the CSIRO, in particular my supervisor Luke Connell, for
giving me the opportunity to continue my studies at CSIRO and providing a great
degree of flexibility to accommodate my needs.
My thanks goes to my friends at UNSW who I was lucky to spend the first years of my
degree with; Minh, Pete, Gus, Olga, and Wanwan. I would also like to thank Nino,
Jennifer, and Rachel at the School of Petroleum Engineering for always being kind and
patient whenever I had to bother them. And there are also my friends at CSIRO who
supported me through the last few years, in particular Tony, Nick B., Nick L., Rita, and
Luke.
Foremost, I would like to thank my parents who always did everything in their power to
support me; my mother who (wrongfully) believed I could do anything I set my mind to
and my father who always motivated me to achieve more. I am grateful for all the
opportunities you provided me with. I know that today you would be very proud and
words cannot express the disappointment and sadness I feel in not being able to share
this with you.
ii
DEDICATION
To my beautiful mother
Brunhild Friederike Johanne Wilhelmine Sander, geb. Warneking

† 13.12.2002
You have given me everything I ever needed. I wish there had been enough time to give
something back.
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TABLE OF CONTENTS
ABSTRACT .................................................................................................... i
ACKNOWLEDGMENTS ............................................................................. ii
DEDICATION ................................................................................................ iii
TABLE OF CONTENTS............................................................................... iv
LIST OF FIGURES ....................................................................................... x
LIST OF TABLES ......................................................................................... xix
LIST OF ACRONYMS ................................................................................. xxi
NOMENCLATURE ....................................................................................... xxii
PUBLICATIONS ........................................................................................... xxix
1 INTRODUCTION .................................................................................. 1
1.1 CLIMATE CHANGE AND ITS CONSEQUENCES........................................... 1

1.1.1 Australian CO2 emissions ............................................................................. 2
1.2 CARBON CAPTURE AND STORAGE .............................................................. 3

1.2.1 CO2 capture technologies .............................................................................. 3
1.2.2 CO2 storage sinks .......................................................................................... 4
1.2.3 Large scale CCS and storage projects ........................................................... 4
1.3 CO2 STORAGE IN COAL SEAMS ..................................................................... 5

1.3.1 CBM in Australia .......................................................................................... 5
1.3.2 Enhanced coalbed methane recovery (ECBM) ............................................. 6
1.4 RESEARCH OBJECTIVE & THESIS OUTLINE ............................................... 6
2 LITERATURE REVIEW - CO2 STORAGE IN COAL WITH ENHANCED

COALBED METHANE RECOVERY ................................................. 8
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2.1 ORIGINS OF COAL SEAM GAS ........................................................................ 8
2.2 THEORY OF GAS MIGRATION IN COAL ..................................................... 10

2.2.1 The nature of coal porosity ......................................................................... 10
2.2.2 Gas storage in coal ...................................................................................... 12
2.2.3 Fluid transport in coal ................................................................................. 21
2.2.4 Reservoir simulation ................................................................................... 35
2.3 GAS RECOVERY FROM COAL SEAMS ........................................................ 38

2.3.1 Primary recovery ......................................................................................... 38
2.3.2 Parameters affecting CBM recovery ........................................................... 39
2.3.3 CBM wells .................................................................................................. 40
2.3.4 Enhanced recovery processes ...................................................................... 42
2.4 CO2 STORAGE IN COAL SEAMS ................................................................... 44

2.4.1 Screening criteria for CO2-ECBM .............................................................. 44
2.4.2 Worldwide CO2-ECBM potential ............................................................... 45
2.4.3 ECBM worldwide pilots ............................................................................. 49
2.4.4 Operational guidelines for CO2-ECBM ...................................................... 52
2.5 THE ECONOMICS OF CO2 STORAGE IN COAL SEAMS ............................ 54

2.5.1 Economic feasibility of CO2-ECBM / Storage-ICBM ................................ 56
2.5.2 Probabilistic economics of Storage-ICBM ................................................. 58
2.6 RESEARCH GAPS ............................................................................................. 59
3 RESERVOIR SIMULATION STUDIES OF CO2 INJECTION INTO COAL

SEAMS FOR CBM RECOVERY ENHANCEMENT AND CO2 STORAGE
62
3.1 INTRODUCTION TO SPRING GULLY, BOWEN BASIN ............................. 62
3.2 CONSTRUCTION OF THE RESERVOIR MODEL ......................................... 64

3.2.1 Compilation of initial average reservoir properties .................................... 64
3.2.2 Well design.................................................................................................. 66
3.2.3 Reservoir model grid ................................................................................... 68
3.2.4 Selection of model isotherms and permeability .......................................... 70
3.2.5 CO2 sorption isotherm ................................................................................. 75
3.2.6 Evaluation of the reservoir model ............................................................... 75
3.3 HISTORY MATCHING OF PILOT PRODUCTION DATA ............................ 76
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3.3.1 History matching of DR4, DR8, and DR9 .................................................. 77
3.3.2 History matching of DR5 and DR6 ............................................................. 81
3.3.3 Comparison of history matched data to the reservoir model ...................... 83
3.4 SIMULATION OF CO2 STORAGE WITH INCREMENTAL CBM

RECOVERY........................................................................................................ 84
3.4.1 Well spacing and design.............................................................................. 84
3.4.2 Operating conditions ................................................................................... 85
3.4.3 Simulated flow rates .................................................................................... 86
3.4.4 Relative permeability effects....................................................................... 86
3.4.5 Effect of CO2 injection on reservoir permeability ...................................... 89
3.5 SUMMARY & CONCLUSIONS ....................................................................... 92
4 METHODOLOGY TO DETERMINE THE ECONOMICS OF CO2

CAPTURE AND STORAGE WITH INCREMENTAL CBM RECOVERY
93
4.1 MODEL SYSTEM BOUNDARIES ................................................................... 93
4.2 THE COSTS OF CO2 AVOIDED ....................................................................... 95

4.2.1 CO2 capture and storage cash flows ............................................................ 95
4.2.2 Determination of the CO2 avoided through CCS ........................................ 98
4.2.3 Calculation of the specific cost of CO2 avoided ....................................... 100
4.3 CO2 CAPTURE AND ITS COSTS ................................................................... 101

4.3.1 The CO2 balance ....................................................................................... 101
4.3.2 The cost of capture .................................................................................... 103
4.3.3 CO2 as a unit cost ...................................................................................... 104
4.4 CO2 STORAGE AND ITS COSTS ................................................................... 105

4.4.1 Scaling costs .............................................................................................. 105
4.4.2 Production and injection wells .................................................................. 106
4.4.3 Pipelines .................................................................................................... 109
4.4.4 CO2 and natural gas compression ............................................................. 109
4.4.5 Gas processing .......................................................................................... 111
4.4.6 Gas sales .................................................................................................... 112
4.5 BASELINE ASSUMPTIONS FOR THE DCF MODEL.................................. 112
4.6 ECONOMICS OF CCS-ICBM / STORAGE-ICBM AT SPRING GULLY .... 114

4.6.1 Case specific assumptions ......................................................................... 115
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4.6.2 Economic evaluation of CCS-ICBM at Spring Gully ............................... 116
4.6.3 Spring Gully Storage-ICBM economics ................................................... 120
4.6.4 The individual cost components of CO2 storage at Spring Gully ............. 121
4.6.5 The Australian tax regime and its effect on CCS / Storage-ICBM
economics ................................................................................................. 124
4.7 CONCLUSIONS ............................................................................................... 128
5 THE EFFECT OF PARAMETER VARIABILITY ON STORAGE-ICBM

ECONOMICS ......................................................................................... 130
5.1 METHODOLOGY ............................................................................................ 130
5.2 SENSITIVITY TO ECONOMIC PARAMETERS ........................................... 131

5.2.1 Cost sensitivity .......................................................................................... 131
5.2.2 Gas price sensitivity .................................................................................. 133
5.3 SENSITIVITY TO RESERVOIR PROPERTIES ............................................. 135

5.3.1 Reservoir properties affecting primary recovery ...................................... 135
5.3.2 Reservoir permeability .............................................................................. 136
5.3.3 Variations in seam saturation with changing gas content (CH4 isotherm =
constant) .................................................................................................... 140
5.3.4 Variations in Seam saturation with constant gas content .......................... 142
5.3.5 CO2:CH4 sorption ratio ............................................................................. 146
5.3.6 Comparison of the impact of different reservoir properties ...................... 148
5.4 CONCLUSIONS ............................................................................................... 151
6 SCREENING CRITERIA AND PRELIMINARY OPERATING

GUIDELINES FOR ECONOMIC STORAGE-ICBM ....................... 153
6.1 INTRODUCTION ............................................................................................. 153
6.2 METHODS AND ASSUMPTIONS ................................................................. 154

6.2.1 CO2 as a source of revenue ....................................................................... 154
6.2.2 The relative NPV of Storage-ICBM ......................................................... 155
6.2.3 Economic parameters ................................................................................ 156
6.2.4 Reservoir properties and operational parameters ...................................... 157
6.3 SENSITIVITY TO RESERVOIR PERMEABILITY ....................................... 161

6.3.1 Primary recovery economics – f(k) ........................................................... 162
6.3.2 CO2 injection performance – f(k).............................................................. 163
vii
6.3.3 Storage-ICBM in high permeability coal – 6 mD (ki = 100 mD) ............ 170
6.3.4 Storage-ICBM in medium permeability coal – 0.6 mD (ki = 10 mD) ..... 175
6.3.5 Storage-ICBM in low permeability coal – 0.06 mD (ki =1 mD) ............. 178
6.3.6 Results - effect of permeability ................................................................. 180
6.4 SENSITIVITY TO GAS CONTENT AND SEAM SATURATION ............... 185

6.4.1 Primary recovery economics – f(Gc) ......................................................... 186
6.4.2 CO2 injection performance – f(Gc)............................................................ 187
6.4.3 Medium gas content – 7.5 m3/T (kf = 3.5 mD) ......................................... 189
6.4.4 Low gas content – 3.75 m3/t (kf = 2.3 mD) ............................................... 191
6.4.5 Results – effect of gas content and undersaturation .................................. 193
6.5 SUMMARY AND APPLICABILITY OF RESULTS ...................................... 197
6.6 QUALITATIVE DISCUSSION OF OTHER FACTORS AFFECTING THE

ECONOMIC FEASIBILITY OF STORAGE-ICBM....................................... 199
6.6.1 Fracture opening pressure ......................................................................... 199
6.6.2 Coal swelling and compressibility ............................................................ 200
6.6.3 CH4 isotherm and seam saturation ............................................................ 201
6.6.4 CO2 isotherm ............................................................................................. 201
6.6.5 Depth to coal ............................................................................................. 202
6.6.6 Seam thickness .......................................................................................... 202
6.6.7 Well costs .................................................................................................. 204
6.6.8 Compression costs..................................................................................... 204
6.6.9 Discount rate ............................................................................................. 205
6.7 CONCLUSIONS ............................................................................................... 205

6.7.1 Screening criteria for economic Storage-ICBM ....................................... 206
6.7.2 Preliminary operating guidelines .............................................................. 206
7 INCORPORATING UNCERTAINTY INTO THE ECONOMIC

ASSESSMENT OF STORAGE-ICBM ................................................ 208
7.1 INTRODUCTION ............................................................................................. 208
7.2 METHODOLOGY ............................................................................................ 209

7.2.1 Reservoir model ........................................................................................ 210
7.2.2 Operational design .................................................................................... 210
7.3 INPUT DISTRIBUTIONS ................................................................................ 211

7.3.1 Reservoir properties .................................................................................. 211
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7.3.2 Economic parameters ................................................................................ 221
7.4 MONTE CARLO RESULTS ............................................................................ 230

7.4.1 Analysis of input and output distributions ................................................ 230
7.4.2 Distribution of the NPV of Storage-ICBM ............................................... 233
7.4.3 Sensitivity to input parameters .................................................................. 235
7.4.4 Effect of reservoir properties on the NPV of Storage-ICBM .................. 237
7.4.5 Sensitivity to the CO2 injected .................................................................. 242
7.4.6 Sensitivity to incremental recovery........................................................... 244
7.4.7 The specific cost of CO2 avoided in Storage-ICBM ................................. 246
7.4.8 The effect of the CO2 price and the gas price ........................................... 247
7.4.9 Critical reservoir property values for Storage-ICBM ............................... 250
7.5 DISCUSSION .................................................................................................... 254
7.6 CONCLUSIONS ............................................................................................... 255
8 CONCLUSIONS ..................................................................................... 258
9 REFERENCES ....................................................................................... 264
APPENDIX - REALISATIONS FROM THE MONTE CARLO ANALYSIS 291
ix
LIST OF FIGURES
Figure 1.1: Annual CO2-eq emissions by sector from 2001 to 2011. Graph from DCEE
[2012]. ....................................................................................................... 2
Figure 2.1: Schematic of face and butt cleats modifiedfrom Remner et al. [1984]. ....... 11
Figure 2.2: Comparison of gas in place for a coal seam and a conventional gas reservoir
(gas sand) as a function of pressure modified from Zuber [1996]. ......... 12
Figure 2.3: Six types of adsorption isotherms modified from Sing et al. [1985]. Type I is
the Langmuir isotherm. ........................................................................... 14
Figure 2.4: CO2, CH4, and N2 sorption isotherms for Fruitland coals, San Juan Basin
modified from Arri et al. [1992] with modifications by White et al.
[2005]. ..................................................................................................... 18
Figure 2.5: Sorption isotherm highlighting the impact of undersaturated coals on
pressure drawdown. ................................................................................. 20
Figure 2.6: Flow-mechanism of methane in coal seams modified from Remner et al.
[1984]. ..................................................................................................... 22
Figure 2.7: Matchstick geometry representing a coal reservoir (modified from Seidle et
al. [1992]). ............................................................................................... 26
Figure 2.8: Effect of pore pressure on coal permeability (for εl/β = 8 and po = 7,580 kPa)
modified from Palmer and Mansoori [1998]. .......................................... 27
Figure 2.9: Volumetric strain approximated as a linear function of adsorbed gas content
for fivecoal core samples (modified from Connell et al. [2013]). The
measurements have been corrected with respect to effective stress. ....... 29
Figure 2.10: Volumetric swelling as a function of absolute adsorption. Sample 1 and 3
from Day et al. [2008], other data from Levine [1996] and Bustin [2004]
(modified from Day et al. [2008]). .......................................................... 30
Figure 2.11: CH4 sorption strain as a function of pressure (modified from Cui and
Bustin [2005]).......................................................................................... 31
Figure 2.12: Relative permeability curves achieved through history matching of field
production (modified from Meaney and Paterson [1996]). ..................... 34
Figure 2.13: Typical three stage coal well production profile (modified from Zuber
[1996]). .................................................................................................... 38
Figure 2.14: Primary and enhanced CH4 recovery rates for a fully gas saturated coal
reservoir using CO2 and N2 (or flue gas) injection (modified from Gunter
et al. [1997]). ........................................................................................... 43
Figure 3.1: Spring Gully location in the Bowen Basin, Queensland [Queensland
Government, Department of Mines, 2009].............................................. 63
Figure 3.2: Relative permeability curve presented by Wold et al. obtained through
history matching of Dawson River 4 in the Bowen Basin (modified from
Wold et al. [1995]), which was also history matched by Meany and
Paterson [1996]........................................................................................ 65
x
Figure 3.3: Comparison of the CBM flow rate obtained using the 20 x 20 x 1 and the 30
x 30 x 1 grids. The deviation of the 30 x 30 x 1 grid from the 20 x 20 x 1
grid is represented by the blue coloured curve. ....................................... 69
Figure 3.4: Aerial view of the reservoir grid. The grid uses 20 x 20 x 1 blocks to
describe a volume of 500 m x 500 m x 6.5 m which represents a quarter
of the well drainage area. The producer well is located in the bottom left
corner of the grid and is defined as a quarter well. An injection well is
placed in the top right corner which is shut-in during primary recovery.
The grid blocks are not of equal size, but increase in size with increasing
distance from the well. Smaller grid blocks around the wells are used to
capture the near well behaviour as best as possible, ............................... 70
Figure 3.5: CH4 sorption isotherms measured for samples taken from the northern and
central Bowen Basin and Hunter Basin coals [Esterle et al., 2006;
Laxminarayana and Crosdale, 1999]. ACARP CH4 isotherms presented
at 15% ash content, CH4 isotherms from Laxminarayana and Crosdale
presented as received. .............................................................................. 72
Figure 3.6: CH4 production rates for the three different isotherms in comparison to peak
rates quoted by Origin Energy. ................................................................ 73
Figure 3.7: CH4 production rates as a function of reservoir permeability compared to
CH4 production peak rates quoted by Origin Energy. ............................. 74
Figure 3.8: CO2 sorption isotherm (presented at 15% ash content) for Bowen Basin and
Hunter coals with a volatile matter content of 20 – 24.9 % (modified
from Esterle et al. [2006]) which was used for the simulation. ............... 75
Figure 3.9: Location of wells DR4, 5, 6, 8, and 9 in the Spring Gully licence areas PL
195, ATP 701P (now PL 204), and ATP 529P [Oil Company of
Australia, 2003b]. Scale unknown........................................................... 77
Figure 3.10: Best gas rate match for well DR4 compared to the recorded flow rates [Tri-
Star Petroleum Company, 2001a]............................................................ 78
Star Petroleum Company, 2001d]. .......................................................... 78
Star Petroleum Company, 2001e]............................................................ 79
Figure 3.13: Relative permeability data derived through history matching of DR4. ...... 81
Figure 3.14: Relative permeability data derived through history matching of DR8. ...... 81
Figure 3.15: Gas and water rates for DR5 [Tri-Star Petroleum Company, 2001b]. It was
not possible to match or obtain a satisfactory approximation of the
production behaviour. .............................................................................. 82
Figure 3.16: Best water rate match for DR6 in comparison to the recorded flow rates
[Tri-Star Petroleum Company, 2001c]. Only the later stage water rate
could be matched. .................................................................................... 83
Figure 3.17: Predicted rates for primary gas recovery (red curve) and the CO2 injection
scenario (blue curves). ............................................................................. 86
Figure 3.18: Differential, primary, and enhanced CH4 recovery rates highlighting the
initial decrease in production rate for the CO2 injection scenario as a
xi
result of relative permeability effects. Point 1: Start of CO2 injection and
decrease in differential gas production; point 2: decrease in enhanced gas
recovery rate; point 3: gas flow stops; point 4: gas starts flowing again. 87
Figure 3.19: The distribution of the water saturation (fraction) within the coal seam after
62 days of production. P1 (bottom left corner) is the producer well, Inj
(top right corner) is the injection well. .................................................... 88
Figure 3.22: The distribution of permeability within the coal seam after 31 days of
production. Permeability around the producer has fallen from the original
250 mD to 109 mD. CO2 injection has not yet commenced. P1 (bottom
left corner) is the producer well, Inj (top right corner) is the injection
well. ......................................................................................................... 90
Figure 3.23: The distribution of permeability within the coal seam after 243 days of
production / 212 days of injection. Permeability around the producer has
increased to 129 mD. Permeability around the injector has fallen to less
than 17 mD due to coal swelling. P1 (bottom left corner) is the producer
well, Inj (top right corner) is the injection well. ...................................... 91
Figure 3.24: The distribution of permeability within the coal seam after 4,740 days of
production. Permeability around the producer has increased to 179 mD
while the CO2 front moves further through the reservoir where it reduces
the permeability to 19 mD. P1 (bottom left corner) is the producer well,
Inj (top right corner) is the injection well. ............................................... 91
Figure 4.1: Schematic of an example carbon capture and storage project with enhanced
CBM recovery. The system boundaries define which components are
included in the CCS DCF model and the Storage-ICBM DCF model. ... 94
Figure 4.2: Scenario (a): existing CBM and power station projects; scenario (b): storage
and capture projects as increments to the existing CBM and power station
projects connected through CO2 supply. The existing projects are in grey,
the incremental projects are in black. ...................................................... 96
Figure 4.3: Illustration of the definition of Storage-ICBM and CO2-ECBM. Storage-
ICBM is the increment to the CBM project, while CO2-ECBM is
equivalent to the sum of Storage-ICBM and the CBM project. .............. 97
Figure 4.4: Definition of CO2-ECBM when the costs for CO2 are included in the form
of CO2 capture costs. In this case the CO2-ECBM project is the sum of
CBM, Storage-ICBM, and capture. ......................................................... 98
Figure 4.5: CO2 flow diagram for (a) the scenario without CCS; and (b) the scenario
with CCS. In scenario (a) the CO2 emissions are vented straight to the
atmosphere, whereas in scenario (b) power station emissions are captured
and stored................................................................................................. 99
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Figure 4.6: Drilling and completion costs (2011) for vertical wells, 1,000 m horizontal
production wells, and 1,000 m horizontal injection wells as a function of
depth. ..................................................................................................... 108
Figure 4.7: Foreign exchange rate between A$ and US$ from January 2002 until April
2012 (data from X-Rates [2012]). ......................................................... 113
Figure 4.8: Net cash flow over time for primary recovery (CBM), enhanced recovery
(CO2-ECBM), CCS-ICBM, and Storage-ICBM. .................................. 117
Figure 4.9: Split of the specific cost of CO2 avoided in CCS-ICBM over CO2 capture
and Storage-ICBM................................................................................. 120
Figure 4.10: Comparison of cumulative capital and operating costs for different
components of the CBM, the CO2-ECBM, and the Storage-ICBM
project. Here, CO2-ECBM = CBM + Storage-ICBM. The well capital
costs include costs for pumps and stimulation for production wells.
Flowlines refer to both CBM gathering and CO2 distribution lines. ..... 123
Figure 5.1: Sensitivity of Storage-ICBM economics to cost changes of the main project
components. ........................................................................................... 132
Figure 5.2: Sensitivity of CCS-ICBM economics to cost changes of the main storage
project components. ............................................................................... 133
Figure 5.3: The effect of a rising gas price on the specific cost of CO2 avoided in CCS-
ICBM and the CO2 purchase price. The maximum breakeven gas price is
$128.50/GJ............................................................................................. 134
Figure 5.4: NPV of primary recovery at Spring Gully as a function of permeability. . 135
Figure 5.5: NPV of primary recovery at Spring Gully as a function of seam saturation
for a) constant gas content / changing methane isotherm (green curve)
and b) increasing gas content / constant methane isotherm (purple curve).
............................................................................................................... 136
Figure 5.6: The specific costs of CO2 avoided in CCS-ICBM and Storage-ICBM as a
function of initial permeability (log scale). ........................................... 139
Figure 5.7: Magnification of the specific cost of CO2 avoided in Storage-ICBM
presented in Figure 5.6. ......................................................................... 139
Figure 5.8: Desorption pressures as a function of initial gas saturation at 8,000 kPa
reservoir pressure................................................................................... 141
Figure 5.9: The specific cost of CO2 avoided in CCS-ICBM and Storage-ICBM as a
function of gas content seam saturation. ............................................... 142
Figure 5.10: Desorption pressures as a function of Langmuir isotherm for a constant gas
content of 12.75 m3/t. The percentage on each isotherm identifies the
corresponding degree of seam saturation. ............................................. 143
Figure 5.11: Effects of a 100% increase in a) Langmuir volume (cross symbol); b)
Langmuir pressure (triangle symbol); c) both Langmuir volume and
pressure (square symbol). The base case isotherm is highlighted in red.
............................................................................................................... 144
xiii
function of initial gas saturation for a constant gas content of 12.75 m3/t.
............................................................................................................... 145
function of CO2:CH4 sorption ratio. ...................................................... 148
Figure 5.14: The specific cost of CO2 avoided in Storage-ICBM as a function of
standardised permeability, gas content, CH4 Langmuir volume, and CO2
Langmuir volume. ................................................................................. 149
Figure 5.15: The specific cost of CO2 avoided in Storage-ICBM as a function of
standardised permeability. ..................................................................... 150
Figure 6.1: Vertical well pattern. Yellow dots represent production wells while the red
dot represents the injection well. The dashed line encloses the area
modelled in SIMEDWin. ....................................................................... 159
Figure 6.2: Horizontal well patterns. Yellow wells are production wells, red wells
represent injection wells. ....................................................................... 159
Figure 6.3: Maximum normalised NPV of primary recovery with horizontal (Hor) and
vertical (Ver)wells for the three permeability classes and three levels of
gas prices (current, medium, and high). ................................................ 163
Figure 6.4: Maximum constant well injection rate as a function of final reservoir
permeability during Storage-ICBM for horizontal and vertical wells... 166
Figure 6.5: Cumulative CO2 injected as a function of annual CO2 injection rate for low,
medium, and high permeability coal. .................................................... 167
Figure 6.6: Cumulative CO2 injected as a function of well injection rate for low,
medium, and high permeability coal. .................................................... 168
Figure 6.7: Time to CO2 breakthrough as a function of annual CO2 injection rate for
low, medium, and high permeability coal. ............................................ 169
Figure 6.8: Relative incremental CBM recovery as a function of annual CO2 injection
rate for low, medium, and high permeability coal................................. 170
Figure 6.9: Normalised relative NPV of Storage-ICBM for S250, S300, S500, and S750
as a function of annual CO2 injected for the Low Price Regime – high
permeability. .......................................................................................... 171
Figure 6.10: Normalised relative NPV of Storage-ICBM for S250, S300, S500, and
S750 as a function of annual CO2 injected for the High Price Regime –
high permeability. .................................................................................. 172
Figure 6.11: Relative NPV of Storage-ICBM as function of injection rate for horizontal
wells and the best vertical well spacing (S500) for the Low Price Regime
– high permeability. ............................................................................... 173
wells and the best vertical well spacing (S500) for the High Price Regime
– high permeability. ............................................................................... 174
S750 as a function of annual CO2 injected for the Low Price Regime –
medium permeability. ............................................................................ 176
xiv
S750 as a function of annual CO2 injected for the High Price Regime –
medium permeability. ............................................................................ 176
wells and the best vertical well spacing (S300 and S500) for the Low
Price Regime – medium permeability. .................................................. 177
wells and the best vertical well spacing (S300 and S500) for the High
Price Regime – medium permeability. .................................................. 178
and vertical wells for the Low Price Regime – low permeability. ........ 179
and vertical wells for the High Price Regime – low permeability. ....... 180
Figure 6.19: Maximum relative NPV as a function of injection rate for low, medium,
and high permeability for the Low Price Regime. ................................ 181
and high permeability for the High Price Regime. ................................ 182
Figure 6.21: Injection rate ranges over which Storage-ICBM is economic for k = 1mD,
10 mD, and 100 mD for the Low and the High Price Regime. ............. 182
Figure 6.22: The effect of permeability on project economics for constant injection rates
of ~1.5 Mt/yr/100 km2 and ~5 Mt/yr/100 km2. ..................................... 183
Figure 6.23: Maximum relative NPV as a function of injection rate for low, medium and
high permeability reservoirs for the Low Price Regime in comparison to
the NPV of S500-Max. .......................................................................... 184
and high permeability reservoirs for the High Price Regime in
comparison to the NPV of S500-Max. .................................................. 185
Figure 6.25: Maximum NPV of primary recovery for the three gas content / saturation
levels and the three gas prices for vertical (V) and horizontal (H) wells.
............................................................................................................... 187
Figure 6.26: Cumulative CO2 injected as a function of well injection rate for low,
medium, and high gas content reservoirs – vertical wells only. ............ 188
Figure 6.27: Relative incremental CBM recovery as a function of annual CO2 injection
rate for low, medium, and high gas content coals – vertical wells only.
............................................................................................................... 189
and vertical wells for the Low Price Regime – medium gas content. ... 190
and vertical wells for the High Price Regime – medium gas content. .. 191
and vertical wells for the Low Price Regime – low gas content. .......... 192
and vertical wells for the High Price Regime – low gas content........... 192
xv
and high gas content for the Low Price Regime.................................... 194
and high gas content for the High Price Regime. .................................. 194
Figure 6.34: CO2-ECBM recovery rates per 100 km2 for S500 - CO2 injection rate
44,000 m3/d/well for the medium gas (MG) and high gas content (HG)
coals respectively. Presented are absolute rates, not incremental rates. 195
Figure 6.35: Injection rate ranges over which Storage-ICBM is economic for Gc = 12.75
m3/t (Sg = 70%), Gc = 7.5 m3/t (Sg = 40%), and Gc = 3.75 m3/t (Sg = 20%)
for the Low and the High Price Regime. ............................................... 196
Figure 6.36: Relative NPV (vertical wells) for 40% and 70% saturated coals (Gc = 7.5
m3/t) for S500. ....................................................................................... 197
Figure 7.1: Measurements of permeability with respect to depth for different Australian
coal regions / basins [Enever et al., 1995; Esterle et al., 2006; QLD
DEEPI, 2010; NSW DPI, 2010]. ........................................................... 212
Figure 7.2: Classes of permeability within the Bowen Basin and their corresponding
probabilities. .......................................................................................... 213
Figure 7.3: Histogram and probability density function for Bowen Basin permeability.
The best fit for the data is a lognormal distribution with m = 2,366 mD
and s = 2,099,365 mD (in normal space). ............................................. 214
Figure 7.4: Gas content as a function of depth for four Australian coal regions [Enever
et al., 1996; Esterle et al., 2006; Saghafi et al., 2008; NSW DPI, 2010;
QLD DEEDI, 2010]............................................................................... 215
Figure 7.5: Histogram and probability density function representative of Bowen Basin
CH4 Langmuir volume. The best fit for the data is a normal distribution
of m = 31.88 m3/t and s = 9.38 m3/t (in normal space). ........................ 216
Figure 7.6: Histogram and probability density function representative of Bowen Basin
CH4 Langmuir pressure. The best fit for the data is a lognormal
distribution of m = 1,695 kPa and s = 286 kPa. .................................... 216
Figure 7.7: Flow diagram describing the generation of the gas saturation probability
distribution............................................................................................. 217
Figure 7.8: Histogram and probability density function for gas saturation. The best fit
for the data is a normal distribution with m = 43.49% and s = 26.70%.
............................................................................................................... 218
Figure 7.9: Flow diagram describing the generation of the probability distribution for
gas content. ............................................................................................ 219
Figure 7.10: Histogram and probability density function for gas content representative
for a depth range of 500 to 1,100 m. The best fit for the data is a normal
distribution with m = 10.59 m3/t and s = 5.55 m3/t. .............................. 220
Figure 7.11: Histogram and probability density function for CO2 Langmuir volume. The
best fit for the data is a lognormal distribution with m = 40.34 m3/t and s
= 15.91 m3/t (normal space). ................................................................. 221
xvi
Figure 7.12: Historical exchange rates Australian Dollar to Euro (EUR) and US Dollar
(US$) from Jan 1999 (year of introduction of the Euro as a traded
currency) to June 2012 [RBA, 2012]. ................................................... 223
Figure 7.13: Histogram and probability density function of carbon credits of the
European ETS for July 2005 till December 2010 converted to Australian
dollars using an exchange rate of EUR0.6/A$ [EEXA, 2010]. ............. 224
Figure 7.14: Histogram and probability density function of Australian CO2 price data
based on the EU ETS (in nominal terms) exclusive of 2007 data [EEXA,
2010; RBA 2011]. ................................................................................. 225
Figure 7.15: Nominal historic Australian and US gas prices since 2004 [AEMO, 2012;
EIA, 2012]. ............................................................................................ 226
Figure 7.16: New contracted gas prices, Queensland aggregate, 2010-2030, in 2011 real
terms (modified from QLD DEEDI [2011]). ........................................ 227
Figure 7.17: Histogram and probability density function of gas prices. The data is best
fitted by a normal distribution with m = A$5.57/GJ and s = A$2.86/GJ.
............................................................................................................... 228
Figure 7.18: The probability density function of the uniform distribution used to
describe variations in the CO2 injection rate as a percentage of
bottomhole pressure (BHP) to represent variations in compression costs.
............................................................................................................... 229
Figure 7.19: Comparison of input and output distribution for permeability. The average
permeability increased from 61.50 mD to 101.73 mD. ......................... 231
Figure 7.20: Comparison of input and output distribution for gas content. The average
gas content increased from 10.15 m3/t to 11.18 m3/t. ............................ 232
Figure 7.21: Comparison of input and output distribution for the CO2 Langmuir volume.
The average CO2 Langmuir volume stayed approximately the same. .. 232
Figure 7.22: Distribution of the NPV of Storage-ICBM............................................... 234
Figure 7.23: Cumulative probability of the NPV of Storage-ICBM showing P10, P50,
and P90 confidence levels. .................................................................... 234
Figure 7.24: Sensitivity of the NPV of Storage-ICBM to the different input parameters.
............................................................................................................... 236
Figure 7.25: NPV of Storage-ICBM as a function of reservoir permeability. .............. 238
Figure 7.26: Annual (blue) and cumulative (green) CO2 injected as a function of
permeability. .......................................................................................... 238
Figure 7.27: Cumulative probability of the NPV of Storage-ICBM for the six different
permeability classes. .............................................................................. 240
Figure 7.28: The NPV of Storage-ICBM as a function of CO2 Langmuir volume. The
plot indicates that the probability of a positive NPV is higher for
realisations with CO2 Langmuir volumes above 35 m3/t. ..................... 241
Figure 7.29: Cumulative CO2 injected as a function of CO2 Langmuir volume. ......... 242
Figure 7.30: The NPV of Storage-ICBM as a function of the cumulative CO2 injected in
Storage-ICBM. ...................................................................................... 243
xvii
Figure 7.31: Cumulative probability of the cumulative CO2 injected in Storage-ICBM
showing P90 (2.64 Mt of CO2), P50 (40 Mt of CO2), and P10 (79 Mt
CO2) confidence levels. ......................................................................... 244
Figure 7.32: NPV of Storage-ICBM as a function of incremental gas recovery. ......... 245
Figure 7.33: Cumulative probability of incrementally recovered gas during Storage-
ICBM showing P90 (-2.74 Bm3), P50 (0.88 Bm3), and P10 (5.17 Bm3)
confidence levels. .................................................................................. 245
Figure 7.34: Cumulative probability of the specific cost of CO2 avoided in Storage-
ICBM showing P10 (A$-0.17/t), P50 (A$35.64/t), and P90 (A$305.60/t)
confidence levels. .................................................................................. 246
Figure 7.35: Histogram of the specific cost of CO2 avoided in Storage-ICBM up to a
cost of A$1,000/t. .................................................................................. 247
Figure 7.36: NPV of Storage-ICBM as a function of the CO2 price. ........................... 248
Figure 7.37: NPV of Storage-ICBM as a function of the gas price. ............................. 248
Figure 7.38: Cumulative probability distribution for the NPV of Storage-ICBM for three
fixed CO2 prices: A$0/t (grey), A$23/t (blue), and A$50/t (green) in
comparison to the NPV obtained using the normally distributed CO2
prices (black). ........................................................................................ 249
xviii
LIST OF TABLES
Table 1.1 Estimates of the worldwide storage capacity of different geological sinks
[Herzog, 1997]. .......................................................................................... 4
Table 2.1: Comparison of global CBM resource estimates by Kuuskraa [1990, 2009],
Boyer [1994], Murray [2000], and Al-Jubori et al. [2009]; *includes
Czech Republic; *includes South Africa, Zimbabwe, and Botswana; ***
includes New Zealand ............................................................................. 47
Table 2.2: Ranking of the world’s most prospective coal deposits for CO2–
ECBM/Sequestration for 13 coal basins by Reeves [2001] with 1 =
lowest and 5 = highest. ............................................................................ 48
Table 3.1: Reservoir properties used for the reservoir simulation of Spring Gully. ....... 66
Table 3.2: Fracture properties used in the simulation. .................................................... 68
Table 3.3: Reservoir properties obtained through the history matching process. Note that
for the simulation either desorption pressure or initial water saturation is
defined. .................................................................................................... 79
Table 4.1: Characteristics of typical 500 MW net output NGCC and PC power stations
without capture [Ho, 2007].................................................................... 102
Table 4.2: The CO2 balance for the 500 MW net output NGCC and PC power stations
using absorption with KS1 solvent [Ho, 2007]. .................................... 103
Table 4.3: Typical costs and prices for CO2 capture from 500 MW net output NGCC
and PC power plants using absorption with KS1 solvent [Ho, 2007]. .. 104
Table 4.4:Baseline parameters used in the DCF model for the economic evaluation of
CCS/Storage-ICBM. .............................................................................. 114
Table 4.5: Case specific parameters for the economic evaluation of CCS-ICBM /
Storage-ICBM at Spring Gully in A$2011 real terms. .......................... 116
Table 4.6: Results of the cash flow analysis of CCS-ICBM at Spring Gully. CCS-ICBM
is the incremental project and thus the sum of capture and Storage-
ICBM. CO2-ECBM is the sum of CBM and CCS-ICBM. .................... 117
Table 4.7: CO2 balance for CCS-ICBM at Spring Gully. ............................................. 118
Table 4.8: Details of Storage-ICBM at Spring Gully. Costs for purchase or supply of
CO2 are not included. ............................................................................ 121
Table 4.9: Individual components of Storage-ICBM and the associated costs. The costs
do not include capture costs or costs for the purchase or the supply of
CO2. ....................................................................................................... 122
Table 4.10: Details for the tax calculations representative of Australian conditions.... 126
Table 4.11: Project economics inclusive of PRRT and income tax. ............................. 126
Table 4.12: Project economics inclusive of PRRT, income tax, and carbon tax. ......... 128
Table 5.1: Key output variables affecting the economics of CO2 storage with respect to
initial reservoir permeability. ................................................................ 137
xix
Table 5.2: Evaluated gas contents and the corresponding level of saturation. ............. 140
Table 5.3: Key output variables affecting the economics of CO2 storage with respect to
gas content / seam saturation. ................................................................ 141
Table 5.4: Gas saturation levels as a function of Langmuir volume and corresponding
desorption pressures. The CH4 Langmuir pressure is constant at 2,030
kPa. ........................................................................................................ 143
Table 5.5: Key output variables as a function of seam saturation. Incremental recovery
is presented as a percentage of the total gas recovered during CBM and
Storage-ICBM. ...................................................................................... 145
Table 5.6: CO2:CH4 sorption ratios obtained through modification of the CO2 Langmuir
volume. The CO2 Langmuir pressure is constant at 1,580 kPa. ............ 146
Table 5.7: Key output variables as a function of CO2:CH4 sorption ratios. ................. 147
Table 6.1: Reservoir property / economic parameter combinations considered in the
analysis. ................................................................................................. 158
Table 6.2: Normalised horizontal well costs. Costs derived as described in Chapter 4,
section 4.4.2. .......................................................................................... 160
Table 6.3: Well spacing and injection rate and the reservoir type they are applied to. The
well number is representative of an area of 100 km2. L = low, M =
medium, H = high permeability. ........................................................... 161
Table 6.4: Final reservoir permeability (effective k) as a result of coal swelling for a
variety of initial reservoir properties and a final CO2 content of
approximately 40 m3/t. .......................................................................... 166
Table 6.5: Gas recoveries for the high, medium and low gas content coal relative to the
high gas content scenario (12.75 m3/t). ................................................. 189
Table 6.6: Operating parameters yielding the highest NPV for specified combinations of
reservoir permeability, gas content, and prices. .................................... 198
Table 6.7: Reservoir properties affecting the profitability of Storage-ICBM and their
consequences. ........................................................................................ 203
Table 7.1: Comparison of minimum, maximum, and average property values for the
input and the output distributions for permeability, gas content, and CO2
Langmuir volume. ................................................................................. 231
Table 7.2: Critical values for the reservoir properties permeability, gas content, and CO2
Langmuir volume for the randomly sampled CO2 and gas prices, for
three fixed CO2 prices, and for four fixed gas prices. ........................... 251
xx
LIST OF ACRONYMS
BHP = Bottomhole pressure

CBM = Coalbed methane
CCS = Carbon capture and storage
CCS-ICBM = Carbon capture and storage with incremental coalbed methane
recovery
CH4 = Methane
CO2 = Carbon dioxide
CO2-eq emissions = Carbon dioxide equivalent emissions
CO2-ECBM = Enhanced coalbed methane recovery through CO2 injection
CEPCI = Chemical Engineering Plant Cost Index
CPRS = Australian Carbon Pollution Reduction Scheme
DCF model = Discounted cash flow model
ECBM = Enhanced coalbed methane recovery
EGR = Enhanced gas recovery
EOR = Enhanced oil recovery
GHG = Greenhouse gas
GIP = Gas in place
N2 = Nitrogen
NCF = Net cash flow
NGCC = Natural gas combined cycle power station
NPV = Net present value
OGIP = Original gas in place
PRRT = Petroleum Resource Rent Tax
PC = Black pulverised coal power station
PS = Power station
Relative NPV = The difference in NPV between the best primary and the best
enhanced recovery project
Storage-ICBM = Storage with incremental coalbed methane recovery
STP = Standard temperature and pressure
UCCI = Upstream capital cost index
UOCI = Upstream operating cost index
xxi
NOMENCLATURE
A= Area (m2)
B= Langmuir constant (kPa-1)
Bgi = Gas formation volume factor at initial pressure (m3 of gas/m3 of
reservoir)
cf = Pore volume compressibility of the fracture system (kPa-1)
C= Concentration (mol/m3)
∆C = Concentration gradient (mol/m4)
C$ = Costs (A$M)
Cgi = Initial adsorbed gas concentration (m3/t)
Ch = Heat of adsorption specific constant (J/mol)
Cref = Literature cost (A$M)
CCBM = Total costs of the CBM project (A$M)
CCO2 = CO2 penalty based on an emissions trading scheme or an
emissions tax ($/t)
CComp = Capital cost of compressions (A$M)
CDW = Costs for a vertical development well (A$M)
CDu = Dubinin constant (-)
CE = Concentration at the boundary between matrix and cleat system
(mol/m3)
CECBM = Total costs of the ECBM project (A$M)
CHPW = Costs for a horizontal production well (A$M)
CI = Capital investment (A$M)
CV/HW = Costs for a vertical well or horizontal injection well (A$M)
Capex = Capital costs (A$M)
∆CBM = Incremental CBM recovery (GJ/yr)
CI = Cost index (-)
CO2,avoided = CO2 avoided in CCS (Mt)
CO2,Capture = CO2 emitted during the capture process (Mt)
CO2,CBM = CO2 emitted by the CBM process (Mt)
CO2,ECBM = CO2 emitted by the ECBM process (Mt)
CO2,inj = Total CO2 injected (Mt/yr)
CO2,PS = CO2 emitted from the power station reference source (Mt)
xxii
CO2,PSwCapture = CO2 emitted from the power station when capture is applied (Mt)
CO2,Storage = CO2 emitted during the storage process (Mt)
CO2,ICBM = CO2 emitted during the Storage-ICBM process (Mt)
CO2,w/oCCS = CO2 emitted without the application of CCS (Mt)
CO2,withCCS = CO2 emitted with CCS being applied (Mt)
∆CO2,Combustion = Difference in CO2 emissions between ECBM and CBM
generated by the burning of natural gas (Mt)
∆CO2,Compr,NG = Difference in CO2 emissions between ECBM and CBM
generated by the compression of natural gas (Mt)
∆CO2,Compr,Inj = CO2 emissions generated by the compression of the injectant gas
(Mt)
∆CO2,inj = Net CO2 injected and stored (Mt/yr)
∆CO2,Prod = Difference in CO2 emissions between ECBM and CBM from
CO2 produced with the natural gas (Mt)
∆CO2,Prod = Difference in CO2 emissions between ECBM and CBM
generated by the energy requirements associated with gas
processing (Mt)
d= Discount rate (%)
Dc = Diffusion coefficient (m2/s)
DI = Drilled well interval (m)
DIHor+Ver = Vertically and horizontally drilled well interval (m)
DIVer = Vertically drilled well interval (m)
E= CO2 emissions intensity of the power station (t/MWh)
ECBM = Average energy content of CBM (39 MJ/m3)
fCO2 = CO2 combustion factor (0.0018 tCO2/m3CH4)
fs = Shape factor (m-2)
g= Gravity (m/s2)
Gc,init = Initial gas content (m3/t)
Gc,sat = Gas content when fully saturated (m3/t)
Gi = Initial gas in place (m3)
h= Coal seam thickness (m)
IRR = Internal rate of return (%)
k= Reservoir permeability (mD)
xxiii
k0 = Initial reservoir permeability (mD)
ka = Average permeability for radial flow (mD)
kav = Adiabatic constant (-)
kg = Gas relative permeability coefficient (-)
ki = Effective permeability of component i (mD)
krg = Relative permeability to gas (-)
kr,i = Relative permeability of component i (-)
krw = Relative permeability to water (-)
kw = Water relative permeability coefficient (-)
kx = Permeability in x-direction (mD)
ky = Permeability in y-direction (mD)
kz = Permeability in z-direction (mD)
mɺ = Mass flow (kg/s)
mɺ F = Field injection rate (Mt/yr)
Mm = Molar mass (kg/kmol)
n= Gas adsorbed (moles)
n0 = Pore volume of the adsorbent (moles)
ng = Gas relative permeability exponent (-)
nIW = Total number of injection wells (-)
nS = Number of compression stages (-)
nw = Water relative permeability exponent (-)
NCFCapture = Net cash flow of the capture project (A$M)
NCFCBM = Net cash flow of the CBM project (A$M)
NCFCCS = Net cash flow of the CCS project (A$M)
NCFECBM = Net cash flow of the ECBM project (A$M)
NCFStorage = Net cash flow of the storage project (A$M)
NCFICBM = Net cash flow of the Storage-ICBM project (A$M)
NCFTransport = Net cash flow of the transport project (A$M)
NPV = Net present value (A$M)
NPVCapture = Net present value of the capture project (A$M)
NPVCCS = Net present value of the CCS project (A$M)
NPVCO2,avoided = Net present value of the CO2 avoided in CCS (Mt)
NPVCO2,captured = Net present value of the CO2 captured (Mt)
xxiv
NPVICBM,rel = Relative net present value of the Storage-ICBM project in
comparison to the most profitable CBM project (A$M)
NPVECBM = Net present value of the ECBM project (A$M)
NPVCBM,max = Net present value of the most profitable CBM project for a given
coal reservoir (A$M)
Opex = Operating costs (A$M/yr)
p= Pore pressure (kPa)
p0 = Initial pore pressure (kPa)
pε = Pressure at strain of ½ ε∞ / matrix shrinkage curve fitting
parameter (kPa)
patm = Atmospheric pressure (kPa)
pg = Gas pressure (kPa)
pin = Compressor inlet pressure (kPa)
pout = Compressor outlet pressure (kPa)
pw = Gas pressure (kPa)
∆pS = Change in equivalent sorption pressure (kPa)
P= Equilibrium vapour (free gas) pressure (kPa)
P0 = Saturation pressure of the adsorbate at adsorption temperature
(kPa)
P$ = Profit (A$M)
PCO2 = Net CO2 price received by the storage operator ($/t)
PD = Desorption pressure (kPa)
PGas = Gas price (A$/GJ)
PHydrostat = Hydrostatic pressure (assumed to represent reservoir pressure)
(kPa)
PL = Langmuir pressure (kPa)
Pout = Power output of the power station (MW)
PRes = Reservoir pressure (kPa)
q= Fluid volume flow (m3/s)
qWell = Well injection rate (m3/d/well)
Q= Flow rate or plant size (m3/s or MW)
Qref = Reference flow rate or reference plant size (m3/s or MW)
r= Radius (m)
rC = Compression ratio (-)
xxv
R= Revenue (A$M)
RCBM = Revenue of the CBM project (A$M)
Rconst = Specific gas constant (kJ/kmol K)
RECBM = Revenue of the ECBM project (A$M)
RGas = Revenue from gas sales (A$M/yr)
RICBM = Revenue from Storage-ICBM ($/yr)
ROI = Return on investment (%)
SG = Gas saturation (-)
Sw = Water saturation (-)
Swfi = Interconnected fracture water saturation (-)
SCCO2 = Specific cost of CO2 avoided (A$/t)
SF = Scaling factor (-)
t= Time (s)
tOp = Operating hours (hrs/yr)
Tav = Average temperature (K)
UCCO2 = Unit cost of CO2 (A$/t)
UCComp = Unit cost compressor (A$M/MW)
UCCI = Upstream capital cost index (-)
v= Fluid velocity (m/s)
Vɺ = Volumetric gas flow rate (m3/yr)
V= Adsorbed gas volume at given pressure (m3/t)
V100% = Maximum theoretical gas content at reservoir pressure (m3/t)
Vg = Volume of adsorbate (m3)
VB = Bulk volume (m3)
VL = Maximum monolayer capacity (Langmuir volume) (m3/t)
VV = Void volume (m3)
VOComp = Variable operating cost of compression (A$M/yr)
WComp = Compression work (MW)
x= Mole fraction (-)
X= Value X to be standardised
XB = Base value of parameter X
Xmax = Maximum value of the investigated range of parameter X
Xmin = Minimum value of the investigated range of parameter X
XSt = Standardised parameter X
xxvi
y= Fraction of gas component (-)
z= Compressibility factor (-)
Greek Symbols
αS = Volumetric shrinkage coefficient (t/m3)

ε= Volumetric matrix strain (-)
ε∞ = Matrix strain at infinite pressure (-)
εatm = Volumetric strain at atmospheric pressure (-)
εg = Coefficient of sorption induced volumetric strain (-)
εk = Multicomponent strain of component k (-)
εmax = Maximum matrix shrinkage strain (-)
εv = Sorption induced volumetric strain (-)
∆εs = Change in matrix strain (-)
Ε= Young’s Modulus (kPa)
φ= Porosity (-)
φ0 = Initial porosity (-)
φatm = Porosity at atmospheric pressure (-)
φf = Interconnected fracture porosity (-)
ηEng = Gas engine efficiency (-)
ηis = Isothermal efficiency (-)
µ= Fluid viscosity (kg/m*s)
µg = Gas viscosity (kg/m*s)
µw = Water viscosity (kg/m*s)
Κ= Bulk modulus (kPa)
ν= Poisson’s ratio (-)
Μ= Constrained axial modulus (mD)
ρ= Fluid density (kg/m3)
ρc = Coal density (kg/m3)
ρCΟ2 = CO2 density at STP (kg/m3)
ρg = Gas density (kg/m3)
xxvii
ρw = Water density (kg/m3)
σ= Effective stress (kPa)
σ0 = Initial effective horizontal stress (kPa)
τ= Desorption time constant (s)
υ= Supercritical flow velocity (m/s)
xxviii
PUBLICATIONS
The following are research publications related to the work in this thesis.
Sander, R., Allinson, W.G., Connell, L.D., Neal, P.R., 2011. Methodology to determine
the economics of CO2 storage in coal seams with enhanced coalbed methane recovery,
Energy Procedia, 4, pp 2129 – 2136.
Sander, R., Connell, L.D., Allinson, W.G., 2011. Target Coals and Operational Design
for CO2 Storage with Incremental CBM Recovery (Storage-ICBM); presented at the
Asia Pacific CBM Symposium, 3-6 May, Brisbane, Australia.
Sander, R., Allinson, G.W., Connell, L.D., 2008. Preliminary Economics of CO2-
ECBM at Spring Gully, Bowen Basin; presented at the CO2CRC Research Symposium,
1-3 Dec, Queenstown, New Zealand.
Sander, R., Allinson, W.G., 2008. The Effect of Gas Prices and Carbon Credits on Field
Development for CO2 Storage in Low Rank Coals; presented at the Asia Pacific CBM
Symposium, 22-24 Sept, Brisbane, Australia.
Sander, R., Allinson, W.G., 2008. Minimizing the cost of CO2 storage in coal seams:
An economic evaluation of CO2 sequestration in low permeability coal fields with
limited storage capacity; presented at the International CBM and Shale Gas Symposium,
19-23 May, Tuscaloosa, AL, USA.
Sander, R., Allinson, W.G., Wiley, D.E., 2006. Economic modelling of CO2 storage in
coal – stand alone CCS project; poster presented at the CO2CRC Research Symposium,
15-16 Nov, Hunter Valley, Australia.
xxix
1 INTRODUCTION
1.1 CLIMATE CHANGE AND ITS CONSEQUENCES

The Intergovernmental Panel on Climate Change (IPCC) has stated that warming of our
climate system is unequivocal [IPCC, 2007]. This is evident based on the observations
made on the long-term global climate. The IPCC [IPCC, 2007] reported that out of the
twelve years between 1995 and 2006, eleven ranked amongst the warmest years since
the recording of global surface temperature in 1850. Since 1961 global sea levels have
risen at an average rate of 1.8 mm/yr and since 1993 at 3.1 mm/yr as a result of thermal
expansion, melting glaciers, ice caps, and polar ice sheets [IPCC, 2007]. A recent study
by the University of Berkley [Berkley Earth, 2012] confirmed the IPCC’s observations.
The authors found that the average global land temperature has risen by about 1.5 °C
over the past 250 years and about 0.9°C in the past 50 years.
Evidence strongly indicates that humans are the most likely cause of climate change as
there is strong agreement between the rise in global surface temperature and the
observed increase in anthropogenic (i.e. man made) greenhouse gas (GHG)
concentrations in the atmosphere [Berkley Earth, 2012]. The increase is primarily
attributed to the use of fossil fuels. As a consequence a rise in global temperature of
0.2°C per decade has been estimated.
The effect of a further rise in global temperature means that for dry regions at mid
latitudes water resources could become even shorter in supply than has been
experienced in recent times, agriculture in low latitudes could suffer due to reduced
water availability and low lying coastal systems are under threat due to potentially
rising sea levels. These are some of numerous possible consequences of climate change
which are outlined in [IPCC, 2007].
To avoid the worst case scenarios and limit the increase in global temperature, a
reduction of GHG emissions is essential. Though renewable energy sources will play an
increasingly important role, the global dependency on fossil fuels as a cheap and easily
accessible energy source is not expected to significantly weaken any time soon.
Therefore, the mitigation of GHG emissions can only be achieved through a
combination of different technologies; for example increased process efficiency,
increased application of renewable energy, and carbon capture and storage. Incentives
1
have to be created to initiate implementation of mitigation strategies; some of these
include the European Emissions Trading Scheme or the Australian Carbon Tax. The
development and implementation of incentives is a responsibility that lies with
Governments.
1.1.1 AUSTRALIAN CO2 EMISSIONS
Australian CO2-eq emissions were 546.3 million tonnes (Mt) in 2011 [DCCEE, 2012].
An overview of the emissions by sector is presented in Figure 1.1. It highlights that in
2011 more than 50% of the CO2-eq emissions were generated by stationary energy
generation sources such as those producing electricity and those producing energy for
manufacturing and energy extraction (mining and petroleum) processes, as well as
residential and commercial purposes [DCCEE, 2012]. Stationary electricity generation
alone contributed approximately 200 Mt/yr CO2-eq, accounting for more than a third of
Australia’s emissions.
Figure 1.1: Annual CO2-eq emissions by sector from 2001 to 2011. Graph from DCEE [2012].
In Australia, electricity is generated predominantly by coal fired power stations where a

distinction is made between black and brown coal [DCCEE, 2012]. Black coal has a
2
higher energy content than brown coal and thus its emissions intensity is less for the
same energy output. The second most important source of energy for stationary
electricity generation in Australia is natural gas [DCCEE, 2012] which has a
significantly lower emissions intensity than coal per unit of energy generated.
Other sources for electricity generation are hydroelectric and other renewable energies.
While their GHG emissions are either zero or considered to be negligible, they only
contribute a small fraction to the overall electricity mix.
1.2 CARBON CAPTURE AND STORAGE

Carbon capture and storage (CCS) is a technology that allows CO2 emissions from a
stationary emitter to be captured before they are released to the atmosphere. The
application of capture is suitable for large scale industrial processes with significant
CO2 emissions such as electric power generation and energy intensive industries such as
cement plants, petroleum refineries, and iron and steel mills. It was shown in Figure 1.1
(section 1.1.1) that in Australia more than 50% of the CO2-eq emissions are generated
by stationary energy generation sources.
Once the CO2 has been captured it is transported to a suitable geological reservoir where
it is injected and stored. As the global storage capacity is limited, CCS is not the final
solution to the world’s GHG emissions problem. CCS is a transitional technology that
allows us to continue our dependency on fossil fuels while long-term alternatives are
being investigated and current low or zero carbon technologies (such as renewable
energy) are being improved.
1.2.1 CO2 CAPTURE TECHNOLOGIES
CO2 is not released as a pure gas from the emissions source. Coal or gas fired power
plants emit flue gas streams of varying CO2 concentration, depending on the power
station technology and the fossil fuel used. In the capture process the flue gas stream is
purified to obtain a stream with a CO2 concentration suitable for transport and storage.
CO2 separation has existed on a small industrial scale since the 1920s. Current process
technologies that can be applied to separate CO2 from a flue gas stream are chemical
3
and physical absorption, gas-solid adsorption, membrane gas separation, and low
temperature cryogenic separation.
1.2.2 CO2 STORAGE SINKS
The purified CO2 stream is compressed and transported to a geological reservoir that
will serve as a storage sink. Transport could occur via pipelines, trucks, or ships,
depending on the location of the reservoir and the quantities to be transported.
Geological sinks commonly considered for CO2 storage include deep saline formations
(on- or off-shore), depleted oil and gas reservoirs, and enhanced recovery processes
such as enhanced oil recovery (EOR), enhanced gas recovery (EGR), and enhanced
coalbed methane recovery (ECBM). Based on the estimated storage capacities presented
by Herzog et al. [1997] in Table 1.1 EOR and ECBM are only niche technologies due to
their comparatively limited estimated storage capacity. However, alongside EGR they
are the only sequestration options that can add value to a project in the absence of
incentives for capturing and storing CO2. Thus, storage of CO2 through EOR, EGR, and
ECBM is likely to become the first economically practicable sequestration technology.
EOR is common practice in the oil industry, but ECBM has not been practised on an
industrial scale and more research and development is required.
Table 1.1 Estimates of the worldwide storage capacity of different geological sinks [Herzog, 1997].
Order of magnitude estimate for

Storage option
worldwide capacity (Gt CO2)
Active oil wells (EOR) 10
Enhanced coalbed methane (ECBM) 5 - 10
Deep saline formations 100 - 10,000
Oil and gas reservoirs 100 - 1,000
Ocean 1,000 - > 100,000
1.2.3 LARGE SCALE CCS AND STORAGE PROJECTS
The feasibility of large-scale CCS projects has been demonstrated by several industrial
projects which were driven by economic considerations. At In Salah, Algeria, CO2 is
4
separated from the produced gas stream and re-injected into the gas reservoir. It is
estimated that approximately 1 Mt/yr of CO2 have been captured and injected since
2004. At Sleipner in Norway, CO2 is separated from produced gas and re-injected into a
saline aquifer above the gas reservoir. Similarly, at Snohvit in Norway CO2 is separated
from produced gas and re-injected into a saline aquifer below the gas reservoir. At
Weyburn in Canada, CO2 is injected to increase oil recovery. The CO2 for the EOR is
captured from a coal gasification plant located in North Dakota, USA and delivered via
a 320 km long pipeline. At Exxon Mobil’s Shute Creek gas processing plant in
Wyoming, USA approximately 7 Mt/yr of CO2 are recovered and used in oil fields to
improve oil production. Further information about past and present CCS projects is
available in a study published by the Global CCS Institute [Global CCS Institute, 2011].
In Australia the only operational storage pilot project is the Otway Project in Victoria; a
joint research project initiated and undertaken by the CO2CRC and its partners. In 2008
the project injected 65,000 tonnes of CO2 into a depleted gas field [CO2CRC, 2012].
Information on other Australian capture and/or storage projects can be obtained from
the CO2CRC [CO2CRC, 2012].
These examples of successful CCS projects demonstrate that CO2 storage in geological
formations is technically and potentially economically feasible.
1.3 CO2 STORAGE IN COAL SEAMS
1.3.1 CBM IN AUSTRALIA
Coalbed methane (CBM) was first identified as a major hazard to mining operations
before it came to be utilised for energy generation. The first modern commercial
production of gas from coal seams began in 1977 in the San Juan Basin, USA. In
Australia the first commercial CBM production occurred in 1996 at Dawson River in
the Bowen Basin in Queensland. Since then, CBM in Australia has come a long way; in
2011 production in Queensland totalled 234 PJ with proven and probable (2P) reserves
of 33,001 PJ [GA, 2012]. The vast CBM resources imply a considerable CO2 storage
capacity and thus make CO2-ECBM an attractive storage alternative in Australia and in
particular, Queensland.
5
1.3.2 ENHANCED COALBED METHANE RECOVERY (ECBM)
Injection of CO2 into unmineable coal seams is widely considered a promising strategy
to enhance coalbed methane production. Applying conventional pressure depletion
methods to recover methane (CH4) from coal reservoirs, only about 20% – 60% of gas
in place (GIP) is generally estimated to be recoverable economically from a coal seam
[Stevens et al., 1998; Gale and Freund, 2001]. Enhanced recovery methods accelerate
gas recovery through pressure maintenance and can potentially provide a more complete
sweep of the reservoir as CO2 preferentially adsorbs onto the coal surface where it
displaces CH4. More importantly, however, storage of CO2 in coal seams represents a
GHG mitigation strategy.
The concept of enhanced coalbed methane recovery (ECBM) through the injection of
CO2 was first introduced by Every and Dell’Osso in 1972 who discovered that CH4 was
effectively removed from crushed coal by flowing a stream of CO2 at ambient
temperature through the coal [Every and Dell’Osso, 1972]. The idea of sequestering
CO2 in coal seams was first proposed in 1991 by Gunter et al. [1997].
Enhanced coalbed methane recovery through CO2 injection is referred to as CO2–

ECBM. When only the incremental aspects caused directly by the injection of CO2 are
of interest, the term “Storage with incremental CBM recovery”, or in short Storage-
ICBM, is used in this thesis. This is further described in Chapters 2 and 4.
1.4 RESEARCH OBJECTIVE & THESIS OUTLINE

This thesis investigates the feasibility of CO2 storage in coal in an Australian and a
more general context. The objective of this thesis is the identification of screening
criteria for economic CO2 storage with incremental CBM recovery through:
development of a methodology that integrates reservoir simulation with

economic modelling to assess the economics of CO2 storage;
identification of the reservoir properties the economics of CO2 storage are most
sensitive to;
development of preliminary operating guidelines for best practice CO2-ECBM
as a function of reservoir properties and economic conditions;
6
probabilistic analysis incorporating uncertainty in reservoir properties and
economic paramaters to establish the conditions that provide CO2 storage in coal
with the highest possibility of economic success.
The literature review presented in the following chapter (Chapter 2) will introduce the
background relevant to this thesis. It includes a description of the flow processes in the
coal reservoir, the behaviour of the coal during these processes, and primary and
enhanced gas recovery processes. An overview of the work conducted in the field of
ECBM economics is also provided and relevant research gaps are highlighted.
Chapter 3 and 4 describe the methodology developed and applied in this thesis by
means of a case study of CO2 injection at the Spring Gully CBM prospect in the Bowen
Basin, Queensland, Australia. Chapter 3 introduces the methodology applied for
performing reservoir simulation studies, whereas Chapter 4 details the methodology
developed to assess the incremental economics of CO2-ECBM. A sensitivity study
assesses how the economics of CO2 injection and storage at Spring Gully are impacted
by changes in the reservoir properties permeability, gas content, gas saturation, and CO2
adsorption capacity. This is presented in Chapter 5.
In Chapter 6 screening criteria for economic Storage-ICBM are identified and

preliminary operating guidelines for Storage-ICBM are established as a function of
reservoir properties and economic conditions. For this, the methodology is extended to
enable assessment of the potential profitability of Storage-ICBM which means CO2-
ECBM has to be compared to the most economic primary recovery scenario. The
findings from the sensitivity study (Chapter 5) are used to construct reservoir models of
specific property combinations and determine the operational design best suited for
these combinations under given economic conditions.
Chapter 7 addresses the high degree of uncertainty associated with reservoir properties
and economic parameters. Stochastic treatment of the key uncertain variables is
integrated into both reservoir simulation and economic modelling to assess the
incremental economics of CO2-ECBM. This allows the identification of critical
parameters for CO2 storage, the establishment of conditions that provide Storage-ICBM
with the highest probability of economic success, and the quantification of economic
risk.
The conclusions of this thesis and scope for future work are presented in Chapter 8.
7
2 LITERATURE REVIEW - CO2 STORAGE IN COAL
WITH ENHANCED COALBED METHANE
RECOVERY
Coal’s methane gas storage potential was initially recognised as a result of the hazard
the gas posed during coal mining operations. Since then coalbed methane (CBM)
recovery has come a long way and constitutes a mature industry in many coal basins in
the United States. In Australia the industry is still growing at a significant rate as the gas
resources are considerable, particularly in Queensland’s Bowen Basin. However, in
contrast to conventional reservoirs, coal reservoirs exhibit some unique characteristics
which make gas recovery, and consequently also gas injection, more complex.
The most important characteristics of coal reservoirs are their gas storage mechanism,
the fact that each coal is unique as a result of its burial history and its geological setting,
the unique mechanical properties of coal, and the coal’s natural fracture system
[Schraufnagel and Schafer, 1996]. This chapter provides a description of these
characteristics while also discussing the gas recovery processes (including enhanced
recovery), the CO2 storage potential of coal seams, and the technical feasibility of CO2-
ECBM as demonstrated in pilot projects. The chapter concludes with an outline of the
different approaches to assessing the economics of CO2 storage in coal seams, an
overview of its financial feasibility, and a summary of current research gaps.
2.1 ORIGINS OF COAL SEAM GAS

Coal is the result of the alteration of vegetation in a specialised environment under
certain conditions [Thomas, 2002]. The process by which coal is generated is termed
coalification, a biochemical process followed by a geochemical or metamorphic phase
during which organic and trapped mineral (inorganic) matter undergo several stages of
transformation [Thomas, 2002]. During the biochemical stage (diagenesis) buried
organic matter is turned into peat under the influence of bacterial activity, pressure,
temperature, and time. Carbon-rich components and the volatile content of the organic
matter are little affected during this stage, but the moisture content decreases and the
calorific value increases. During the geochemical or metamorphic stage the carbon
8
content in the coal increases and the levels of oxygen and hydrogen are reduced.
Products of such coalification processes are methane (CH4), carbon dioxide (CO2), and
water. With rising level of coalification the methane / carbon ratio increases and more
water is lost. The degree of coalification is governed by its burial and subsequent
tectonic history and determines the rank of the coal – the greater the level of
transformation the higher the coal’s rank and its carbon content [Thomas, 2002]. Lignite
is the lowest coal rank and corresponds to a carbon content of approximately 70%. Sub-
bituminous and bituminous coals generally exhibit a carbon content of 80% - 90% and
anthracite coals have a carbon content in excess of 90% The process of coalification
results in coalbeds that are generally naturally fractured, have low reservoir pressure,
low permeability, and are water saturated [Gunter et al., 1997].
Aside from coal rank, other principal coal properties include coal seam thickness, lateral
continuity, maceral (organic matter) content, and quality [Thomas, 2002]. These
properties are determined by the mire in which the peat is originally formed, including
the type of mire, types of vegetation, growth rate, degree of humification, base-level
changes, and rate of sediment input. Variations in the environment where the deposition
occurs strongly affect the coal in its quality and thus also the coal gas. Coalbed gas
consists of C1 to C4 hydrocarbons in variable proportions, CO2, and occasionally small
percentages of N2, O2, H2, and He. In most cases CH4 is the dominant component in
high-volatile bituminous and higher rank coals, with minor amounts of higher molecular
weight hydrocarbons (C2+) and CO2.
The original gas in place (OGIP) is generally estimated volumetrically after King [1993]
using Eq. (2.1). Coalbed gas volume is reported at standard temperature and pressure
(using the Society of Petroleum Engineers (SPE) standard conditions of 15.6°C and
100.1 kPa) in volume of gas per unit mass of coal.
 φ f (1 − S wfi ) 
Gi = Ah  + Cgi ρc  (2.1)
 Bgi 
Usually data on coal bearing formations is limited to those of economic interest. In such
cases the data has to be extrapolated across the region or basin in order to estimate the
gas content. Kelefant and Boyer [1988] derived a relationship of gas content vs. coal
seam depth for various coal ranks based on limited gas content measurements (61) for
the 7,800 km2 study area in the Central Appalachian Basin. Similar extrapolation
9
techniques have been proposed by other researchers [Rightmire, 1984; Zuber, 1996;
Saghafi, 2008].
2.2 THEORY OF GAS MIGRATION IN COAL
2.2.1 THE NATURE OF COAL POROSITY
Coal is a porous rock. The term porosity describes the fraction of void volume in a
material. It is defined as the ratio of void volume to bulk volume as in Eq. (2.2).
VV
φ= (2.2)
VB
Within a coal reservoir, porosity is distinguished between fracture (primary porosity)

and matrix porosity (secondary porosity). This concept of dual porosity was first
introduced by Warren and Root [1963] while studying naturally fractured reservoirs.
Fracture porosity in coal is primarily associated with the cleat system, although the
presence of larger scale discontinuities such as fractures, joints, and faults can also
make a significant contribution [White et al., 2005]. The cleat system in a coal seam is
made up of closely spaced fractures which were formed during coalification. They can
be further categorised according to their orientation into face and butt cleats. As
highlighted in Figure 2.1, face cleats are the longer, more continuous fractures, whereas
butt cleats run perpendicular to the face cleats and are noticeably shorter.
10
Matrix blocks
with micro-pores Butt cleats
Face
cleats
Figure 2.1: Schematic of face and butt cleats modifiedfrom Remner et al. [1984].
The porosity of the coal matrix is made up of micro-pores (as indicated in Figure 2.1),
which can range from as low as 8 – 20 Å in size, and meso- and macro-pores [IUPAC,
1972]. As a result of the large number of micro-pores, the coal matrix exhibits a large
internal surface area. This is one of the most important factors controlling the quantity
of gas stored in coal and thus, the coal matrix contains the vast majority of coalbed gas
(approximately 98% [Gray, 1987]). The gas is stored in an adsorbed state on the coal
surface and the volumes can be significant. For example, a water saturated coal
reservoir with a gas content of 10.6 m3/t has the same gas in place as a conventional
sandstone reservoir at 2,760 kPa with 51% effective gas porosity, and the same gas in
place as a conventional sanstone reservoir at 11,000 kPa with 13% effective gas
porosity [Zuber, 1996]. The significant storage capacity of coal reservoirs at low to
medium pressures is highlighted in Figure 2.2 which presents a comparison of gas in
place for both a coal seam and a conventional gas reservoir of similar thickness and
drainage area.
The volume of gas stored within the coal fracture system is limited due to its small
contribution towards the total bulk volume of the seam – less than 2% [Shi and
Durucan, 2003]. Within the fracture system gas is present in a free state and if the seam
is gas undersaturated, the cleats will initially be filled with water. Thus, because of its
function as a water storage site, cleat porosity in part determines the volumes of water
11
that will be produced from the seam. The quantity of gas dissolved in water in coal
reservoirs is typically assumed to be negligible compared to that adsorbed.
4
Coal Gas porosity = 30%
Gas Sands
3 Reservoir properties Gas porosity = 20%

Area: 160 acre, Net pay: 10 ft
Coal properties
Gas in Place, BCF
Ash content: 0%
Langmuir volume: 735 scf/ton
2 Langmuir pressure: 310 psia
Gas porosity = 10%
0
0 500 1000 1500 2000 2500
Pressure, psia
Figure 2.2: Comparison of gas in place for a coal seam and a conventional gas reservoir (gas sand)
as a function of pressure modified from Zuber [1996].
The total porosity of a coal can be readily measured, however, the bulk fluid flow in the
coal seam occurs through the fracture porosity which is difficult to determine
experimentally. It is generally estimated through history matching of fluid flow rates
and well pressure data. The ease of fluid flow is governed by the characteristics of the
fracture system; how well the fracture system is developed and connected, and the cleat
aperture [Clarkson and Bustin, 1997].
2.2.2 GAS STORAGE IN COAL
Gas sorption models

Gas is stored in coal primarily by adsorption, even though free gas may also be present
in the coal seam. It is thought that most adsorption occurs in the micro-pores [Moore,
2012]. The adsorption process can be subcategorized according to its mechanism into
physical adsorption on the coal’s internal surface; absorption within the molecular
12
structure; and adsorption in the pores [Juntgen and Karweil, 1966]. Physical adsorption
is the most important mechanism for gas storage in coal.
The quantity of gas adsorbed is a function of pressure and temperature and is defined by
the sorption isotherm which is a coal specific property. Isotherms represent the
thermodynamic limit of how much of a gas species can be theoretically stored in a coal
seam at a particular (constant) temperature as a function of reservoir pressure [Moore,
2012]. This implies that with increasing depth to coal and the associated increase in
reservoir pressure the gas content of coal generally increases. An overview of methods
for determining gas sorption and the associated uncertainties has been provided by
Busch and Gensterblum [2011].
The adsorption of gases on coal is believed to be reversible in nature [Krooss et al.,

2002], though studies have found that hysteresis behaviour between adsorption and
desorption cycles exists [Busch et al., 2003; Ozdemir et al., 2004; Harpalani et al.,
2006]. The divergence of the desorption isotherm from the adsorption isotherm is
thought to be the result of two effects; 1) changes in the adsorbents properties /
structures and capillary condensation in the adsorbent micro-pores [Gregg and Sing,
1982]; and 2) changes in moisture content during adsorption / desorption processes
[Harpalani et al., 2006]. Water present in the coal has a significant effect on gas
adsorption capacity as it decreases with increasing moisture content. However, most
isotherms are recorded on dry coals thus not representing reservoir conditions [Busch
and Gensterblum, 2011].
The International Union of Pure and Applied Chemistry (IUPAC) classifies six different
sorption isotherms that describe the majority of the cases of physical adsorption
[IUPAC, 1972]. These are presented in Figure 2.3. The isotherms describing natural gas
adsorption on coal are generally interpreted as Type I isotherms. They are produced
when a monolayer of molecules is adsorbed onto a nonporous solid, or when the
adsorption is dominated by a micro-pore filling process [IUPAC, 1972]. Gas molecules
can be held on the coal surface via weak intermolecular van der Waals interactions
between coal and gas or they can be retained as trapped molecules within the molecular
sieve-like pore structure of coal.
13
I II III
Specific amount adsorbed n
IV V VI
Relative pressure p/p0
Figure 2.3: Six types of adsorption isotherms modified from Sing et al. [1985]. Type I is the
Langmuir isotherm.
A popular isotherm model for coal seam gas adsorption is the Langmuir monolayer
model. In the monolayer model each adsorption site can only hold one molecule. All
sites are energetically equivalent and there is no interaction between molecules
adsorbed on neighbouring sites [Langmuir, 1918]. At saturation pressure all the
available sites for adsorption are occupied by the gas molecules so that no more gas can
adsorb onto the coal. The volume of gas adsorbed at saturation pressure is termed
Langmuir volume. The Langmuir isotherm can be described by Eq. (2.3).
V n bP
= = (2.3)
VL n0 1 + bP
When the adsorbed volume is half of the Langmuir volume, the associated pressure is
defined as Langmuir pressure. The Langmuir pressure is the inverse of the equilibrium
constant b so that the above equation can also be expressed as
V n P
= = . (2.4)
V L n0 1 + PL
Brunauer, Emmett and Teller (BET) [1938] provided an extension of the monolayer
Langmuir model. They assumed a multilayer adsorption model in which each adsorbed
molecule serves as an adsorption site for another molecule. The BET model is not
applicable to supercritical fluids (high pressures) and is defined as
14
n0Ch  P 
n=  P0  . (2.5)
  P     
1 −  P   1 + ( Ch − 1)  P  
P
  0    0 
Aranovich and Donohue [1995] and Gil and Grange [1996] found that the application of
the Langmuir model is not appropriate for micro-porous adsorbents for which the pore
sizes are only a few molecules wide. In this case the adsorption mechanism can be
better explained by a pore filling mechanism rather than by a surface coverage process.
This process can be described by Dubinin’s pore filling theory [Dubinin, 1966]. The
most commonly applied version is the Dubinin-Astakhov (D-A) equation.
j
 
n = n0 ⋅ exp  −CDu ⋅ ln  0  
P
(2.6)
  P 
A special form of the D-A equation is the Dubinin-Radushkovich (D-R) equation in

which j = 2.
Several researchers have tested the above models to verify their accuracy and
applicability with respect to CH4 and CO2 sorption on coal. Clarkson et al. [1997]
investigated the application of the Langmuir, BET, D-A, and D-R models to high
temperature / high pressure sorption of CH4. The best fit for the CH4 isotherm was
obtained using the D-A model. However, Harpalani et al. [2006] found that for
supercritical / high pressure methane the BET, Langmuir and D-A models performed
equally satisfactory within comparable accuracy. Though, with respect to CO2 sorption
for pressures up to 900 psi (~ 6.2 MPa) the D-A equation outperformed the BET and
Langmuir models.
To predict changes in gas composition during enhanced recovery processes multi-

component sorption models are necessary. During ECBM the adsorbed gas composition
and the free gas composition are not the same [Arri et al., 1992; Scott, 1993] and both
continuously change until eventually equilibrium is reached and no more molecular
exchange occurs. A popular model used to predict this sorption behaviour is the
extended Langmuir model (ELM) [Ruthven, 1984; Yang, 1987] presented in Eq. (2.7)
which can be applied to binary or higher order gas mixtures.
15
VL yi P
PL ,i
Vi = n
(2.7)
1+ ∑ y j P
j =1
PL , j
The ELM uses pure component isotherm data to forecast the adsorption of multi-
component gases. It is a non-iterative approach and thus provides a pressure-explicit
calculation [Jessen et al., 2007]. However, the ELM is thermodynamically incorrect
when the Langmuir volume VL is not the same for each component [Do, 1998] and the
error increases with increasing differences in the individual Langmuir volumes of the
gas mixture [Pan and Connell, 2009]. While Clarkson and Bustin [2000], Tang et al.
[2005], Jessen et al. [2007], and Connell et al. [2011a] found that the ELM yields a
good approximation of binary mixture sorption behaviour, Jessen et al., Tang et al., and
Connell et al. also demonstrated that for higher order mixtures the ELM failed to
reproduce the experimental observations.
Other models using single component data to predict multi-component sorption are the
Ideal Adsorbed Solution (IAS), the Loading Ratio Correlation (LRC), and the Zhou-
Gasem-Robinson-Equation-of-State (ZGR-EOS). The IAS theory is an adsorption
analogue of Raoult’s law in vapour-liquid equlibria. It assumes that the adsorbed
mixture behaves like an ideal adsorbed solution [Myers and Prausnitz, 1965] so that all
the activity coefficients for the adsorbed phase are unity. However, the IAS is valid for
mixed gas adsorption only and requires a pure sorption model such as BET, Langmuir,
D-A, or D-R. Therefore, the IAS model is strongly dependent on the choice of the single
component model as inaccuracies in the pure gas sorption model will affect the mixed
gas adsorption prediction [Clarkson and Bustin, 2000].
Clarkson and Bustin [2000] demonstrated that the IAS and the extended Langmuir
model showed significant differences when applied to the same binary gas mixtures.
They reported a superior performance of the IAS in combination with the D-A equation
over the ELM when predicting mixed gas desorption isotherms. They also noted that the
accuracy of the IAS predictions were strongly dependent upon the choice of pure gas
isotherm equation. The drawback of the D-A and D-R pure gas sorption models
(including the Simplified Local Density model [Fitzgerald et al., 2003]) is that they
require numerical integration in the adsorption calculation which has to be calculated at
every time step during the reservoir simulation and thus is computationally very
16
expensive [Pan and Connell, 2009]. Reeves et al. [2005] investigated the accuracy of the
LRC and the ZGR-EOS for which the results also proved unreliable.
The results of multi-component modelling studies indicate that single component

isotherms are often not sufficient to accurately predict sorption of gas mixtures in the
coal seam. This is because the gases are not independent of each other, but compete for
the same adsorption sites [Arri et al., 1992]. Clarkson and Bustin [2000] recommended
the establishment of multi-component sorption isotherms to increase the precision of the
forecasted adsorbed gas content during and at the end of production. This approach is
employed in the 2-D EOS (Equation Of State), which allows the use of binary mixture
data to optimise model parameters for calculations of multi-component gas sorption
[DeGance, 1992; Zhou et al. 1993a, 1993b, 1994; Hall, 1994; Pan and Connell, 2009].
The 2-D EOS is attractive as its application is analogous to the traditional 3-D EOS
commonly used to model vapour-liquid equilibrium. Different researchers have
achieved results of varying success using the 2-D EOS. DeGance [1992] demonstrated
that the EOS models can represent mixed gas adsorption with reasonable accuracy,
while Zhou et al. (1994) demonstrated the superiority of the EOS. Hall et al. [1994]
found that the IAS and the 2-D EOS were sufficiently accurate for most practical
applications and performed superior to the ELM. Pan and Connell [2009] also found
that that the 2-D EOS provided greater accuracy in representing adsorption behaviour in
comparison to the IAS and the ELM which meant that when applied to reservoir
simulation the three models yielded significant differences in key simulation results.
Others [Danner and Choi, 1978; Suwanayuen and Danner, 1980] have reported
unfavourable results using the 2-D EOS.
The summary shows there is no model that has been demonstrated to predict multi-
component sorption accurately while still being computationally manageable.
Furthermore, if no binary mixture data is available, which it generally is not, the
application of the 2-D EOS becomes impossible. Thus, the ELM and the IAS in
combination with Langmuir are still the most commonly used models to predict multi-
component sorption due to their ability to predict multi-component behaviour from
single component isotherms and the comparatively low computational requirements as a
result of their explicit nature.
In this thesis, the ELM is used to present the binary gas mixture of CH4 and CO2. Based
on the results presented by Clarkson and Bustin [2000], Tang et al. [2005], Jessen et al.
17
[2007], and Connell et al. [2011a] modelling of binary mixtures using the ELM is
expected to be a good approximation of actual sorption behaviour.
Preferential sorption
How much gas a coal can adsorb depends on the gas species (for example CH4, CO2, or
N2) that is to be adsorbed and the coal itself. The sorptive capacity of a coal is affected
by its rank, maceral content, ash content, and moisture content, as well as by the in-situ
pressure and temperature [Pashin and McIntyre, 2003]. Rank is determined by the
vitrinite content (measured by vitrinite reflectance) of the coal. Due to the differences in
original vegetation and burial history all coals are different. Hence, each coal will show
different, albeit similar, sorption behaviour and capacities towards the same molecule.
Usually, coal will preferentially adsorb CO2 over CH4 and CH4 over N2 so that for the
same pressure and temperature the same coal will store more CO2 than CH4 and more
CH4 than N2. This is indicated in Figure 2.4 which presents CO2, CH4, and N2 sorption
isotherms for Fruitland coals, San Juan Basin. However, the actual gas volumes and
sorption ratios will vary from coal to coal. The higher affinity of coal towards CO2 is
primarily due to the smaller size of the CO2 molecule compared to the CH4 molecule
[Ciu et al., 2004], but the strong polarity of CO2 and the electrostatic forces may also
contribute considerably to the stronger gas sorption [Gregg and Sing, 1967].
1000
900 CO2
Gas Content in SCF/ton of dry coal
800
700
600
500
CH 4
400
300
N2
200
100
0
0 300 600 900 1200 1500 1800
Pressure in psia
Figure 2.4: CO2, CH4, and N2 sorption isotherms for Fruitland coals, San Juan Basin modified from
Arri et al. [1992] with modifications by White et al. [2005].
18
Laboratory experiments have found that medium to high rank coals can generally
adsorb approximately twice as much CO2 as CH4 by volume [Puri and Yee, 1990].
Hence, for rough calculations it is often assumed that for higher rank coals two moles of
CO2 can be stored for every mole of CH4 desorbed [Gunter et al., 1997; Gentzis, 2000].
This ratio could be larger in coal seams at depths greater than 800 m where CO2
changes to supercritical state [Hall et al., 1994]. For sub-bituminous and brown coals it
was found that the CO2:CH4 ratio can even exceed a ratio of 10:1 [Faiz et al., 2007].
While relationships between sorption ratios and coal rank have been established, based
on Bustin and Clarkson’s [1998] work that analysed a variety of coals from different
basins, with respect to CH4 no explicit relationship between coal rank or composition
and sorption capacity could be identified that applied to all coals. Similar findings were
presented by Moffat and Weale [1955]. Reeves et al. [2005], however, did observe a
reasonable correlation between coal rank and CH4 Langmuir volume in their study
analysing coal samples from nine North American basins. They could not confirm the
same for the CO2 storage capacity, though.
Coal seam gas saturation

Adsorption isotherms can be used to determine whether a coal seam is saturated or
undersaturated with gas by comparing the maximum theoretical gas content with the
coal’s actual gas content for a given pressure [Clarkson and Bustin, 2011; Seidle,
2011a]. The degree of gas saturation plays an important role in gas production
behaviour. If a coal seam is fully gas saturated, i.e. the initial gas content at reservoir
pressure is the thermodynamic maximum (the initial gas content at reservoir pressure
lies on the isotherm), both gas and water are produced immediately upon
depressurization as reservoir pressure and desorption pressure are identical. However, it
is often the case that the initial reservoir gas content is less than what the coals could
potentially store (the initial gas content at reservoir pressure lies below the isotherm). In
this case the seam is undersaturated with respect to gas and pumping of reservoir water
is necessary to lower the pressure so that gas will start to desorb [Zuber, 1996]. This is
highlighted in Figure 2.5 where at the initial reservoir pressure of 6,000 kPa the coal has
a maximum CH4 storage capacity of approximately 18 m3/t. However, the initial coal
19
gas content is only 12 m3/t. Based on the sorption isotherm, the corresponding
desorption pressure is approximately 2,300 kPa. Thus, to initiate gas flow, pressure
drawdown from 6,000 kPa to 2,300 kPa has to occur. This period of dewatering can be a
deciding factor over the economic feasibility of a project [Seidle, 2011a]. During this
time the cash flow is negative, no revenues are obtained. The longer it continues the
higher are the costs. Thus, it is important to assess the degree of coal seam saturation
and its impact on production characteristics. A serious issue arises when there is
communication between the coal seam and the ground water source. A groundwater
aquifer with groundwater inflow can inhibit the drawdown of the coal seam reservoir
pressure and thus gas desorption.
20
Max. theoretical gas content
18
16
Gas content, m /t
14 Initial gas
3
content
12
10
Required pressure
8 drawdown
6
4 Initial
Desorption reservoir
2 pressure pressure
0
0 1000 2000 3000 4000 5000 6000 7000 8000
Pressure, kPa
Figure 2.5: Sorption isotherm highlighting the impact of undersaturated coals on pressure
drawdown.
The saturation level of a coal seam can be determined using Eq. (2.8) by comparing the
initial gas content to the theoretical maximum.
 V 
SG =   (2.8)
 V100%  PRe s
20
The desorption pressure corresponding to the initial gas content can be determined from
the sorption isotherm as demonstrated in Figure 2.5 or can be calculated using Eq. (2.9).
PL ⋅ V
PD = (2.9)
VL − V
2.2.3 FLUID TRANSPORT IN COAL
Within a coal seam, gas transport occurs by a two-stage process [Cervik, 1967a] as
indicated in Figure 2.6. Gas production from a coal seam requires an initial pressure
reduction within the seam [Rice et al., 1993] which is achieved by dewatering of the
reservoir. The pressure drawdown leads gas to desorb from the coal. This process
results in a pressure gradient between the wellbore and the reservoir acting as the
driving force for gas flow through the reservoir. The resulting concentration differential
between coal matrix and cleats leads to gas diffusion (Figure 2.6). Diffusion is a
concentration driven process during which flow occurs via random molecular motion
from an area of high concentration to an area of lower concentration. Diffusion in coal
is a combination of Knudsen diffusion, bulk diffusion and surface diffusion, depending
on the coal structure and pressure [Smith and Williams, 1984]. Matrix diffusion follows
the Fickian law which is written as
dC 1
= − ( C − CE ) , (2.10)
dt τ
in which dC / dt is the concentration gradient that drives the diffusion between cleats
and coal matrix, τ is the desorption time constant, C the concentration and CE the gas
concentration at the boundary between matrix and cleat system.
21
Sorption Diffusion Convection
Figure 2.6: Flow-mechanism of methane in coal seams modified from Remner et al. [1984].
In Eq. (10) the transfer of gas from the matrix to the cleat is described by a lumped
parameter, the desorption time constant τ. τ is defined by the diffusion coefficient Dc
and Warren and Root’s shape factor fs of the coal particle [Warren and Root, 1963]. It is
the time at which approximately 63% of the total gas content has desorbed from the
coal.
1
τ= (2.11)
Dc ⋅ f s
The value of the time constant characterises the gas exchange rate between the coal’s
micro-pores and its cleat system and is thus closely related to the coal’s cleat spacing.
For smaller values of τ the exchange of material between the micro-pores and the cleats
is fast and equilibrium between the micro-pores and the cleats is maintained more easily
during a production and/or injection process. When the time constant is large
equilibrium cannot be maintained [Smith et al., 2005].
Once in the cleats, gas can flow freely through the reservoir to the lower pressure area
around the wellbore. The flow in the natural fracture system can be modelled using
Darcy’s Law. With Darcy’s Law the flow rate for laminar fluid flow through a porous
medium is directly proportional to the pressure gradient within the reservoir where the
proportionality constant is known as the permeability k. For one dimensional single-
phase flow (in the x-direction) Darcy’s Law is written as
k  ∂p 
υ =−  + ρg  . (2.12)
µ  ∂x 
22
υ is the superficial flow velocity and the term in brackets combines the change in
pressure with respect to position with the potential energy due to gravity.
Eq. (2.12) describes that the flow rate is directly proportional to the pressure gradient.
The fluid velocity for flow around a well is expressed through
q q
υ= = . (2.13)
2π rh A
The material balance equation for a defined reservoir volume and flow in the x-direction
is written as
∂ ∂mɺ
( ρφ ) = − x . (2.14)
∂t ∂x
In combination with Darcy’s Law (Eq. (2.12) the material balance equation enables the
calculation of gas production as a function of time [Craft et al., 1991] as demonstrated
below. Since
mɺ x = ρυ x , (2.15)
Eq. (2.12) can be substituted into Eq. (2.15)
−k ρ  ∂p 
mɺ x =  + ρg  (2.16)
µ  ∂x 
and Eq. (2.16) can be substituted into Eq. (2.14) to yield
∂ ∂  k ρ ∂p 
( ρφ ) =  −  + ρ g   . (2.17)
∂t ∂x  µ  ∂x 
To apply Eq. (2.17) to reservoirs with a simultaneous flow of more than one fluid (such
as gas and water) the effective permeability ki of each flowing phase has to be
considered. The effective permeability is a function of saturation. To describe gas flow
Eq. (2.17) is written as
∂ ∂  k k ρ  ∂p g 
∂t
( φρ g S g ) = −  − g rg g
∂x  µg
 + ρ g g  . (2.18)
 ∂x  
By analogy, water flow is described by
∂ ∂  k k ρ ∂p 
(φρ w S w ) = −  − w rw w  w + ρ w g  . (2.19)
∂t ∂x  µ w  ∂x 
23
Permeability
Permeability is a lumped parameter that describes the ability of a formation to conduct
fluids. In Darcy’s Law it is the property that relates pressure drop and flow rate through
a reservoir [Zuber, 1996]. Permeability is considered to be a constant of the solid
independent of the fluid involved [King Hubbert, 1956]. It can be determined
experimentally by forcing a fluid of known viscosity through a rock core of known
length and area and measuring the pressure drop across the length of the core. Darcy’s
Law is then applied to solve for permeability.
In the petroleum industry the unit used for permeability is the Darcy. This is related to
SI units using the following factor:
1Darcy = 0.987 ⋅10 −3 cm 2 (2.20)
The permeability of a coal seam is determined by a range of factors including the cleat
size and interconnectivity as described in section 2.2.1. As the cleat system is the coal’s
macro-porosity, this means that porosity and permeability are often related by the
following empirical cubic relationship [Seidle et al., 1992; Palmer and Mansoori, 1998;
Shi and Durucan, 2004; Cui and Bustin, 2005]:
3
φ 
k = k0   (2.21)
 φ0 
The fracture permeability is often considered to be the permeability of a coal seam as

the coal matrix permeability is usually considered to be negligibly small in comparison
[Connell et al., 2010a]. Because of the heterogeneity of the fracture system,
permeability is a reservoir property that varies more than any other parameter. The
absolute permeability can vary considerably over short distances and also varies with
respect to direction, thus exhibiting anisotropy [Zuber, 1996]. This means that at any
given point in the reservoir permeability varies as a function of flow direction.
Generally, in reservoir simulation permeabilities are defined in three directions;
permeability in the x-direction kx, permeability in the y-direction ky, and permeability in
the z-direction kz, for which the x- and y-direction generally correspond to the direction
of the face and butt cleats respectively. The maximum permeability is found in the
direction of the face cleats, whereas the vertical permeability kz is often significantly
lower than the horizontal permeabilities [Mavor, 1996]. Identifying the direction of
highest permeability is important in determining the orientation of horizontal wells so
24
that recovery can be maximised. For radial flow in the horizontal direction towards a
well the average permeability can be estimated by applying Eq. (2.22) [Mavor, 1996].
ka = k x k y (2.22)
In addition to spatial variations in permeability due to heterogeneity, it also varies with

changes in effective stress caused by changes in reservoir pressure and as a result of
coal swelling or shrinkage [Gray, 1987; Seidle and Huitt, 1995; Levine 1996; Palmer
and Mansoori, 1998; Shi and Durucan, 2005]. In addition, the relative permeability of a
fluid is also affected by the changing water saturation of the coal during gas recovery
and/or gas injection.
Typically, well tests are conducted in an attempt to estimate reservoir permeability as it

is generally accepted that laboratory measurements on small core samples do not
provide an accurate indication of reservoir permeability. The differences between
reservoir and core sample permeability are predominantly caused by the fact that small
core samples do not adequately represent the natural fracture system within the
reservoir. Cleat spacing ranges from 10 - 25 mm for coals of 0.6% to 1.1% mean
vitrinite reflectance [Law, 1993] (which is representative of target coals for CBM
recovery [Massarotto et al. [2003]), so cores need to be large enough to accommodate
that. Additional factors include disturbances during sampling and other influences.
Pressure transient testing is considered the most reliable method for estimating in-situ
natural fracture system permeability as here a larger flow area is being investigated and
the permeability determined is representative of that area. However, permeability
measurements on large coal cubes (40 - 200 mm in length) by Massarotto et al. [2003]
demonstrated that for sufficiently large coal cores laboratory and field measurements
are generally within the same range.
Permeability as a function of effective stress

Permeability is a function of the effective stress applied to the coal. Effective stress is
defined as the difference between the total stress and the reservoir pore pressure [Gray,
1987]. It is influenced by three factors: the initial stress, changes in fluid pressure, and
the volumetric changes of the coal matrix [Gray, 1987]. Increases in effective stress will
25
decrease the cleat volume and thus reduce reservoir permeability [Gray 1987; Shi and
Durucan, 2005].
Seidle et al. [1992] presented a relation for permeability as a function of stress for which
cleat permeability varies exponentially with changes in the effective stress (Eq. (2.23)).
Eq. (2.23) is an empirical relationship and the basis for it is a matchstick model
representing an idealised coal reservoir. Here, flow occurs along the axis of the
matchsticks as demonstrated in Figure 2.7.
−3c f (σ −σ 0 )
k = k0 e (2.23)
σzz
σxx
σyy
Figure 2.7: Matchstick geometry representing a coal reservoir (modified from Seidle et al. [1992]).
Analogous to permeability, porosity also changes as a function of effective stress and

decreases when the pore pressure is lowered. The dependence of porosity on pore
pressure is reflected in the definition of pore volume compressibility given by Eq.
(2.24).
1  ∂φ 
cf = (2.24)
φ  ∂p 
The initial stress is a function of overburden pressure and initial pore pressure and thus
increases as a function of depth. As a consequence, permeability is expected to be lower
for deeper seams. Similarly, when fluid is produced from the reservoir the pore pressure
changes (decreases) and the reservoir experiences compaction due to an increase in
26
effective stress. As the overburden pressure remains unchanged during reservoir
depletion, it is the horizontal stress acting across the cleats that affects coal permeability
[Gray, 1987]. Volumetric changes of the coal matrix as result of gas adsorption and
desorption also contribute to the effective stress exerted onto the coal [Reucroft and
Patel, 1986; Reucroft and Sethuraman, 1987; Harpalani and Schraufnagel, 1990; Faiz et
al., 1992; Crosdale and Beamish, 1993; Seidle and Huitt, 1995]. Coal matrix volume
changes are commonly referred to as coal shrinkage and swelling. They are not equal in
all directions thereby showing anisotropy [Cody et al., 1988; Ceglarska-Stefanska and
Czaplinski, 1993]. When gas desorbs from the coal matrix the coal tends to shrink, thus
increasing the cleat volume and reservoir permeability. This matrix shrinkage effect
opposes the increase in effective stress that the reservoir experiences as a result of
pressure depletion [Gray, 1987]. Depending on the coal’s geomechanical properties,
these opposing effects can result in a permeability rebound [Harpalani and Schraufnagel
1990; Mavor and Vaughn 1998; Palmer and Mansoori 1998; Shi and Durucan, 2004;
Cui and Bustin 2005] as demonstrated in Figure 2.8. Figure 2.8 shows the results of
scale-up to the field in the San Juan Basin generated by Palmer and Mansoori [1998].
They found that permeability rebound depends mostly on the three parameters porosity,
Young’s modulus, and volumetric strain.
10
9 φ0 = 0.1
E = 1.24E5
8
7
6
φ0 = 0.5
k/k0
5
φ0 = 0.1 E = 1.24E5
4
E = 4.45E5
3
φ0 = 0.5
2 E = 4.45E5
1
0
0 500 1000 1500 2000 2500
Pressure, psi
Figure 2.8: Effect of pore pressure on coal permeability (for εl/β

β = 8 and po = 7,580 kPa) modified
from Palmer and Mansoori [1998].
27
In contrast to gas desorption, gas adsorption leads the coal to swell, thus closing the
cleat aperture and reducing reservoir permeability. Particularly the adsorption of CO2
can cause coal swelling [Reucroft and Patel, 1986; Reucroft and Sethuraman, 1987].
This is a result of the relationship between gas sorption capacity and volumetric changes
of the coal matrix. With increasing gas adsorbed, the degree of coal swelling also
increases as demonstrated in numerous experiments [Reucroft and Patel, 1986; Reucroft
and Sethuraman, 1987; Walker et al., 1988; Levine, 1996; Chikatamarla et al., 2004;
Robertson and Christiansen, 2005; Siriwardane et al., 2005; Mazumder et al., 2006; Day
et al., 2008, Pan et al., 2010]. At the same pressure, coals generally adsorb considerably
more CO2 than CH4 (see section 2.2.2 – Preferential sorption). Thus, for the same coal
the adsorption of CO2 results in higher swelling than the adsorption of CH4. However,
the degree of swelling varies for individual coals. Reucroft and Patel [1986] determined
CO2 induced swelling of coals of different rank at 0.15 MPa and measured maximum
volumetric swelling of approximately 1.3%. Reucroft and Sethuraman [1987] measured
swelling for the same coals at pressures up to 1.5 MPa and recorded maximum swelling
of 1.33% for bituminous coal and up to 4.18% for lignite. They also noted that swelling
increases with increasing pressure. This observation was confirmed by Walker et al.
[1988]. Walker et al. also noted that swelling was not fully reversible, but often more
than 50% of the volume increase was retained after CO2 desorption. Later work by
Levine [1996] suggested that coal swelling is elastic with no permanent deformation.
Robertson and Christiansen [2005] reported a linear strain of 2.1% for sub-bituminous
coals caused by CO2 adsorption at a pressure of 5.5 MPa, which was twice as much as
observed for the bituminous coal at the same pressure. CH4 induced swelling was
reported as 0.5% at 6.9 MPa. Mazumder et al. [2006] investigated coal swelling at
significantly higher pressures to simulate coal seam conditions. Linear strains of up to
0.6% were recorded in the direction of the bedding plane as a result of CO2 sorption.
Day et al. [2008] evaluated CO2 induced swelling on different Australian bituminous
coals and demonstrated that swelling increases as a function of pressure up to
approximately 8 to 10 MPa after which no further swelling was observed. The
maximum volumetric swelling recorded was between 1.7% and 1.9%. Swelling was
found to be completely reversible.
Volumetric strain ε can be modelled as either a function of adsorbed gas volume or gas
pressure. The relationship between gas sorption capacity and coal swelling is
28
approximately linear [Chikatamarla et al., 2004; Cui and Bustin, 2005; Cui et al., 2007].
This is highlighted in Figure 2.9 which shows measurements presented by Connell et al.
[2013] for the volumetric strain measured for five Bowen Basin core samples exposed
to N2, CH4, and CO2. The relationship can be described by Eq. (2.25).
ε V = ε gVg (2.25)
In which Vg can be determined by applying the rearranged Eq. (2.4).
VL P
Vg = (2.26)
P + PL
1.8
1.6
1.4
Volumetric strain, %
1.2
S1
1.0
S2
0.8
S3
0.6 A4
0.4 A5
0.2
0.0
0 10 20 30 40 50
Adsorbed gas content, m3/tonne
Figure 2.9: Volumetric strain approximated as a linear function of adsorbed gas content for
fivecoal core samples (modified from Connell et al. [2013]). The measurements have been corrected
with respect to effective stress.
Day et al. [2008] indicated that while coal swelling can be approximated by a linear
relationship, above certain pressures swelling is essentially complete. This is
highlighted in Figure 2.10 which shows data from Levine [1996] and Bustin [2004] in
comparison to Day et al.’s data. Data from Levine and Bustin are limited to 3 MPa and
5 MPa respectively and thus do not show the plateauing of the swelling strain as seen
for Day et al.’s data which measured strain up to 15 MPa. For the data presented in
Figure 2.10 the pressure above which swelling reaches a plateau is about 8 MPa.
However, the measured swelling includes compression from pore pressure which acts
29
against the swelling.This could be an explanation for the plateau in Day et al.’s
measurements. This is also indicated by results presented by Pan et al. [2010]. Pan et al.
measured swelling strain for pressures above 12 MPa, but corrected their results for
effective stress. They demonstrated continuous coal swelling beyond a pressure of 10
MPa.
2.5
2
Volumetric expansion, %
1.5
Bustin's data
Levine's data
1
Sample 1
Sample 3
0.5
0
0 20 40 60 80 100 120 140 160
Absolute Adsorption, kg/t
Figure 2.10: Volumetric swelling as a function of absolute adsorption. Sample 1 and 3 from Day et
al. [2008], other data from Levine [1996] and Bustin [2004] (modified from Day et al. [2008]).
More commonly, sorption strain is presented as a function of pressure in which case it

exhibits Langmuir-type curve behaviour as demonstrated in Figure 2.11. This has been
demonstrated experimentally by Harpalani and Chen [1997], Seidle and Huitt [1995],
Levine [1996], Cui and Bustin [2005], Day et al. [2008], Pan et al. [2010], Pan and
Connell [2011], and others. Such a relationship can be described by Eq. (2.27) for single
component sorption.
p
ε = ε∞ (2.27)
p + pε
For multi-component sorption the strain can be computed using Eq. (2.28) analogous to
the ELM described in section 2.2.2 – Gas sorption models:
30
pxk
pε k
ε k = ε ∞k (2.28)
n xj
1 + p∑
j =1 pε j
so that
n
ε = ∑εk . (2.29)
k =1
1.2
1
Volumetric strain ε v, %
0.8
0.6
εv = 7.4E-4 x Vg
Vg = VL x P/(PL+P)
0.4 VL = 17.7 cm3/g
P L = 7.2 MPa
0.2
0
0 5 10 15 20 25
Pressure, MPa
Figure 2.11: CH4 sorption strain as a function of pressure (modified from Cui and Bustin [2005]).
Gray [1987] was the first to present a coal permeability model that considers both the
effects of pore pressure changes and matrix shrinkage as demonstrated in Eq. (2.30).
The first term describes the stress as a response to pore pressure changes, the second
term describes the stress caused by changes in matrix strain which in this model is a
function of changes in the equivalent sorption pressure.
ν E  ∆ε s
σ −σ0 = ( p − p0 ) +   ∆ps (2.30)
1 −ν  1 −ν  ∆ps
Other models were presented by Harpalani and Zhao [1989], Sawyer et al. [1990],
Seidle et al. [1992], Seidle and Huitt [1995], Harpalani and Chen [1997], Palmer and
31
Mansoori [1998], Gilman and Beckie [2000], Shi and Durucan [2004, 2005], Cui and
Bustin [2005], Pan and Connell [2007], Palmer [2009], and Connell et al. [2010b] to
name a few. A comprehensive review of coal permeability modelling approaches has
been presented by Pan and Connell [2012] which also includes field and laboratory data
used to test the models.
Currently, the most commonly applied models are the Palmer-Mansoori (P&M) model
[1998] and the Shi-Durucan model [2004, 2005]. Both models were derived assuming
uniaxial strain and constant overburden or confining stress. The Palmer and Mansoori
(P&M) model is based on the cubic relationship between permeability and porosity (Eq.
(2.21)). However, due to the constant strain parameters εmax and Pε, the model implies
that the gas composition does not change, which means it is not adequate to represent
multi-component flow in coal reservoirs, but only primary recovery. The derivation is
presented elsewhere [Palmer and Mansoori, 1998]. M and K are related to Young’s
modulus Ε and Poisson’s ratio ν. Eq. (2.31) implies that shrinkage effects become more
significant at low pressures.
 p p0 
( p − p0 ) − 1 −  ε max 
1 K
φ − φ0 = −  (2.31)
M  M  p + pε p0 + pε 
The P&M model has since been extended by Mavor and Gunter [2006] to include multi-
component gas species, thus allowing the gas composition in the seam to change and
enable modelling of the enhanced recovery processes.
φ ( p − patm ) + 1 1 − K  ε − ε
= 1+ ( ) (2.32)
φatm φatm M φatm  M  atm
Shi and Durucan [2004, 2005] formulated a model for changes in the effective
horizontal stress during primary as well as enhanced recovery that links the volumetric
matrix strain to the amount of gas adsorbed. The volumetric matrix changes are
assumed to be proportional to the volume of adsorbed gas rather than to a change in the
equivalent sorption pressure as in Gray’s model [1987] (Eq. (2.30)). The derivation of
the model is described in [Shi and Durucan, 2005].
ν
α Sj (V j − V j 0 )
n
E
σ −σ0 = − ( p − p0 ) + ∑ (2.33)
1 −ν 3 (1 −ν ) j =1
32
The two terms on the right are referred to as the cleat compression and matrix shrinkage
terms respectively, which both increase with increasing Poisson’s ratio ν, but only the
matrix term is affected by changes in Young’s modulus Ε. The effective horizontal
stress is determined by the relative strength of these two opposing terms as cleat
compression is positive and matrix shrinkage is negative when the reservoir pressure p
starts to decrease from its initial level p0. The permeability can be determined using Eq.
(2.23).
The effect of relative permeability

Gas and water flow rates are proportional to their respective effective permeabilities ki.
The effective permeability can be calculated using Darcy’s Law when the fluid flow
rate and the corresponding pressure drop are known. Relative permeability kr,i is defined
as the effective permeability of one fluid relative to the absolute permeability k (the
permeability in single phase flow) as demonstrated in Eq. (2.34).
ki
k r ,i = (2.34)
k
Most coal seams are water saturated and thus, even when gas starts to desorb into the
cleat system, water is still produced alongside gas. As a consequence, two-phase flow
occurs in the cleat system. In this case the relative permeability relationship between gas
and water controls the flow of each phase in the reservoir. The relative permeability
relationship is described by the coal specific relative permeability curve. Relative
permeability curves demonstrate how the permeability to gas changes as a function of
water saturation until the residual water saturation is reached. Therefore, particularly in
the early stages of recovery when the reservoir is dewatered to reduce the pressure and
initiate gas flow, the effective permeability to gas is significantly affected by the shape
of the relative permeability curve. This is indicated in Figure 2.12 from Meaney and
Paterson [1996].
As relative permeability characteristics are a function of the cleat properties, it is

difficult to obtain representative samples and scaling effects are likely to complicate the
use of laboratory results for simulation purposes. Clarkson and Bustin [2011] noted that
despite the important control relative permeability has on CBM production, not many
laboratory measurements have been conducted in this field since the early 1990s. They
33
consider the lack to be a result of the difficulties in measuring relative permeability in
the laboratory and in obtaining and preserving samples.Meaney and Paterson [1996]
measured relative permeability curves in the laboratory and then derived the curves also
through history matching of production data. They found that substantial differences
existed between the laboratory measurements and the history matched data. They
attributed the deviations to the extremely heterogeneous nature of coal and the absence
of gravitational forces in the experiments [Meaney and Paterson, 1996]; reservoir
simulation considers viscous fingering and gas buoyancy effects which cannot be
represented in laboratory experiments [Seidle, 2011b]. Furthermore, relative
permeability characteristics are strongly influenced by stress conditions [Zuber, 1996]
which change during production and hence affect the relative permeability
characteristics..
1 1 1
0.8 0.8 0.8
0.6 A 0.6 B 0.6 C

Relative permeability, -
0.4 0.4 0.4
0.2 0.2 0.2
0 0 0
0 0.2 0.4 0.6 0.8 1 0 0.2 0.4 0.6 0.8 1 0 0.2 0.4 0.6 0.8 1
1 1 1
0.8 0.8 0.8
0.6 D 0.6 E 0.6 F

0.4 0.4 0.4
0.2 0.2 0.2
0 0 0
0 0.2 0.4 0.6 0.8 1 0 0.2 0.4 0.6 0.8 1 0 0.2 0.4 0.6 0.8 1
Water saturation, -
Figure 2.12: Relative permeability curves achieved through history matching of field production
(modified from Meaney and Paterson [1996]).
In the absence of laboratory measurements gas relative permeability can be

approximated by Eq. (2.35) [Brooks and Corey, 1964; Brooks and Corey, 1966].
( )
ng
krg = k gr 1 − S w* (2.35)
The relative permeability to water can be approximated by Eq. (2.36).
34
( )
nw
krw = S w* (2.36)
The exponent for gas ng is generally about 1.5 and for water (nw) about 3 [Mavor et al.,
1992]. The gas relative permeability coefficient k gr usually ranges from 0.63 - 0.9
[Mavor, 1996]. Eq. (2.35) and Eq. (2.36) are first approximations that can be used in
reservoir simulation studies in the absence of other data.
2.2.4 RESERVOIR SIMULATION
Reservoir simulation programmes are predominantly used to predict gas and water
recovery rates, but also to help understand the reservoir’s behaviour during recovery
and injection processes. Gas storage and flow in coal seams is more complex than in
conventional reservoirs. In conventional reservoirs gas is stored in the pore space while
in coal seams gas is present in an adsorbed state on the coal’s surface. Only through
partial pressure depletion can the methane be released from the coal matrix. The
desorbed gas diffuses from the matrix to the fracture system where its flow can be
described by Darcy’s Law. A non-equilibrium formulation in which sorption is pressure
and time dependent is required to account for the time lag incurred during gas diffusion
[Young, 1998]. The complexity of the processes makes modelling of gas recovery from
coal seams significantly more intricate than modelling fluid extraction from
conventional, non-adsorbing reservoirs. In addition to the usual set of simplified
equations describing reservoir flow (such as Darcy’s Law and material balances), a dual
porosity model is necessary to represent both transport mechanisms acting in coal
reservoirs; that is gas diffusion through the coal matrix (primary porosity) into the cleat
system (secondary porosity) as well as Darcy flow in the natural fractures. Furthermore,
with respect to enhanced recovery processes, a compositional simulator is required that
is capable of modelling flow behaviour of different gas components and the changes in
gas composition over time. Another requirement specific to coal reservoir simulators is
the ability to account for volumetric coal matrix changes as a result of gas sorption in
addition to conventional permeability-stress relationships. Auxiliary equations such as
those describing gas content as a function of reservoir pressure (i.e. the sorption
isotherm) are used alongside the flow equations [Paul, 1996].
35
Law et al. [2001] demonstrated that dual-porosity compositional simulators can provide
accurate estimates of primary coalbed methane production and also help in assessing the
influence of reservoir and project development parameters on production. The
compositional simulator is one of three different types of reservoir simulators with the
other two being the gas sorption and diffusion simulator and the black oil simulator,
which is the most common one. A detailed description of the differences between these
types of simulators can be found elsewhere [Paul, 1996]. Modelling of enhanced
recovery processes has proven to be more challenging than the prediction of the primary
production process; multi-component gas sorption and diffusion as well as sorption- and
stress-induced permeability changes have not been considered adequately in the past
[Wei et al., 2007]. However, recent history has seen improvements through the
application of bidisperse diffusion models and the addition of empirical equations
describing the change in coal properties over time as a result of coal matrix shrinkage
and swelling [Wei et al., 2007].
The reservoir models are constructed from a large number of blocks (“grid blocks”) and
can be Cartesian grids, radially symmetric, or unstructered. One of the advantages of
Cartesian grids is that they can contain many wells, whereas radial grids are limited to a
single well. A specific type of simulator exists that uses only a single block to represent
the reservoir; such simulations are called tank models. However, the advantage of using
many individual grid blocks is that it enables the simulator to more accurately track
fluid fronts and pressure gradients moving through the reservoir [Paul, 1996].
Additionally, it allows the assignment of specific properties to each individual grid
block or the same properties to a number of grid blocks. This functionality can be used
to describe regions exhibiting the same properties. During the simulation the equations
within the simulator are applied to each individual grid block and the solution is
computed for each finite time interval (i.e. time step). Thus, the larger the number of
grid blocks and the smaller the time steps, the more computationally expensive is the
simulation.
Reservoir simulation combines geology, petrophysics, reservoir engineering, and

production operations. Inputs for the simulator are geological and engineering data
describing the initial reservoir conditions. Young [1998] grouped the data requirements
into three categories; 1) reservoir description data (geometry, depth, thickness,
saturation, pressure); 2) PVT data (pressure, volume, temperature); and 3) time
36
dependent well data (flow rates, bottomhole pressure). The quality of the data, as well
as the definition of the initial conditions and the boundary conditions determines the
reliability of the simulation [Paul, 1996]. Ideally, time dependent well data is used to
match historic flow rates through tuning of individual reservoir properties (permeability,
desorption time constant, relative permeability curve, etc.). This process is commonly
referred to as history matching. The dataset obtained in this manner is then used to
forecast future well performance. However, in the early stages time dependent data is
not available. Furthermore, data acquisition is very expensive and thus generally the
data available to construct a reservoir model is limited. According to Young [1998], the
most important properties and thus the minimal data requirements for a reservoir
simulation study are permeability, gas content, isotherm data, and porosity.
Reservoir simulation programmes can be employed to evaluate the effect of different

well operating strategies or the effect of different well types and completion methods on
production performance. It takes the reservoir specific and the engineering specific
interactions into account. However, reservoir simulation on its own generally does not
allow judgement over the economic feasibility of a project or which project design is
preferable. Thus, a reservoir simulation study is often followed by an economic analysis
to determine the project’s financial viability.
The simulation package used in this thesis is SIMEDWin which was originally
developed by School of Petroleum Engineering, University of New South Wales with
further development by CSIRO. SIMEDWin is a compositional reservoir simulator
[Stevenson, 1997] which has the capability to model two-phase (water and gas) multi-
component (several gas species) flow in a dual or single porosity system. Furthermore,
SIMEDWin can incorporate coal shrinkage and swelling using the Shi-Durucan model
[Shi and Durucan, 2005]. Other features include history matching capabilities and
Monte Carlo simulation. Law et al. [2002, 2003] compared the performance of
SIMEDWin to a number of other commercial and non-commercial coalbed methane
simulators (CMG’s GEM, ARI’s COMET 2, Schlumberger’s ECLIPSE and BP’s
GCOMP). The results were found to be in good agreement, thus confirming the
suitability of SIMEDWin for this work.
37
2.3 GAS RECOVERY FROM COAL SEAMS
2.3.1 PRIMARY RECOVERY
Conventional gas reservoirs initially show high gas flow rates which often start to
decline almost immediately after production commenced. Production profiles of CBM
reservoirs differ from conventional gas plays in that initial gas flow is low, but rises
continuously until it peaks months or years after production first started [Moore, 2012].
A typical production profile of a CBM well is presented in Figure 2.13 [Zuber, 1996].
The primary recovery process can be divided into three distinct stages [Seidle, 1993].
The first stage is dewatering of the coal seam to decrease the reservoir pressure around
the wellbore and initiate gas flow. Here, the produced fluid is predominantly water and
only little gas, if any. During the first stage water flow is generally constant while the
gas rate can incline or decline depending on the relative permeability characteristics of
the reservoir. The end of the first stage is marked by the well reaching its minimum
bottomhole pressure (BHP).
Phase II Phase III

Production rate
Phase I
Gas
Well "dewatered"
Water
Time
Figure 2.13: Typical three stage coal well production profile (modified from Zuber [1996]).
The beginning of the second stage is characterised by a decline in water and an incline
in gas production rates (see Figure 2.13). During the second stage water relative
permeability decreases and gas relative permeability increases. Outer boundary effects
become significant and a pseudo steady state flow regime is reached. Gas desorption
rates increase as the reservoir pressure starts / continues to decrease throughout the
38
reservoir, resulting in increasing gas production rates. The second stage concludes when
the gas production rate experiences a maximum and water production becomes
negligible.
The third and final stage commences when the gas rate starts declining again. Pseudo
steady state flow exists - the decline in gas rate is relatively flat and continues for years,
the water production rate is low and often negligible, the relative permeabilities change
only little, if at all. It is during this stage that most of the gas is recovered.
2.3.2 PARAMETERS AFFECTING CBM RECOVERY
The rate at which a coal seam can be dewatered to achieve gas production, the
magnitude of the production rates, as well as the ultimate pressure drawdown are
controlled by the reservoir properties as well as the project development parameters.
The ultimate pressure drawdown presents the limit as to how much CBM is technically
recoverable. For example, using the isotherm in Figure 2.5 (section 2.2.2 – Coal seam
gas saturation) if pressure drawdown of 500 kPa could be achieved the remaining gas in
place would still be considerable at 4 m3/t. Thus, applying conventional pressure
depletion methods, significant quantities of gas generally remain in the reservoir.
The reservoir properties that determine flow in the reservoir and thus recovery rates are
reservoir permeability (determined by how well the cleat system is developed), the gas
in place (determines how much gas is theoretically available for recovery), the relative
permeability curves (determine the interactions between gas and water), as well as the
diffusion coefficient and the sorption isotherm (determine how easy / fast adsorbed gas
can be released) [Zuber, 1996]. Project development factors affecting gas recovery and
thus project economics include well type, well stimulation, and well spacing. The
choice of project development parameters is determined by the specific reservoir
properties. As a rule of thumb, low permeability reservoirs generally require horizontal
wells to recover gas volumes that are considered “commercial”. For high permeability
reservoirs stimulated vertical wells are often sufficient and present the better cost-
benefit option. However, in reality a reservoir simulation programme will be employed
to determine the best field development strategy for a given set of reservoir properties.
It allows reservoir properties and project development factors to be considered together
and evaluate the individual parameter’s effect on fluid recovery rates. The best
39
development strategy is generally defined as the one yielding the highest NPV for a
given budget or one yielding a good return on investment for a comparatively low
investment. This implies that to enable judgement over the most profitable field
development reservoir simulation has to be coupled with economic analysis.
An important issue with respect to coal seam gas recovery can arise when there is
communication between a coal seam and an aquifer. As CBM recovery relies on
substantial pressure depletion over a large areal extent (because of the non-linear nature
of isotherms reservoir pressure typically needs to be reduced by more than 75% of the
initial reservoir pressure to release more than 50% of the gas in place [Zuber, 1996])
continuous water influx from an adjacent aquifer could make dewatering and pressure
drawdown a considerable problem, if not impossible.
2.3.3 CBM WELLS
Wells drilled with the purpose of extracting coalbed methane are typically not as deep
as conventional gas wells and can generally be drilled using smaller rigs than those used
to drill conventional wells. They are significantly less cost intensive, making CBM
wells comparatively cheap [Leamon, 2006]. The simplest well types are vertical wells.
They can be drilled to intersect one or multiple coal seams [Clarkson and Bustin, 2011].
The well is then lined with a casing to avoid collapsing of the well or a decrease in well
diameter that would be detrimental with respect to gas flow rates. The well will only be
completed across the seams that are intended for production.
Horizontal (or slanted) wells are basically vertical wells with a horizontal bore hole that
extends through the seam. Analogous to vertical wells, horizontal wells can be drilled
into multiple seams and multiple horizontal bore holes can be drilled within the same
seam [Jenkins and Boyer, 2008]. Horizontal wells provide a much larger contact area
between well and reservoir. They can intersect the fractures and drain them more
effectively. The dewatering process is considerably accelerated and gas flow rates are
higher by multiples in comparison to vertical wells. While horizontal wells are more
expensive to drill than vertical wells, technological progress and advances in drilling
methods are continuously reducing horizontal well costs making them an increasingly
attractive option [Jenkins and Boyer, 2008]. The decision between vertical and
horizontal wells will be based on the project’s economics. As a rule of thumb,
40
horizontal wells are generally considered for low permeability reservoirs as flow rates
obtained using vertical wells would not be economic. Conversely, the flow rates
achieved with vertical wells for high permeability reservoirs are generally sufficient.
However, even in high permeability reservoirs the application of horizontal wells is
receiving more attention.
To improve gas recovery from vertical wells (and sometimes also horizontal wells),
well stimulation strategies are commonly applied. The objective of well stimulation is to
improve fluid flow around the wellbore. Stimulations can be openhole completions or
cavity completions, though hydraulic fractures are the most common form of
completions in coalbed methane reservoirs [Jenkins and Boyer, 2008; White et al.,
2005]. Clarkson and Bustin [2011] suggest that future CBM exploitation will require
advanced drilling and completion methods as to develop deeper, lower-quality CBM
reservoirs.
Cavity completion is an open-hole enlargement procedure which increases well

productivity by increasing the wellbore radius [White et al., 2005]. It is accomplished
by injecting water-air mixtures into the coal seam multiple times followed by rapid
depressurisation. This increases sloughing of the coal into the well-bore which in turn
increases the wellbore diameter. It was observed that in the San Juan Basin open-hole
cavitated wells clearly showed higher production rates than conventionally cased and
fractured wells [Stevens et al., 1996].
Hydraulic fracturing increases the contact area between reservoir and wellbore and thus
can considerably enhance gas recovery. The technology has been shown to improve
production rates in the eastern US by 5 to 20 times [White et al., 2005]. Hydraulic
fractures are created by applying hydraulic pressure with controlled injection of gelled
water [Elder and Deul, 1975]. The fracture is extended by continuous pumping of large
volumes of the treatment fluid. The size of the fracture is a function of the injection rate,
the treatment fluid volumes, its flow characteristics, and the strength of the formation.
Propping agents or “propants” are required to hold the fracture open permanently once
the hydraulic pressure treatment stops. Propants are sized particles, such as sieved sand,
that are added to the gelled fluid and remain in the fracture. The propped fracture
provides a highly permeable path to the borehole [Elder and Deul, 1975].
Similar to the choice of well type, the well spacing is a decision based on the project
economics. The tighter the spacing, the faster is the dewatering process and the more
41
gas is produced faster. However, more wells will be needed which affects the project’s
costs. In general, the lower the reservoir permeability, the more wells are needed to
extract gas in commercial quantities.
2.3.4 ENHANCED RECOVERY PROCESSES
Applying conventional pressure depletion methods to recover CH4 from coal reservoirs,
only about 20 – 60% of gas in place (GIP) are generally estimated to be recoverable
economically from a coal seam [Stevens et al., 1998; Gale and Freund, 2001] with the
production life spanning between 10 – 20 years [White et al., 2005]. Furthermore, the
typically low recovery rates imply that a large number of wells are required for gas
production which subsequently increases the cost of CBM projects. This has generated a
great interest in enhanced coalbed methane recovery (ECBM) technologies. Enhanced
recovery methods apply gas injection to enable more complete recovery of coal bed
methane gas [Every and Dell’Osso, 1977; Puri and Yee, 1990; Reeves and Oudinot,
2004; Reeves and Oudinot, 2005a; Mavor et al., 2004; Tang et al., 2005; Shi et al.,
2008; Connell et al., 2011a]. In addition, the continuous injection of gas allows a high
pressure differential between reservoir and production well to be sustained. The
injection of gas into a coal reservoir creates a partial pressure gradient between the coal
cleat system and the coal matrix. This leads the CH4 adsorbed on the coal matrix to
desorb while in exchange the injectant gas adsorbs onto the coal’s surface. As a
consequence, gas recovery rates are higher and the recovery process is accelerated.
Injectant gases commonly considered for ECBM are N2, CO2, and flue gas (N2/CO2
mixture). Current research focuses predominately on CO2 injection due to its potential
as a greenhouse gas mitigation strategy [Wolf et al., 2000; Mavor et al., 2004; Pagnier
et al., 2005; Reeves and Oudinot, 2005a; Sams et al., 2005]. However, the injection of
N2 [Stevenson et al., 1993, Reeves and Oudinot, 2004, 2005b] or flue gas [Wong et al.,
2000] has also received attention. The different reservoir responses caused by CO2 and
N2 (or flue gas) are illustrated in Figure 2.14 which compares a typical primary recovery
profile to typical enhanced production profiles.
42
Start of injection
Production rate
CO2
N2 or flue gas
Primary recovery
Time
Figure 2.14: Primary and enhanced CH4 recovery rates for a fully gas saturated coal reservoir
using CO2 and N2 (or flue gas) injection (modified from Gunter et al. [1997]).
The injection of N2 works in that it strips CH4 off the coal by lowering the CH4 partial
pressure in the seam. The total pressure within the reservoir is maintained or increased
[Puri and Stein, 1989; Puri and Yee, 1990], depending on the injection rate. As the
enhancement caused by N2 injection is not associated with adsorption, the response in
production is immediate. Due to the pressure maintenance and the resulting constant
high pressure differential recovery rates do not reduce but increase. Lake [1989]
estimated that without economic constrains up to 90% of gas in place can be produced
by this method from homogenous coal reservoirs.
In contrast, the CH4 production enhancement generated by the injection of CO2 requires
more time to develop than that achieved with N2. CO2 has strong sorption characteristics
(CO2 is adsorbed preferentially over CH4 – see section 2.2.2 – Preferential sorption) that
tend to retard the flow of CO2 through the reservoir [Zhu et al., 2003]; only after a
sufficient volume of CH4 has been displaced does the gas drive become effective and
CH4 productivity increases [White et al., 2005]. The strong sorption characteristics are
considered an advantage when CO2 storage is of interest [Zhu et al., 2003].
The fast production response generated by N2 and the slow migration of CO2 have
drawn interest to the injection of flue gases (consisting of N2 and CO2) into coal seams
as a means of enhancing CH4 recovery. As N2 exhibits a significantly lower affinity
towards coal than CO2 (see section 2.2.2 - Preferential sorption) for the same reservoir
43
N2 breakthrough at the production well occurs notably faster than CO2 breakthrough
[Gunter et al., 1999]. Thus, the expected advantages of flue gas injection are a delay in
N2 breakthrough at the production well and an increased production enhancement
compared to the injection of CO2 alone. This process is thought to be the most economic
out of all three in an environment where there are no incentives for CO2 sequestration
[Gale and Freund, 2001].
After injectant gas breakthrough at the production well, gas production can still
continue as long as the processing of the produced gas that is contaminated with
injectant gas is still economically viable or the produced gas is used in an application
that does not require high methane content specifications (e.g. gas engines for electricity
generation). Thus, the abandonment concentration of the injectant in the produced gas
will vary for each project.
For undersaturated seams at the beginning of gas injection a decline in gas production
rate can be observed caused by relative permeability effects. The injected gas displaces
the mobile water in the coal seam towards the production well which reduces the gas
relative permeability around the well. When the majority of the water is produced, gas
relative permeability increases again and with it the gas production rate [Law et al.,
2002].
2.4 CO2 STORAGE IN COAL SEAMS
2.4.1 SCREENING CRITERIA FOR CO2-ECBM
Not every coal reservoir will be a suitable candidate for CO2 sequestration for different
reasons. For example, some geological settings are inappropriate for coal seam
sequestration such as areas of significant folding and faulting. They pose a risk of CO2
and also CH4 being released to the surface in large quantities along open fractures.
Others may provide sufficient gas trapping and seals, but the reservoir permeability is
too low to allow effective CO2 injection. Target coals for CO2 storage with enhanced
CBM recovery can be identified through the application of a set of screening criteria.
Bachu [2003] presented 15 screening criteria based on which sedimentary basins can be
ranked with respect to their suitability for CO2 sequestration [Bachu, 2003]; these are
tectonic setting, size, depth, geology, hydrogeology, geothermal, hydrocarbon potential,
44
maturity, coal and CBM, salts, on- / off-shore, climate, accessibility, infrastructure, and
CO2 sources. More information on each criterion is provided in [Bachu, 2003]. The
criteria listed by Bachu were not developed specifically for screening for CO2
sequestration in coal seams, but for CO2 storage in sedimentary basins in general.
Screening criteria particularly developed for CO2-ECBM and CO2 storage in coal seams
were presented by Pashin et al. [2001] and Stevens et al. [1998].
Stevens et al. [1998] developed a preliminary list of first order reservoir characteristics
important for the application of CO2-ECBM. The coal seams should be laterally
continuous and vertically isolated, faulting should be minimal, permeabilities should be
greater than 1 mD, the seams should be thick and few rather than multiple thin coal
seams, the ideal depth is likely to range from 100 to 1,500 m, but will vary by basin.
From an economic point of view Stevens et al. suggested that the coals should be gas
saturated. Other factors that are likely to affect ECBM recovery are coal quality
(characterised by rank, grade, and maceral composition), gas composition, and others,
but Stevens et al. expected these factors to only marginally impact on ECBM
economics.
As the main geological factors for site selection for CO2 sequestration in coal Pashin et
al. [2001] identified stratigraphy, structural geology, and hydrogeology as screening
criteria. However, coal quality was also highlighted as a factor as it determines the
sorptive capacity of the coal towards different gases. In addition to the geological
variables, Pashin et al. discussed the availability of low cost CO2 capture technologies
and the importance of existing infrastructure, such as well fields, pipelines, roads, etc. as
necessary screening criteria.
Taillefert and Reeves [2003] presented a screening model for ECBM recovery and CO2-
ECBM sequestration in coal. Instead of defining screening criteria, the model predicts
the results of a CO2-ECBM project under a broad set of conditions and assumptions to
facilitate a first assessment over the suitability of a specific site for CO2-ECBM.
2.4.2 WORLDWIDE CO2-ECBM POTENTIAL
CBM resource estimates are necessary to make predictions for the global CO2 storage
potential in coal. As previously stated (section 2.2.1), coal comprises a significant CBM
45
storage volume comparable to that of conventional gas reservoirs [Zuber, 1996]. Thus,
the theortical storage capacity with respect to CO2 is even larger as coal in general
adsorbs more CO2 than CH4 as described in section 2.2.2 - Preferential sorption.
Laboratory experiments show that medium to high rank coals can generally adsorb
approximately twice as much CO2 as CH4 by volume [Puri and Yee, 1990]. This implies
that for high rank coals the CO2 storage capacity could be approximately twice that of
CH4. For lower rank coals it would be even higher; Faiz et al. [2007] found that for sub-
bituminous and brown coals the CO2:CH4 ratio can even exceed a ratio of 10:1.
However, this is the result of lower rank coals exhibiting lower CH4 sorption capacities
and does not necessarily imply that the volumetric storage capacity for CO2 increases.
Kuuskraa [1990, 2009], Boyer [1994], Murray [2000], and Al-Jubori et al. [2009]
presented estimates of global CBM resources for which Kuuskraa also included
estimates of the technically recoverable resources. These estimates are summarised in
Table 2.1. Table 2.1 indicates that the resource estimates have not changed significantly
over the last 20 years (compare Kuuskraa [1990] and Kuuskraa [2009] as well as Al-
Jubori et al. [2009]), though Kuuskraa’s estimate of technically recoverable resources
has increased by 63% from 510 TCF to 830 TCF. Jenkins and Boyer [2008] and Seidle
[2011c] stated a global CBM resource estimate of greater 9,000 TCF which is in
agreement with data presented by Boyer [1994] and Murray [2000], though higher than
Kuuskraa’s more recent resource estimate (up to 7,630 TCF) [2009]. According to the
data summarised in Table 2.1 the greatest percentage of world CBM resources is
concentrated in five countries: Russia, USA, China, Canada, and Australia.
46
Table 2.1: Comparison of global CBM resource estimates by Kuuskraa [1990, 2009], Boyer [1994],
Murray [2000], and Al-Jubori et al. [2009]; *includes Czech Republic; *includes South Africa,
Zimbabwe, and Botswana; *** includes New Zealand
Kuuskraa, 1990 Boyer, 1994 Murray, 2000 Al-Jubori et al., 2009 Kuuskraa, 2009
CBM CBM
CBM GIP recoverable CBM GIP CBM GIP CBM Reserves CBM GIP recoverable
Country (TCF) (TCF) (TCF) (TCF) TCF (TCF) (TCF)
Russia 550-1,550 n/a 600-4,000 600-4,000 1,730 450-2,000 200
China 350-1,150 70 1,060-1,240 1,060-2,800 1,307 700-1,270 100
USA 500-1,730 150 343-414 275-650 1,748 500-1,500 140
Australia 310-410 60 300-500 300-500 1,037 500-1,000 120***
Canada 570-2,280 140 200-2,700 300-4,260 699 360-460 90
Indonesia - - - - - 340-450 50
Germany - - 100 100 - - -
UK - - 60 60 102 - -
Western
Europe 120 n/a - - - 200 20
Poland 70* n/a 100 100 - 20-50 5
Ukraine 50 n/a 60 60 42 170 25
Kazakhstan 40 10 40 40 23 40-60 10
India 90+ 20 30 30 71 70-90 20
Southern
Africa** 100 20 30 40 - 90-220 30
Turkey 50 10 - - - 50-110 10
Other - - 30 - - 50+ 10
Total 3,010-7,840 510 2,953-9,304 2,976-12,640 6,759 3,450-7,630 830
However, CBM resource estimates alone are not sufficient to allow estimates over
potential CO2 storage capacities; only a fraction of the theoretically available storage
volume will be occupied by CO2 [Benson, 2000]. This is based on geological and
technical limitations alone, not even considering economic factors. Screening criteria as
discussed above (section 2.4.1) have to be applied to allow some assessment over the
potential CO2 storage capacities of a coal reservoir. Based on factors such as market
potential, production potential, CBM / CO2 storage potential, CO2 supply potential, and
the cost of infrastructure. Wong et al. [2001] prepared a ranking to identify the best
basins for CO2–ECBM in Australia, China, India, and Poland. Their evaluation
identified the Australian Bowen Basin as the basin with the highest potential out of all
the basins investigated in this study, followed by the Qinshui Basin in China, the Upper
Silesian Basin in Poland, and the Cambay Basin in India. A similar approach was
applied by Reeves [2001] who compiled a ranking based on potential reserves, resource
concentration, producibility, development costs, and CO2 availability. The results of his
analysis are presented in Table 2.2 which was published in White et al. [2005].
47
Table 2.2: Ranking of the world’s most prospective coal deposits for CO2–ECBM/Sequestration for 13 coal basins by Reeves [2001] with 1 = lowest and 5 = highest.
CO2 storage
Coal basin / Potential Reserve ECBM Development Gas sales CO2 Overall Basin CO2 enhanced
Country potential
region reserves concentration producebility costs market availability score ranking reserves
(x106 t)
San Juan USA 5 5 5 5 4 5 29 1 13 1,400
Kurnetsk Russia 5 4 4 3 4 4 24 3 10 1,000
Bowen Australia 5 4 4 4 4 3 24 4 8.3 870
Ordos China 4 3 4 3 2 2 18 13 6.4 660
Sumatra Indonesia 4 3 3 3 4 4 21 8 3.5 370
Uinta USA 2 3 5 5 4 5 24 2 2.2 230
Western
Canada 4 2 3 4 3 3 19 9 1.6 170
Canada
Sydney Australia 4 4 3 3 4 4 22 7 1.4 150
Raton USA 2 3 4 5 4 5 23 5 0.8 90
Cambay India 3 5 3 4 5 3 23 6 0.7 70
Ukraine/
Donetsk 1 5 2 3 4 4 19 11 0.3 30
Russia
North East
China 2 4 2 3 4 4 19 12 0.2 20
China
Danodar
India 2 3 2 4 4 4 19 10 0.1 10
Valley
Total high potential basins 48.5 5,070
48
Numerous other studies have provided quantitative estimates of the CO2 storage
capacity in coal, either on a regional, a national, or even a global scale [Kuuskraa et
al., 1992; Stevens et al., 1999; Connell et al., 2006; Quattrocchi et al., 2006; Virginia
Center for Coal and Energy Research, 2011; Gunter et al., 1997; Hamelinck, 2001;
Dreesen et al., 2001]. On a worldwide scale Kuuskraa et al. [1992] estimated a CO2
sequestration potential of 300 - 964 Gt. This is considerably higher than the number
presented later by Stevens et al. [1999] who estimated a global CO2 storage capacity
in unmineable coal seams of 225 Gt. Additionally, based on a cash flow analysis
Stevens et al. supplied cost estimates for CO2 storage in coal. Out of the 225 Gt, 5 -
15 Gt can be sequestered at a profit assuming enhanced CH4 production, 60 Gt can be
stored at a cost below US$50/t of CO2 and another 150 Gt at a cost between US$100/t
and US$120/t. A study on behalf of the Netherlands Agency for Energy and the
Environment concluded that approximately 8 Gt of CO2 can be stored in Dutch coals
[Hamelinck, 2001]. Dreesen et al. [2001] reported a storage capacity of 0.21 Gt of
CO2 for the Campine Basin in Belgium and for deep coalbeds in Alberta, Canada
Gunter et al. [1997] estimated a CO2 storage potential of approximately 20 Gt. The
results are strongly affected by the assumptions and approaches applied in estimating
the CO2 storage capacity [Bergman and Winter, 1995]. The general lack of data on
coal seam thickness, lateral continuity, seam depth, methane content, and CO2
adsorption isotherms means that many of these parameters have to be estimated. To
get a better understanding of the physical storage process and to verify its technical
feasibility, several CO2-ECBM pilot projects have been initiated, some of which are
described in more detail below. The knowledge acquired through these projects will
also assist in obtaining more accurate estimates of the CO2 storage potential.
2.4.3 ECBM WORLDWIDE PILOTS
To demonstrate the technical feasibility of CO2 storage in coal for ECBM recovery, to
acquire more knowledge, and to verify models and laboratory findings a number of
CO2-ECBM pilot projects have been or are currently being performed worldwide.
Those projects provide invaluable information and assist in answering crucial
questions such as the CO2 injected rate, how much CO2 is retained in the reservoir,
and how does CO2 injection affect the CH4 production rate and the composition of the
49
produced gas? The largest and longest-running CO2-ECBM pilot project to date was
the Allison Unit Trial located in the San Juan Basin in the northern part of New
Mexico in the United States [Reeves and Oudinot, 2005]. In addition to other pilots in
the USA, CO2-ECBM pilots can also be found in Canada, Poland, Japan, and China.
Regional feasibility studies on CO2-ECBM have also been conducted in Australia, the
Netherlands and Italy [Connell et al., 2006; Hamelinck, et al., 2001; Quattrocchi et al.,
2006] to name just a few.
The Allison Unit is a well-developed, high permeability (30 – 150 mD) CBM field
with a production history dating back to 1989 [Reeves and Oudinot, 2005]. The aim
of the pilot was the investigation of the feasibility of CO2 sequestration in deep
unmineable coal seams. The project provided 6 years of injection history over which
370,000 t of CO2 were injected. Based on reservoir simulation (using ARI’s
COMET2) it was predicted that over the 6 years of injection 6.4 BCF of CO2 could be
injected into the pilot area of which 1.6 BCF would be eventually reproduced
alongside the methane. The incremental methane recovery was forecasted at 1.6 BCF
yielding a CO2:CH4 net storage ratio of 3:0 (4.8 BCF CO2 to 1.6 BCF CH4). This
represents an additional recovery of 17 – 18% of original gas in place (OGIP) [Reeves
and Oudinot, 2005].
The Alberta Research Council in Canada initiated a program to study the technical
and commercial viability of CO2-ECBM [Mavor et al., 2002; Mavor et al., 2004;
Gunter et al., 2006]. The project is located in the Fenn-Big Valley in Alberta, Canada.
The pilot well targeted the Medicine River (Mannville) coals and the permeability
around the well was determined as 3.65 mD. Results from the pilot well were used to
predict the performance of a 5-spot pattern. The results estimated that under ideal
conditions – uniform permeability and seam thickness, etc. - 70% of the 5-spot pattern
can be swept before CO2 breakthrough occurs and within the swept zone
approximately 81% of the methane is replaced by CO2. A recovery of up to 56.4% of
GIP over 3.6 years at an injection rate at twice the production rate is predicted at the
point of breakthrough, whereas primary recovery was estimated to yield only 43% of
GIP over 6.2 years. The Alberta project demonstrates that CO2-ECBM is not only
possible in high permeability reservoirs such as the San Juan Basin, but also in
reservoirs of lower permeability. The reduction in permeability caused by CO2
injection is thought to be mitigated by intermittent injection of CO2.
50
The RECOPOL project was the first European demonstration project for CO2 storage
in coal seams and was launched in November 2001 in the Upper Silesian Basin in
Poland [van Bergen et al., 2003, 2006, 2009; Pagnier et al., 2005]. Injection of liquid
CO2 commenced in August 2004. After fracturing of the coal seams in April 2005
continuous injection was established at a rate of 12 - 15 t/d of CO2 and continued until
injection was suspended in early June. About 760 tonnes of CO2 were injected into
the reservoir between August 2004 and June 2005. Because of CO2 breakthrough 10%
of the injected gas was reproduced from the production well. As a response to CO2
injection, the CH4 production rates increased significantly compared to baseline
production levels [van Bergen et al., 2009].
In 2002 a 6 year CO2 sequestration project, JCOP (Japan CO2 Geosequestration in

Coal Seams Project), was launched by the Japanese Government [Yamaguchi et al.,
2006; Fujioka, 2006]. First experiments commenced October 2004 in the Ishikari coal
field in Hokkaido, Japan. The pilot consisted of one production and one injection
well. The permeability of the target coal seam before CO2 injection was estimated at 1
md. During CO2 injection a reduction in permeability was observed, but the injection
rate still increased over time - from 1.6 t/d to 3.5 t/d of CO2. The tests showed that gas
production was positively affected by CO2 injection and declined straight after CO2
injection was suspended. Gas production rates for 2004 were in the range of 60 - 241
m3/d whereas production rates for 2005 were between 70 and 373 m3/d.
Another pilot is located in the southern part of the Qinshui Basin in the Shanxi
Province [Wong et al., 2006]. Here, the absolute permeability prior to CO2 injection
was established at 12.6 mD. CO2 injection at a rate of approximately 13 - 16 t/d (192
tonnes in total) was preformed from April 6 to April 18 2004. Each injection cycle
was a daily cycle of injection and soak. After a shut-in period the well recommenced
production on June 22 for 30 days to receive production rates and gas composition
data to estimate sorption behaviour and calibrate the reservoir simulator – CMG’s
GEM. The performance of a 5-spot pattern consisting of 4 production wells and one
injection well was simulated based on the obtained results. The input value for the
first CO2 injection was chosen as 22,653 m3/d (0.8 MMCF/d). The results showed
significant production improvements with enhancement factors ranging from 2.8 - 15
(peak production rates before CO2 break-through ranging from 1,789 - 6,319 m3/d
compared to primary production rates of 520 – 2,036 m3/d).
51
In New Mexico, USA, the Pump Canyon CO2-ECBM/sequestration project injected
319 MMCF of CO2 over a period of 12 months (July 2008 – August 2009) into the
Late Cretaceous Fruitland coals with the primary objective of demonstrating the
feasibility of CO2 sequestration in deep, unmineable coal seams [Oudinot et al.,
2011]. Though the coals were highly permeable (10 – 1,000 mD), CO2 injectivity
significantly decreased during injection as a result of matrix swelling and a
subsequent reduction in permeability. Still, numerical modelling indicated that CBM
recovery was enhanced by the injection of CO2 by 26 MMCF, demonstrating the
efficacy of CO2 sequestration in coal seams. Further modelling work showed that
CBM production could have been improved through well stimulation practices. No
significant CO2 build up was observed, though a continuous increase in CO2 concent
at one of the surrounding monitoring wells was noted which could have been a sign of
slow CO2 breakthrough [Oudinot et al., 2011].
As part of the Asian Pacific Partnership for Clean Development and Climate a CO2
injection trial was performed in the Shanxi Province, China using a multi-lateral
horizontal well [Connell et al., 2011b]. In total 460 tonnes of CO2 were injected,
generally in pulses of 10 – 20 tonnes. Analysis of the results showed progressive
sweep of methane by the injected CO2 and no early CO2 breakthrough. No gas
migration into the neighbouring formations was detected providing evidence of
storage assurance.
2.4.4 OPERATIONAL GUIDELINES FOR CO2-ECBM
A significantly body of research considering operational practices for enhanced

recovery design exists in the field of CO2 enhanced oil recovery. Ghaderi et al. [2012,
2013] applied experimental design to make sensitivity analysis manageable as to
allow consideration of the effect of field design (well spacing, fracture orientation,
and fracture spacing), reservoir properties, and economic parameters for CO2-EOR.
Ghomian et al. [2008] investigated well spacing and injection schemes for a variety of
reservoir properties to maximise project economics through the application of
experimental design and Monte Carlo simulation. Jahangiri and Zhang [2011]
developed a theoretical framework to analyse the co-optimisation of CO2-EOR
investigating the effect of different injection strategies and injection timing and
52
optimising the project NPV. With respect to CO2-ECBM only few studies have been
performed evaluating the optimal operational design with respect toreservoir
parameters. Here, the research generally focuses on enhancing gas recoveryrather than
optimsing the project economics. As a consequence, no sound judgement about the
optimal operational design for CO2-ECBM can be made [Bromhal et al., 2004] and
more research is required.
Odusote et al. [2004] developed a CO2 performance predictor tool by employing

neuro-simulation methods for investigation of the effects of intrinsic coal seam
properties (porosity, permeability, cleat spacing, and gas sorption capacity) and
operational design parameters (injector well orientation and length, injection start, and
injection pressure) on the cumulative CO2 injected and stored, the cumulative CBM
recovered, and the time to CO2 breakthrough. Project economics were not considered.
Gorucu et al. [2005], Jikich et al. [2004], Sams et al. [2002, 2004], and Smith et al.
[2005] examined the effects of horizontal well length, CO2 injection rates,
permeability anisotropy, and coal swelling and shrinkage (Young’s modulus and
Poisson’s ratio) on CO2 storage and gas recovery performance. The effects of matrix
shrinkage / swelling, CO2 injection rate and horizontal wells on the economics were
also discussed by Gorucu et al. and Jikich et al. The studies were carried out for a set
of reservoir properties representative of Appalachian coals (k = 8 mD, D = 440 m).
The authors found that the optimum operational design for CO2-ECBM is a strong
function of CO2 costs and prices. Bromhal et al. [2004] concluded “economic
considerations can have a significant effect on optimal design”.
Balan and Gumrah [2009] carried out parametric simulation studies considering
different coal types, well types, well patterns, as well as injection fluids (pure CO2
and mixtures of varying CO2/N2 composition) and their effect on production and
storage performance. However, no economic evaluation of the results was performed.
Gonzales et al. [2009] performed an extensive reservoir simulation study evaluating

different well types for three coal types in combination with three different reservoir
permeabilities (1, 10, and 100 mD). The study did not specifically assess the effect of
permeability and other factors on the economics of ECBM and only a qualitative
discussion of the results was presented.
53
Jamshidi [2010] explored the effect of the injection of CO2 and N2 mixtures of
varying composition on CBM recovery and associated water production, not taking
into account any economic considerations.
2.5 THE ECONOMICS OF CO2 STORAGE IN COAL SEAMS

Economic considerations are an integral part in assessing the feasibility of CO2-
ECBM as they will determine if and under which circumstances the technology could
be financially viable. Not unlike CO2 storage potential estimates, the economics are
strongly affected by the underlying assumptions and approaches applied. The main
issue in determining the economics of CO2 storage in coal is the basis on which they
are being derived. The work published in the area of CO2-ECBM economics can
generally be separated into two categories: incremental economics [Reeves and
Oudinot, 2005; Massarotto, 2006; Wong et al, 2010] and total economics [Wong et
al., 2000; Jikich et al., 2004; Hernandez, 2006; Gorucu et al., 2007; Robertson, 2009].
Incremental economics only consider the costs and revenues associated with CO2
injection and incremental CBM recovery whereas total economics also include the
costs and revenues from the primary recovery scenario. Presenting incremental
economics implies that both primary and enhanced production have to be modelled
before they are compared against each other to derive the incremental case. To
evaluate the true value of CO2 injection into coal seams such analysis is necessary.
Assessing the total economics only can lead to wrongful conclusions about the
financial viability of the project. The incremental project may not be profitable due to
the cost of the injected CO2 and the injection wells required, but the revenues from the
primary project may still be high enough to cover these losses and make the CO2-
ECBM project appear economically viable.
As the term CO2-ECBM can be ambiguous and has been used in literature
interchangeably to describe both total as well as incremental economics, for this thesis
the term CO2 Storage with incremental coalbed methane recovery, in short Storage-
ICBM, is chosen to describe the incremental scenario of CO2 storage in coal. The
term CO2-ECBM is applied when the total economics are discussed. A discussion of
this specific terminology is presented in Chapter 4.
54
Other issues affecting the comparability of economic analyses of Storage-ICBM relate
to variations in specific cost items, such as costs of wells and compression, and
economic parameters such as the discount rate used to determine the net present value
(NPV) of a project. However, these variations are generally necessary as they can be
the result of regional differences. Comparing the economics of different projects
becomes even more complex when tax and other private and governmental take are
included in the analysis.
The greatest economic uncertainty associated with any CO2 storage project is
currently the price of CO2. In many economic analyses of CO2 storage in coal seams
the injected CO2 is assumed as a cost. However, if a CO2 price applied, there would
be a financial benefit associated with the injection of CO2. Only few storage options
such as ECBM and EOR can expect to derive direct benefits from the injection of
CO2. Thus, it can be argued that receiving revenues for the injection of CO2 is a
possible option when CO2 sequestration is to be practiced on a large scale. The
assumptions made about the price or cost of CO2 will largely affect the outcome of an
economic analysis [Jikich et al., 2004].
A common approach to presenting the economics of CCS are the cost of CO2 avoided
(see Chapter 4 for a detailed explanation) which are also sometimes applied to assess
CO2-ECBM economics [Wong et al., 2000; Massarotto et al., 2006]. However, this
requires a reference point from which the CO2 is avoided; for example, CO2 capture
from a coal fired power station. Such analysis is generally outside the scope when the
performance and economics of CO2-ECBM are of interest. Most commonly, the
economics of CO2-ECBM are presented by means of the project’s net present value
(NPV) [Jikich et al., 2004; Reeves and Oudinot, 2005; Hernandez et al. 2006; Gorucu
et al., 2007; Robertson, 2009]. Other indicators used are the internal rate of return
(IRR, also known as rate of return - ROR) [Wong et al., 2010] as well as return on
investment (ROI) [Robertson, 2009]. The economic and accounting indicators are
used to measure and compare the profitability of investments.
The NPV represents today’s worth of a project. It takes the effect of time on the value
of money into consideration. To determine the NPV future cash flows are discounted
at a representative rate. The discount rate is generally chosen based on the interest rate
that could be achieved by an alternative investment.
55
k ( R − C$ )i
NPV = ∑ (2.37)
(1 + d )
i
i =1
The IRR is the discount rate at which the NPV is zero, i.e. the NPV of the negative
cash flows is equal to the NPV of the positive cash flows. For projects with the same
investment amount, the project with the highest IRR would be the best investment.
The IRR can be a misleading indicator, because the investment might have several
IRRs. This is especially likely to be the case for incremental projects such as those
evaluated here.
k ( R − C$ )i
NPV0 = ∑ (2.38)
(1 + IRR )
i
i =1
ROI is an accounting indicator that measures the ratio of the project’s profit to the
capital invested over a period of time. It is used to evaluate the efficiency of an
investment and enables comparison of the efficiency of different investments. The
ROI is written as
P$
ROI = ⋅100% . (2.39)
CI
2.5.1 ECONOMIC FEASIBILITY OF CO2-ECBM / STORAGE-ICBM
Numerous case studies assessing the economic viability of CO2 storage in coal seams
with enhanced coalbed methane recovery have been performed (see below), though
within an Australian context, only limited work has been published so far. A study
undertaken by Massarotto et al. [2006] evaluated the economics of Storage-ICBM in
the Bowen Basin, Queensland which is regarded as one of the most promising basins
for CO2-ECBM. This is based on several factors including market potential,
production potential, CBM / CO2 storage potential, CO2 supply potential, and the cost
of infrastructure [Wong et al., 2000]. Massarotto et al.’s work uses the Allison Unit
CO2-ECBM pilot as a reference case as in its higher permeability areas it exhibits
similar permeabilities to those of the Bowen Basin (43 - 113 mD for the Allison Unit
and 50 - 150 mD for the Bowen Basin). Based on a gas price of A$2.50/GJ the
authors determined a final cost of CO2 avoided of A$35/t which also includes the
56
costs of capture from a coal fired power station. However, the cost of CO2 avoided
were not discounted (see Chapter 4) and no reservoir simulation was performed to
confirm the assumptions made regarding the production and injection profiles.
Outside of Australia, Reeves and Oudinot [2005] presented an economic analysis

based on production and injection data of the Allison Unit CO2-ECBM pilot. Their
analysis indicated the potential economic viability of Storage-ICBM at gas prices
above US$2.60/MCF and a CO2 cost of US$0.3/MCF (US$5.78/t).
Wong et al. [2010] also analysed the economics of Storage-ICBM in the South
Quinshui Basin, Shanxi, China. The results indicated the project would be
economically feasible even at a CO2 cost of U$5/t and a gas price of U$4.50/MCF
(for the incrementally produced gas).
Others assessed the economic potential of CO2-ECBM. Wong et al. [2000] analysed
the economics of CO2-ECBM in the Alberta Plains region, Canada. Their study found
that for a gas price of US$2/MCF a CO2 credit of US$13.40/t is required to make
CO2-ECBM viable. However, at a gas price of US$3/MCF no CO2 credit is necessary
(assuming zero cost of CO2).
Robertson [2009] assessed the profitability of CO2-ECBM in Powder River coals,

applying Monte Carlo simulation to determine the distribution of the project’s NPV.
He concluded that CO2-ECBM could be financially viable at an average CO2 cost of
US$0.19/MCF (US$3.66/t) based on an average gas price of US$8/MCF.
Hernandez et al. [2006] performed a probabilistic evaluation of CO2-ECBM in Texas

low rank coals. They concluded that over the investigated range of gas prices
(US$2/MCF – US$12/MCF), CO2 revenues (US$0.05/MCF – US$1.58/MCF,
equivalent to US$0.96/t – US$30.45/t) CO2-ECBM in Texas low rank coal is most
likely (> 95% probability) not going to be economically viable for CO2 costs ranging
from US$1/MCF to US$2/MCF (US$19.27/to US$38.54/t).
Jikich et al. [2004] evaluated the effect of different injection pressures on the net
present value of CO2-ECBM using coal properties typical of Appalachian coal seams.
They found that the most important economic parameter to be considered is the net
cost of CO2. Positive NPVs were obtained for a net CO2 cost below US$0/MCF
(implying a revenue obtained for the injection of CO2) and a gas price of US$3/MCF
for permeabilities greater 2 mD. For the same coals, Gorucu et al. [2007] performed
57
an analysis of the effect of matrix shrinkage and swelling in combination with CO2
injection pressures on the economics of CO2-ECBM. The NPV of CO2-ECBM was
positive for a gas price of US$4/MCF and a net CO2 cost of US$0/MCF (permeability
10 mD).
Gonzales et al. [2009] presented a qualitative assessment of the economic

performance of CO2-ECBM in which they investigated the economic potential as a
function of coal rank, permeability, injection well type, and production well type.
Their initial screening indicated that especially for CO2-ECBM in medium and high
rank coals the economics were positive when the CO2 could be supplied free of
charge.
2.5.2 PROBABILISTIC ECONOMICS OF STORAGE-ICBM
Most analyses evaluating the feasibility of CO2-ECBM are performed

deterministically. This allows assessment of a certain outcome representative of a
specific set of parameters, but does not offer any information about the likelihood
with which this is to occur. Due to the heterogeneous nature of coal seams, each
reservoir property is associated with a significant degree of uncertainty. Economic
parameters are also subject to uncertainty; for example due to changes in economic
circumstances, changes in legislation (i.e. a carbon tax or an emission trading
scheme), and technological advancements. There are various approaches for taking
this uncertainty into account; one widely used approach is Monte Carlo simulation.
Monte Carlo simulation is a probabilistic process during which key inputs are selected
and varied simultaneously within a range of values. The ranges are usually defined
based on knowledge about the reservoir or comparable reservoirs [Schepers et al.,
2010]. However, research addressing the issue of uncertainty in coalbed methane
recovery is limited. The uncertainty associated with CO2-ECBM has received even
less attention.
Seidle et al. [2003] presented a probabilistic analysis of CBM economics. They

constructed probabilistic distributions of annual gas volumes and coupled it with
distributions of gas prices to generate probabilistic economics of primary recovery.
Roadifer et al. [2003] performed a parametric study with the objective of identifying
the relative importance of the individual reservoir parameters with respect to primary
58
production performance and their inter-relationships. An economic analysis was not
included in the study. Clarkson and McGovern [2005] presented a CBM prospecting
tool that combines single well reservoir simulators with a gridded reservoir model,
Monte Carlo simulation, and economic modules. Outputs included distributions of
project net present value, chance of economic success, and others.
Schepers et al. [2010] implemented a Monte Carlo approach to investigate geological

and reservoir parameters with the greatest influence on injectivity and ECBM
recovery. Schepers et al.’s study did not extend to an economic analysis and did also
not compare the effect of CO2 injection to conventional primary recovery.
Robertson [2009] used Monte Carlo Simulation to determine the probabilistic NPV of
CO2-ECBM in Powder River coals. However, uncertainty was only assigned to
economic parameters and not to reservoir properties. Robertson’s evaluation did not
consider primary recovery.
Hernandez et al. [2006] evaluated the uncertainty of ECBM with CO2 and N2-CO2
mixtures of different composition. The uncertain reservoir properties were seam
thickness, permeability, coal density and sorption time. Economic parameters were
gas price, CO2 price, CO2 capture costs, well costs, and compression costs amongst
others. However, similar to Robertson [2009], the analysis did not consider primary
recovery economics.
The literature review indicates that only one study incorporated both, uncertainty in
reservoir properties as well as economic parameters [Hernandez et al., 2006]. None of
the studies, except for Massarotto et al. [2006], were performed on an incremental
basis, thus not allowing objective assessment over the benefits of CO2 injection.
2.6 RESEARCH GAPS

The literature review highlighted several gaps in the body of research relating to CO2
storage in coal. With respect to the physical processes occurring in coal reservoirs
further research is required to strengthen the understanding of multi-component
sorption behaviour and the process of coal swelling and shrinkage. This is necessary
to improve existing theoretical models and enable more accurate predictions of the
59
coal reservoir’s response during recovery and injection. Research gaps relating to the
economic aspects of CO2-ECBM and Storage-ICBM were also identified:
Research performed considering the economics of CO2 storage in coal in an

Australian context is very limited. This is despite of Australia having a fast
and steadily growing CBM industry and in spite of the Bowen Basin being
considered a high potential candidate for CO2-ECBM [Stevens et al., 1998;
Bradshaw et al., 2000].
Screening criteria for target coals for CO2 storage in coal that specifically
consider the economic viability of CO2-ECBM and Storage-ICBM have not
been established.
Operating guidelines for economic CO2-ECBM field development do not exist
due to the lack of practical experience and the lack of strong focus on
demonstrating and improving the technical feasibility of the process.
A common methodology for assessing the benefits of CO2 injection and
modelling the economics of CO2 storage in coal is lacking. For example, in
many cases the assessment of CO2 storage in coal is not performed on an
incremental basis, which implies that the effect of CO2 injection on production
performance and the financial merit of it cannot be determined.
Only very few probabilistic analyses have been carried out evaluating the
economics of CO2-ECBM. No approach has been presented to perform
parametric studies for the incremental case of Storage-ICBM that integrates
both uncertainty in reservoir properties and economic parameters.
As a result of these findings, this thesis will focus on the development of screening
criteria for economic Storage-ICBM. This will be achieved through
development of a novel methodology for the economic assessment of Storage-

ICBM which integrates reservoir simulation studies and economics;
application of the methodology to simulations of coal bed methane reservoirs
representing a range of property combinations to determine preliminary
operating guidelines for economic Storage-ICBM;
application of Monte Carlo techniques incorporating uncertainty in both
economic parameters and reservoir properties to identify key parameters most
60
crucial to economic Storage-ICBM, to establish conditions that provide
Storage-ICBM with the highest possibility of economic success, and to
quantify economic risk.
61
3 RESERVOIR SIMULATION STUDIES OF CO2
INJECTION INTO COAL SEAMS FOR CBM
RECOVERY ENHANCEMENT AND CO2 STORAGE
The economic evaluation of CO2 storage with incremental coalbed methane recovery
(Storage-ICBM) requires estimates of CO2 injection as well as methane production
rates. In the absence of actual field data, such data is obtained through predictions
from reservoir simulators. Inputs for the simulation of gas flow in the coal seam are
the site specific reservoir properties as well as operational parameters. This chapter
describes a simulation case study of CO2 storage in an Australian CBM reservoir. It
shows the assumptions and methods used starting with the development of the
reservoir model through to the analysis of the reservoir behaviour. The results of this
case study are later used to demonstrate the methodology employed to evaluate the
economics (Chapter 4).
3.1 INTRODUCTION TO SPRING GULLY, BOWEN BASIN

The site selected for the case study is the Spring Gully prospect located in the
southern part of the Bowen Basin, Queensland, Australia approximately 80 km
northeast of Roma as shown in Figure 3.1. Based on its reservoir properties and its
proximity to major CO2 emission sources, the Bowen Basin is considered to be one of
the most prospective basins for CO2-ECBM in the world [Stevens et al., 1998] and the
highest potential basin in Australia [Bradshaw et al., 2000]. The Bowen Basin
comprises an area of over 50,000 km2 and has an estimated theoretical CO2 storage
capacity of 210 BCF (≈ 5,950 Mm3) [Stevens et al., 1998]. The target coals for CBM
are of Late Permian age and belong to the Bandanna Formation. Bradshaw et al. state
that there are at least four coal seams with an individual thickness from 0.5 – 9 m that
spread throughout the basin.
62
Spring Gully
Figure 3.1: Spring Gully location in the Bowen Basin, Queensland [Queensland Government,
Department of Mines, 2009].
The Spring Gully licence area lies in the southern end of the Comet Ridge, a major
fairway in the Bowen Basin with high gas content, high permeability bituminous
coals. The Comet Ridge also hosts the Fairview project – a world class CBM
producer. Spring Gully produces gas from three coal seams with an average aggregate
thickness ranging from 5 – 8 m buried at a depth of 700 – 800 m (depth to coal)
[Pitkin, 2006].
The Spring Gully CBM field is operated by Origin Energy and commenced
production in 2005. Average gas flows surpassed expectations and wells needed to be
choked back due to limitations of the Spring Gully gas processing plant and the
Wallumbilla Gas Hub. In 2008 Spring Gully was producing gas at a rate of over 100
TJ/d [Mathew, 2008].
Even though the reservoir data collected for Spring Gully is extensive, it is pre-
dominantly confidential and not available to this study. Instead, this study uses public
63
sources of information to estimate the reservoir properties required to construct the
reservoir model for the simulation study. The approach followed in this work is (a)
identification of an initial set of reservoir and well properties from publically
available information; (b) definition and verification of the reservoir model grid; and
(c) refinement and verification of the reservoir properties through a series of
simulation studies. In the first simulation study the values for the key reservoir
properties of permeability and adsorption isotherms are identified through comparison
of simulated peak gas rates with publically stated average field peak gas rates. In the
second simulation study history matching is performed against publically available
data from pilot production testing to verify the reservoir model. The reservoir model
is then used to predict average field behaviour for primary recovery as well as
enhanced gas recovery with CO2 injection.
3.2 CONSTRUCTION OF THE RESERVOIR MODEL

Reservoir simulation combines geology, petrophysics, reservoir engineering, and
production operations. Inputs for the simulator are geological and engineering data
describing the initial reservoir conditions. An explanation of the individual reservoir
properties and processes as well as a brief introduction to reservoir simulation was
provided in Chapter 2. The quality of the data, as well as the definition of the initial
conditions and the boundary conditions determines the reliability of the simulation
[Paul, 1996].
3.2.1 COMPILATION OF INITIAL AVERAGE RESERVOIR PROPERTIES
A complete list of the reservoir properties required for the simulation of Spring Gully,
their respective values and sources of reference, is presented in Table 3.1. Known
reservoir properties are permeability, average depth, reservoir pressure, net seam
thickness, gas content, reservoir temperature, and methane desorption time. These
properties were obtained from publicly available documents and Spring Gully well
reports [Edgar, 2005; Oil Company of Australia, 2003a, 2004a, 2004b; Origin Energy,
2002; Pitkin, 2006]. Unknown properties are porosity, cleat compressibility, matrix
compressibility, Young’s modulus, Poisson’s ratio, maximum strain, sorption
64
isotherms and relative permeability data. Some of these were inferred from coal
basins exhibiting comparable properties; porosity, cleat compressibility, Young’s
modulus, and Poisson’s ratio are measurements reported for Fruitland coals, San Juan
Basin [Palmer and Mansoori, 1998; Sawyer et al., 1990]; values for maximum strain
and matrix compressibility are representative of Illinois Basin coals [Harpalani, 2005;
Levine, 1996]; the relative permeability curve was measured on Bowen Basin core
samples [Meany and Paterson, 1996; Wold et al., 1995] and is presented in Figure 3.2.
Gas content in the Spring Gully licence area was determined as greater 97% [Tri-Star
Petroleum Company, 2001a, 2001b, 2001c]. Here, for simplification, a reservoir gas
content of 100% methane is assumed.
Permeability, sorption isotherms, and gas content are generally the most critical for
assessing reservoir performance [Zuber and Olszwewski, 1993]. Permeability is
quoted to range from 1 – 1,000 mD [Pitkin, 2006]. Conversely, no information is
accessible on Spring Gully sorption isotherms. Thus, these two critical properties
require further evaluation to determine representative values for the reservoir model.
This is described in section 3.2.4. The average gas content was provided by Origin
Energy, the operator of Spring Gully [Edgar, 2005].
1.0
0.9
0.8
Relative Permeability, -
Gas Relative
0.7 Permeability
0.6
0.5
0.4
0.3
0.2
0.1 Water Relative
0.0
0.0 0.2 0.4 0.6 0.8 1.0
Water Saturation, -
Figure 3.2: Relative permeability curve presented by Wold et al. obtained through history
matching of Dawson River 4 in the Bowen Basin (modified from Wold et al. [1995]), which was
also history matched by Meany and Paterson [1996].
65
Table 3.1: Reservoir properties used for the reservoir simulation of Spring Gully.
Reservoir Property Value Reference

Depth to coal, D 800 m
6.5 m (from 3 main Edgar, 2005; Oil
Net seam thickness, d
seams) Company of Australia
15 m3/t daf1, 12.75 m3/t 2004a
Initial gas content, Gci
as received
Permeability, k 1 – 1,000 mD (250 mD) Pitkin, 2006
Reservoir pressure, PRes 80 bar (8,000 kPa) Oil Company of
Australia, 2003, 2004a,
Reservoir temperature, TRes 45°C
2004b
CH4 Langmuir volume, VL,CH4 23.5 m3/t as received Esterle et al., 2006
(Hunter and Bowen
CH4 Langmuir pressure, PL,CH4 2,030 kPa
Basin)
Oil Company of
CH4 desorption time, tCH4 1 day Australia 2003, 2004a,
2004c
CO2 Langmuir volume, VL,CO2 44.1 m3/t Esterle et al., 2006
(Hunter and Bowen
CO2 Langmuir pressure, PL,CO2 1,580 kPa
Basin)
Assumption based on
CO2 desorption time, tCO2 0.5 days
tCH4
Maximum strain CH4, εCH4 0.009 Levine, 1996 (high
volatile C bituminous
Maximum strain CO2, εCO2 0.017 (based on εCH4) coals)
Harpalani, 2005 (Illinois
Matrix compressibility, cm 3 x 10-7 kPa-1
Basin)
Cleat compressibility, cf 8.72 x 10-5 kPa-1
Palmer and Mansoori,
Young’s modulus, E 2.0 GPa
1998 (San Juan Basin)
Poisson's ratio, ν 0.39
Sawyer et al., 1990 (San
Porosity, φ 2.0%
Juan Basin)
Estimate for bituminous
Coal density, ρCoal 1,400 t/m3
coal
Gas composition, xCH4 100% CH4 Simplification
3.2.2 WELL DESIGN
The wells at Spring Gully are vertical wells which are either fracture stimulated or
cavitated [Pitkin, 2006] to increase gas flow rates. According to Pitkin, with respect to
gas recovery no completion method has proven superior over the other at Spring
1
daf = dry ash free; means that the gas content relates to a moisture and ash free coal.
66
Gully; low and high flowing wells exist for both stimulation methods. Comparing and
assessing the two different stimulation types is impeded as a result of the
heterogeneous nature of coal. Uncertainty prevails as to how much variability can be
attributed to the stimulation method and how much to the local coal properties [Pitkin,
2006]. Since neither method is clearly better, a simple hydraulic fracture is used in the
simulation as this is easier to represent in the reservoir model.
Except for the fracture type, no further information is provided on the fracture
dimensions. These are generally estimated based on well tests and simulation studies
and do not necessarily represent the actual fracture in place. The true fracture
dimensions can only be determined with certainty after mine-backs (when the coal
seam is finally mined and the fracture can actually be seen). Thus, for the reservoir
model a hypothetical fracture is estimated. Fractures in high permeability reservoirs
are generally designed to be shorter but wider than fractures in low permeability coals
[personal communication with Jeffrey, R., 2009]. Assuming a commercial fracturing
sand of 200 D permeability as available from Unimin Australia [2009] and a fracture
width of 0.03 m yields a conductivity of 6,000 mD.m. This is the ideal conductivity
not considering closure stress, embedment, and fracture fluid residues. These factors
adversely affect fracture conductivity and are described in detail elsewhere [Gidley et
al., 1989]. Based on this, the effective conductivity is estimated as a third of the ideal
conductivity, i.e. 2,000 mD.m. The relationship between productivity and fracture
penetration established by McGuire and Sikora [1960] suggests a fracture half length
of 100 - 150 m. To ensure the fracture extends over the whole pay zone of 6.5 m, its
height is designed as 7.5 m. The fracture properties are summarized in Table 3.2. The
grid used to model the fracture is an exponential Cartesian grid with a grid block size
of 5 m at the wellbore. The grid block size increases exponentially with increasing
distance from the wellbore up to a grid block size of 50 m.
67
Table 3.2: Fracture properties used in the simulation.
Property Value
Half length 150 m
Height 7.5 m
Conductivity 2,000 mD.m
Width 0.03 m
3.2.3 RESERVOIR MODEL GRID
Because a homogeneous reservoir is assumed for the simulation, a symmetry element

representing a quarter well can be used to predict well performance. Two grids were
trialled to determine the sensitivity of the simulation to the grid using the properties
listed in Table 3.1 and Table 3.2; these are a 20 x 20 x 1 and a 30 x 30 x 1 (X x Y x Z)
exponential Cartesian grid describing a reservoir volume of (500 x 500 x 6.5) m3. The
500 m represents the drainage radius of the well which is based on the initial well
spacing of 1 km2 at Spring Gully [Edgar, 2005]. The 6.5 m is the average net seam
thickness which is represented by a single layer in the simulation.
68
35 15
20x20x1 grid
30 30x30x1 grid 10
CH4 Production Rate in 1000 m /d
3
Deviation
25 5
Deviation, %
20 0
15 -5
10 -10
5 -15
0 -20
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
Time, days
Figure 3.3: Comparison of the CBM flow rate obtained using the 20 x 20 x 1 and the 30 x 30 x 1
grids. The deviation of the 30 x 30 x 1 grid from the 20 x 20 x 1 grid is represented by the blue
coloured curve.
The results of the trial are shown in Figure 3.3. The deviation (error) between the two
grids initially exceeds 10%, but decreases to less than 0.2% before peak production is
achieved. This indicates that the finer grid does not have an impact on the long-term
gas production rates and the coarser grid can be used to decrease the time required for
a simulation run from hours to a few minutes, or - in the case of enhanced recovery
processes - from days to a few hours. The grid is shown in Figure 3.4.
69
Inj
500
400
300
Y axis
200
100
P1
0
0 100 200 300 400 500
X Axis
Figure 3.4: Aerial view of the reservoir grid. The grid uses 20 x 20 x 1 blocks to describe a
volume of 500 m x 500 m x 6.5 m which represents a quarter of the well drainage area. The
producer well is located in the bottom left corner of the grid and is defined as a quarter well. An
injection well is placed in the top right corner which is shut-in during primary recovery. The grid
blocks are not of equal size, but increase in size with increasing distance from the well. Smaller
grid blocks around the wells are used to capture the near well behaviour as best as possible,
3.2.4 SELECTION OF MODEL ISOTHERMS AND PERMEABILITY
To determine the sorption isotherms and the reservoir permeability representative of

the average field, a set of simulation studies was carried out using the properties
presented in Table 3.1 and the well and grid model as described in 3.2.2 and 3.2.3. No
detailed production data was available, but average peak production rates at Spring
Gully have been quoted to range from 900 to 1,500 MCF/d (25,500 - 42,500 m3/d) by
Origin Energy [Edgar, 2005; Pitkin, 2006; Origin Energy, 2002]. This information
was used to tune the reservoir model.
Both reservoir permeability as well as sorption isotherm data have been found to
contribute significantly to the magnitude of gas flow rates [Roadifer et al., 2003;
Zuber and Olszewski, 1993]. Therefore, they cannot be considered independently but
have to be tuned together to yield behaviour representative of the average field. This
70
is an iterative process in which either parameter is adjusted to enhance or diminish the
effect of the other. Thus, initial estimates for permeability and isotherm data based on
publically available information are necessary.
The methane isotherms compiled for this study are shown in Figure 3.5. The
isotherms are representative of coals from the northern and central Bowen Basin as
well as Hunter Basin coals and were obtained from two sources; a report from the
Australian Coal Association Research Program (ACARP) evaluating Hunter and
Bowen Basin coals [Esterle et al., 2006] and a paper by Laxminarayana and Crosdale
[1999] on methane sorption on different Bowen Basin coals types. Three isotherms
were considered in combination with different reservoir permeabilities to identify a
relationship that yields production rates in the range quoted by Origin [Edgar, 2005;
Pitkin, 2006; Origin Energy, 2002]. The isotherms evaluated with respect to their
effect on methane production are highlighted in Figure 3.5. The blue isotherm
represents the mathematical average (i.e. average Langmuir volume and average
Langmuir pressure) of all isotherms presented in Figure 3.5. The green isotherm is the
mathematical average of the Hunter and Bowen Basin CH4 isotherms from the
ACARP report and the red isotherm is that of Hunter and Bowen Basin coals for a
volatile matter content of 20 – 24.9%, also from the ACARP report.
71
40
ACARP VM 20-24.9% Isotherm
35 Average Isotherm
30
Adsorbed CH4, m /t
3
25
20
15
10
5
Average ACARP Isotherm
0
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Pressure, kPa
Figure 3.5: CH4 sorption isotherms measured for samples taken from the northern and central
Bowen Basin and Hunter Basin coals [Esterle et al., 2006; Laxminarayana and Crosdale, 1999].
ACARP CH4 isotherms presented at 15% ash content, CH4 isotherms from Laxminarayana and
Crosdale presented as received.
The absolute permeability for the Spring Gully prospect was quoted as 50 – 150 mD
[Edgar, 2005; Origin Energy, 2002]. Those values were obtained from wireline well
logs. However, the reservoir permeability has since been revised to range from 1 –
1,000 mD (unfractured) based on flow rates and history matching of the production
behaviour of individual wells [Pitkin, 2006]. Empirically, production from vertical
wells at rates such as quoted for Spring Gully is generally associated with
permeabilities significantly above 1 mD. This indicates that an average reservoir
permeability of more than 100 mD is highly likely.
For the evaluation of the effect of methane isotherms on gas peak rates a reservoir
permeability of 250 mD is assumed. The respective production rates obtained are
shown in Figure 3.6. Figure 3.6 indicates that only one of the isotherms investigated
yields rates within the quoted range. This is the ACARP isotherm for a volatile matter
content of 20 – 24.9%.
72
70
60
CH 4 Production Rate in 1000 m /d
3
Average ACARP Isotherm

50
40
ACARP VM 20-24.9% Isotherm
Origin Peak Rates
30
20
Average Isotherm
10
0
0 500 1,000 1,500 2,000 2,500 3,000
Days
Figure 3.6: CH4 production rates for the three different isotherms in comparison to peak rates
quoted by Origin Energy.
However, the peak gas rate is also a function of permeability and thus the effect of
reservoir permeability on peak gas rates using the ACARP isotherm for a volatile
matter content of 20 – 24.9% is also presented (Figure 3.7). Figure 3.7 demonstrates
that only permeabilities from 200 mD to approximately 350 mD yield rates within the
range quoted by Origin; a permeability of 100 mD is too low and a permeability of
400 mD too high. A permeability of 200 mD is conservative as it yields peak rates
just above the lower limit of the range and a permeability of 300 mD is optimistic as
the associated peak rates fit in the top third of the range. The permeability of 250 mD,
however, yields peak rates close to the middle of the range and is thus selected to
represent average field permeability in the reservoir simulation.
73
50
k = 400 md
45
CH4 Production Rate in 1000 m /d
3
40
k = 300 md Origin peak rates
35
30
25
k = 200 md
20
k = 250 md
15
k = 100 md
10
0
0 500 1,000 1,500 2,000 2,500 3,000
Days
Figure 3.7: CH4 production rates as a function of reservoir permeability compared to CH4
production peak rates quoted by Origin Energy.
Alternatively, if the Average isotherm or the Average ACARP isotherm were to be

used in the reservoir model, the average reservoir permeability would need to be
significantly more or significantly less than 250 mD respectively to match Origin’s
average peak rates. While such combinations are not unlikely, in the absence of
further data, using a moderate isotherm (ACARP isotherm for a volatile matter
content of 20 – 24.9%) and a moderate reservoir permeability (250 mD) to represent
average field behaviour is the more conservative approach.
As can be seen in Figure 3.5, considering the large range of isotherms presented, the
three isotherms show only small deviation from one another. However, the difference
in peak production rates is significant. For that reason it can be assumed that for
permeabilities ranging from 200 – 300 mD neither of the isotherms below the
Average ACARP Isotherm (green) and above the Average Isotherm (blue) yield
results within Origin’s range and thus no further evaluation of isotherms was
performed.
74
3.2.5 CO2 SORPTION ISOTHERM
The CO2 isotherm is obtained from the previously cited ACARP report [Esterle et al.,
2006]. The CO2 isotherms published in that report are shown in Figure 3.8. For
matters of consistency, the CO2 isotherm representative of coals with a volatile matter
content of 20 – 24.9% is used in the simulation. Properties of the CH4 and CO2
isotherms were presented earlier in Table 3.1 on an “as received” basis. Using this
CO2 isotherm yields a CO2 / CH4 sorption ratio of approximately 2:1 (VL,CO2 = 44.1
m3/t, VL,CH4 = 23.5 m3/t). This is in agreement with the rule of thumb that medium to
high rank coals can generally adsorb approximately twice as much CO2 as methane by
volume [Gentzis, 2000; Puri and Yee, 1990].
Values for Langmuir volume and pressure corresponding to the CH4 and CO2
isotherms are presented in Table 3.1 on an “as received” basis.
40
35
30
CO2 Content, m3/t
25
20
CO2 Isotherm VOM = 20-24.9%
15
10
5
0
0 1000 2000 3000 4000 5000 6000
Pressure, kPa
Figure 3.8: CO2 sorption isotherm (presented at 15% ash content) for Bowen Basin and Hunter
coals with a volatile matter content of 20 – 24.9 % (modified from Esterle et al. [2006]) which was
used for the simulation.
3.2.6 EVALUATION OF THE RESERVOIR MODEL
The purpose of the reservoir simulation is to predict average well performance

representative of the field which can then form the basis for the economic analyses to
75
be presented in the next chapter. The properties described above and presented in
Table 3.1 are selected for the reservoir model because they yield peak production
rates corresponding to those quoted elsewhere [Edgar, 2005; Pitkin, 2006; Origin
Energy, 2002]. While simulation output is never unique and it is highly likely that a
different combination of input parameters exists that yields similar rates, the
simulation results shown in section 3.2.4 indicate that the selected parameters could
be representative of the average reservoir properties and field behaviour. The next
section presents history matching of short term production data collected during pilot
testing for five Spring Gully wells with the objective of verifying the above selected
reservoir properties.
3.3 HISTORY MATCHING OF PILOT PRODUCTION DATA
The previous sections demonstrate that the reservoir properties shown in Table 3.1
yield peak production rates in broad agreement with those quoted for Spring Gully. In
this section, to further verify the selected parameters, history matching of published
flow rates is carried out. In history matching the behaviour of an individual well is
replicated to determine or verify local reservoir properties from which future well
performance is predicted. Water and gas flow rates for the initial 30 days of
production testing are available for five non-stimulated wells within the Spring Gully
licence area. These are DR (Durham Ranch) 4, 5, 6, 8, and 9 [Tri-Star Petroleum
Company, 2001a, 2001b, 2001c, 2001d, 2001e]. The location of the wells is shown in
Figure 3.9. Bottomhole flowing pressures were not provided.
76
Figure 3.9: Location of wells DR4, 5, 6, 8, and 9 in the Spring Gully licence areas PL 195, ATP
701P (now PL 204), and ATP 529P [Oil Company of Australia, 2003b]. Scale unknown.
In the simulations either gas or water flow rate can be used as the controlling
parameter with the other one representing the observational parameter that needs to be
matched. Bottomhole pressure, which is generally used as a controlling parameter in
reservoir simulation studies, was modelled as free flowing in the absence of any data,
though a minimum bottomhole pressure of 200 kPa was defined. The properties
changed to achieve a match are absolute and relative permeability, isotherm data,
desorption time and desorption pressure / initial water saturation (an indirect way of
changing the initial gas content). The other input variables are constant and are as
presented in Table 3.1, with the exception of depth to coal and the net seam thickness.
These variables were provided within the individual well reports. The best history
match of the production rate of a specific well is determined by two criteria: lowest
mean absolute error and lowest sum of squares deviations.
3.3.1 HISTORY MATCHING OF DR4, DR8, AND DR9
The best fit history match for wells DR4, DR8, and DR9 are shown in Figure 3.10,
Figure 3.11, and Figure 3.12 respectively alongside the recorded flow rates. The
77
values for the history matched properties as well as the associated error can be found
in Table 3.3. Wells DR5 and DR6 were also history matched, but no satisfactory fit
could be obtained. This is discussed in section 3.3.2.
16 Recorded Gas Rate DR4 700

Simulated Gas Rate DR4
14 600
Recorded Water Rate DR4
Gas rate in 1,000 m /d
Water rate, m /d
3
12
3
500
10
400
8
300
6
200
4
2 100
0 0
0 5 10 15 20 25 30 35
Days
Figure 3.10: Best gas rate match for well DR4 compared to the recorded flow rates [Tri-Star
Petroleum Company, 2001a].
Recorded Gas Rate DR8

10 500
Simulated Gas Rate DR8
9 Recorded Water Rate DR8 450
8 400
Water rate, m /d
3
7 350
6 300
5 250
4 200
3 150
2 100
1 50
0 0
0 5 10 15 20 25 30 35
Days
Petroleum Company, 2001d].
78
Recorded Gas Rate DR9
5.0 Simulated Gas Rate DR9 250
4.5 Recorded Water Rate DR9
4.0 200
3
Water rate, m /d
3.5
3
3.0 150
2.5
2.0 100
1.5
1.0 50
0.5
0.0 0
0 5 10 15 20 25 30 35
Days
Petroleum Company, 2001e].
Table 3.3: Reservoir properties obtained through the history matching process. Note that for the
simulation either desorption pressure or initial water saturation is defined.
Input Parameters Unit DR4 DR8 DR9

Permeability, k mD 260 350 300
3
CH4 Langmuir volume, VL m /t 23 21 21
properties
matched
CH4 Langmuir pressure, PL kPa 1,200 1,500 1,000
History
CH4 desorption time, τ days 25 1 1

Desorption pressure, Pdesorp kPa 6,645 8,600 -
Initial water saturation, Sw - - - 0.94
Wold
Relative permeability curve, krel - 11a 11b
et al.
Depth to coal, D m 665 885 813 Properties
from well
Net thickness, d m 9.4 17.1 8.2 reports
3
Mean absolute error (MEA) m /d 605 1149 519 Error
Sum of squares (SSQ) (1,000 m /d)
3 2
21.8 101.6 15.2 analysis
Figure 3.10, Figure 3.11, and Figure 3.12 and the error analysis (Table 3.3) show that
small deviations exist between the simulated and the recorded flow rates. The
differences could be caused by many factors.
79
In the simulation, the coal seam is represented by a single homogeneous layer
using average properties. In reality, the well is producing from several seams
which have different properties and are most likely heterogeneous.
The initial non-stimulated reservoir permeability is assumed to be
homogeneous while it actually is expected to exhibit anisotropy.
The Warren-Root model [Warren and Root, 1963] used in SIMEDWin and
most other commercial reservoir simulators to describe the dual porosity
nature of the coal is known to exhibit difficulties in predicting early time flow
behaviour [Pruess and Narasimham, 1985].
The simulator uses simplified equations to approximate reservoir behaviour.
The condition of the well (fracture, skin, etc.) and how it is operated is not
known, thus increasing the overall uncertainty.
Despite these factors, the simulated flow rates are good approximations of the ones
recorded. This indicates that the simulated permeability may be representative of the
actual permeability as this is the parameter with the highest impact on peak flow rates
[Roadifer et al., 2003].
History matching indicated that relative permeability data had a significant impact on
the early stage production behaviour. A different relative permeability curve had to be
used to simulate the behaviour of each individual well resulting in two new relative
permeability curves in addition to the one presented in Figure 3.2. Given the
heterogeneous nature of coal, this is feasible and similar observations were made by
Meany and Paterson [1996]. Meany and Paterson measured several relative
permeability curves for Bowen Basin coals in the laboratory on core samples. The
results exhibited great variability which was attributed to the heterogeneity in the
samples.
The relative permeability curve used in the reservoir model ( Figure 3.2) is
appropriate for history matching well DR9. The two new relative permeability curves
for wells DR4 and DR8 are shown in Figure 3.13 and Figure 3.14 respectively.
80
1.0
0.9 Gas Relative
Permeability
Relative Permeability 0.8
0.7
0.6
0.5
0.4
0.3
0.2 Water Relative
0.1 Permeability
0.0
0.0 0.2 0.4 0.6 0.8 1.0
Water Saturation
Figure 3.13: Relative permeability data derived through history matching of DR4.
1.0
0.9
0.8 Gas Relative
Relative Permeability
Permeability
0.7
0.6
0.5
0.4
0.3
0.2 Water Relative
0.1 Permeability
0.0
0.0 0.2 0.4 0.6 0.8 1.0
Water Saturation
Figure 3.14: Relative permeability data derived through history matching of DR8.
3.3.2 HISTORY MATCHING OF DR5 AND DR6
In addition to wells DR4, DR8, and DR9, wells DR5 and DR6 were also history
matched. However, no satisfactory match or approximation of the production
performance could be achieved for these two wells. The flow behaviour of DR5 is not
typical for a well that has just started production - it immediately achieves stable gas
and water rates as shown in Figure 3.15. For DR6 the initial gas rates are very high
before they decrease and then increase again (Figure 3.16). This is not typical flow
behaviour and may indicate possible measurement problems or other operational
conditions not described in the report [Tri-Star Petroleum Company, 2001c]. The
water rate could only be matched after 22 days of production.
81
For both DR5 and DR6 it should be noted that the gas rate is very high; significantly
higher than those initial rates recorded for DR4, DR8, and DR9 and also higher than
the quoted average peak production rates. This is especially interesting as DR5 is
located in close proximity to DR4 (see Figure 3.9), yet, its gas production rate is
approximately four times higher. Without further data the high flow rates for DR5 and
DR6 are difficult to explain. The net seam thickness is comparable to that of DR4
(approximately 8 m). A possible explanation could be a geological trap that ensured
large quantities of free gas to be stored around these two wells. Alternatively, there
may have been errors associated with the gas measurement.
60 Recorded Gas Rate DR5 1,750

Recorded Water Rate DR5
50 1,700
3
Water rate, m /d
40 1,650
3
30 1,600
20 1,550
10 1,500
0 1,450
0 10 20 30 40
Days
Figure 3.15: Gas and water rates for DR5 [Tri-Star Petroleum Company, 2001b]. It was not
possible to match or obtain a satisfactory approximation of the production behaviour.
82
70 120
60 100
3
Water rate, m 3 /d
50
80
40 Recorded Gas Rate DR6
Recorded Water Rate DR6 60
30 Simulated Water Rate DR6
40
20
10 20
0 0
0 5 10 15 20 25 30 35
Days
Figure 3.16: Best water rate match for DR6 in comparison to the recorded flow rates [Tri-Star
Petroleum Company, 2001c]. Only the later stage water rate could be matched.
3.3.3 COMPARISON OF HISTORY MATCHED DATA TO THE

RESERVOIR MODEL
Table 3.3 summarizes the reservoir properties obtained through history matching of
wells DR4, DR8, and DR9. These were absolute and relative permeability, Langmuir
data, desorption time, and desorption pressure or initial water saturation. Comparison
of the history matched values to those selected to represent the whole field (shown in
Table 3.1) highlights differences as well as similarities between the data sets. The
representative reservoir permeability was determined as 250 mD while history
matching yielded permeabilities ranging from 260 to 350 mD. Considering that a
reservoir permeability of 300 mD yields methane rates well within the range of
quoted peak production rates (shown in Figure 3.7), the history matched and the
selected field permeability are in excellent agreement.
The largest difference between the properties in Table 3.1 and Table 3.3 is found in
the level of seam saturation. Based on the quoted average gas content (15 m3/t dry ash
free, 12.75 m3/t as received) and the estimated methane isotherm (section 3.2.4) from
Table 3.1, the coal seam is significantly undersaturated and depressurization to 2,400
kPa is necessary before gas flow occurs. The history matched wells on the other hand
83
indicate coal seams that are either close to saturation (DR4, DR8, and DR9) or even
oversaturated (DR5 and DR6) and gas flow occurs (almost) immediately.
In addition, large variations are found for the seam thickness. While the net seam
thickness measured at DR4, DR8 and DR 9 ranges from 8.2 to 17.1 m, the average
thickness for the reservoir is only quoted as 6.5 m [Edgar, 2005].
Though the difference in both gas saturation and in net seam thickness is significant,
there is no indication of which data value, if either, is incorrect. Not all seams of the
coal formation may be subject to production; this reduces the effective net thickness.
Additionally, the growing number of wells reduces the initial level of gas saturation as
wells start to interfere with each other. Because of the heterogeneous nature of coal
reservoirs, using data from a single well and extrapolating it to describe an entire field
does not generally yield a reliable representation of the average field behaviour. The
Spring Gully prospect comprises an area of approximately 725 km2 [Uhde-Shedden,
2008] and the properties presented in Table 3.1 were selected to represent most of this
region. Thus, each of the data sets is valid only in its own right in that it should be
considered as representative of the area local to each well.
3.4 SIMULATION OF CO2 STORAGE WITH INCREMENTAL

CBM RECOVERY
The simulation case study to predict enhanced CBM recovery with CO2 injection at
Spring Gully uses the reservoir model defined in 3.2. Details regarding the well
spacing and the operating conditions for the simulation of CO2 injection are provided
next. This is followed by the results of the case study, including a description of
observed relative permeability effects and the effect of CO2 injection on reservoir
permeability.
3.4.1 WELL SPACING AND DESIGN
In reality, reservoirs are heterogeneous and as a consequence the well spacing can be
irregular with lower well densities in so called sweet spots. However, for the case
study a homogenous field is assumed so that a regular well spacing can be applied.
84
For the primary recovery scenario a producer well spacing of 1 km2 is used which is
representative of the initial spacing at Spring Gully [Edgar, 2005] and in agreement
with the drainage radius of 500 m described in section 3.2.3. For the CO2 injection
scenario, infill wells are used so that a producer injector ratio of 1:1 is obtained. This
yields a producer / injector spacing of 0.25 km2 or, expressed as a distance, a well
spacing between producer and injector of 0.7 km.
The injection wells at Spring Gully are vertical wells. However, in contrast to the
production wells, they are not stimulated as the average reservoir permeability did not
impose a problem for the designated injection rate (as demonstrated in Figure 3.17).
3.4.2 OPERATING CONDITIONS
The production well is water rate controlled until a bottomhole pressure of 200 kPa is
achieved. Using the reservoir properties from Table 3.1, the seam is initially fully
water saturated and the reservoir pressure has to be lowered to 2,400 kPa before first
gas flow occurs.
In the CO2 injection scenario, injection commences 31 days after primary recovery
has started. The reason for the short delay is to allow some dewatering and thus
depressurisation of the seam before CO2 is injected. The injection rate is constant until
the maximum injection pressure is reached. The maximum injection pressure must be
lower than the estimated fracture pressure to avoid uncontrolled fracturing of the
reservoir. For Spring Gully, the maximum injection pressure is defined as 15,000 kPa
based on an estimated fracture pressure of 16,000 kPa.
The CO2 injection rate is set at 21,807 m3/d per well. This is based on a field of 100
production wells for primary recovery and 100 infill wells for the CO2 injection
scenario. The total amount of CO2 injected per year (100 x 21,807 m3/d) is equivalent
to the amount of CO2 captured from a 500 MW NGCC, that is 1.46 Mt/yr. This is
described in Chapter 4.
85
3.4.3 SIMULATED FLOW RATES
Production and injection rates obtained using the reservoir model described in 3.2 and
the operating conditions as described before are shown in Figure 3.17. The injection
of CO2 into the coal seam causes a 46% increase in peak methane rate over the
primary recovery scenario. Furthermore, cumulative gas recovery is notably
accelerated. The produced gas is 100% CH4 until after about 5,000 days (~ 14 years)
when the injected CO2 first appears at the production well.
50
Primary CH4 recovery
45 Enhanced CH4 recovery
40 CO2 production rate
Rate in 1,000 m /d/well
35 CO2 injection rate

3
30
25
20
15
10
5
0
0 2,000 4,000 6,000 8,000 10,000
Time, days
Figure 3.17: Predicted rates for primary gas recovery (red curve) and the CO2 injection scenario
(blue curves).
3.4.4 RELATIVE PERMEABILITY EFFECTS
At the very beginning of CO2 injection an initial decrease in production is observed

which is attributed to relative permeability effects. To highlight this effect, Figure
3.18 shows the differential production rate in addition to primary and enhanced
methane recovery rates for the first 400 days of production.
In primary recovery, water is drawn towards the production well due to a pressure
differential between the reservoir and the well. In the injection scenario, CO2
86
displaces the water present in the fracture system and drives it towards the low
pressure area around the production well. Thus, initially, water saturation around the
producer increases. This is shown in Figure 3.19 (62 days of production) compared to
Figure 3.20 (215 days of production). Thus, compared to the primary CBM scenario,
more water, but less gas is initially produced and the differential gas production rate
turns negative (Figure 3.18 - point 1). With continuing CO2 injection more water is
displaced and produced; the water saturation around the producer increases. This is
demonstrated by the decrease in enhanced gas production rate after 62 days (Figure
3.18 – point 2). Once the water front reaches the producer, gas production stops
completely (Figure 3.18 – point 3). Eventually, the end of the water front arrives at
the producer (Figure 3.21 – 243 days of production) and gas starts flowing alongside
the water again (Figure 3.18 – point 4). Production rates increase above primary
levels as a result of both methane displacement and an increased pressure differential
between reservoir and production well caused by the continuous injection of CO2.
30
Enhanced CBM
25
Primary CBM
20
Rate in 1000 m /d/well
15
10
Differential CBM
3
5
0
-5 0 50 100 150 200 250 300 350 400
-10
-15
1 2
-20
3 4
-25
Time, days
Figure 3.18: Differential, primary, and enhanced CH4 recovery rates highlighting the initial
decrease in production rate for the CO2 injection scenario as a result of relative permeability
effects. Point 1: Start of CO2 injection and decrease in differential gas production; point 2:
decrease in enhanced gas recovery rate; point 3: gas flow stops; point 4: gas starts flowing again.
87
Aerial plot at 62 DAYS for w ater saturation (fraction) Aerial plot at 215 DAYS for w ater saturation (fraction)
Inj Inj
500 1.00 500 1
0.98 0.983
0.97 0.966
0.95 0.949
400 400
0.93 0.933
0.92 0.916
0.90 0.899
0.88 0.882
Y Direction (m)
Y Direction (m)
300 300
0.87 0.865
0.85 0.848
0.83 0.832
0.81 0.815
200 200
0.80 0.798
0.78 0.781
0.76 0.764
100 0.75 100 0.747
0.73 0.73
0.71 0.714
0.70 0.697
P1 0.68
P1 0.68
0 0
0 100 200 300 400 500 0 100 200 300 400 500
X Direction (m) X Direction (m)
Figure 3.19: The distribution of the water saturation (fraction) within the Figure 3.20: The distribution of the water saturation (fraction) within the
coal seam after 62 days of production. P1 (bottom left corner) is the producer coal seam after 215 days of production. P1 (bottom left corner) is the
well, Inj (top right corner) is the injection well. producer well, Inj (top right corner) is the injection well.
88
Aerial plot at 243 DAYS for w ater saturation (fraction)
Inj
500 1
0.983
0.966
0.949
400
0.933
0.916
0.899
0.882
Y Direction (m)
300
0.865
0.848
0.832
0.815
200
0.798
0.781
0.764
100 0.747
0.73
0.714
0.697
P1 0.68
0
0 100 200 300 400 500
X Direction (m)
Figure 3.21: The distribution of the water saturation (fraction) within the coal seam after 243
days of production. P1 (bottom left corner) is the producer well, Inj (top right corner) is the
injection well.
3.4.5 EFFECT OF CO2 INJECTION ON RESERVOIR PERMEABILITY
Coal volume is known to be affected by gas sorption as described in section 2.2.3.

Gas desorption from the coal surface causes the coal matrix to shrink [Harpalani and
Chen, 1997; Seidle and Huitt, 1995] resulting in increased cleat porosity and
permeability and thus improved gas flow. Conversely, gas adsorption causes swelling
of the coal matrix [Harpalani, 2002; Laxminarayana et al., 2004; Cui and Bustin,
2005; Mazumder, 2006; Siriwardane, 2006]. Swelling is detrimental to gas recovery
as it can reduce coal porosity and thus permeability. Due to the different sorption
affinities of individual gases to coal, coal swells more in the presence of CO2 than of
CH4 [Levine, 1996; Ciu et al., 2004]. Depending on the original reservoir
permeability, this can severely impact the CO2 injection behaviour.
The effects of matrix shrinkage and swelling on reservoir permeability as well as net
stress effects are also represented in the simulation study. The permeability in the
vicinity of the production well decreases from the initial 250 mD to its lowest value of
89
109 mD after 31 days (Figure 3.22). However, after this, a permeability rebound is
observed and permeability around the producer keeps increasing continuously (Figure
3.23) until after 4,740 days a maximum permeability of 179 mD is achieved (Figure
3.24).
Around the injection well, however, permeability quickly decreases to less than 17
mD (Figure 3.23, 243 days of CO2 injection) as a result of CO2 adsorption and never
recovers. The permeability decrease extends throughout the reservoir as CO2 migrates
towards the production well, but doesn’t fall below 19 mD (Figure 3.24, 4,740 days of
CO2 injection). Figure 3.17 demonstrates that despite the significant decrease in
permeability the remaining permeability of ~19 mD is sufficient to maintain a
constant injection rate without exceeding the maximum bottomhole pressure (BHP).
Aerial plot at 31 DAYS for y- gas permeability (mD)

Inj
500 116.4
115.9
115.5
115.1
400
114.7
114.3
113.9
113.5
Y Direction (m)
300
113.1
112.7
112.3
111.9
200
111.5
111.1
110.7
100 110.3
109.9
109.5
109.1
P1 108.7
0
0 100 200 300 400 500
X Direction (m)
Figure 3.22: The distribution of permeability within the coal seam after 31 days of production.
Permeability around the producer has fallen from the original 250 mD to 109 mD. CO2 injection
has not yet commenced. P1 (bottom left corner) is the producer well, Inj (top right corner) is the
injection well.
90
Aerial plot at 243 DAYS for y- gas permeability (mD) Aerial plot at 4740 DAYS for y- gas permeability (mD)
Inj Inj
500 128.7 500 179
122.8 170.5
116.8 162.1
110.9 153.7
400 400
105 145.2
99.1 136.8
93.2 128.4
87.3 119.9
Y Direction (m)
Y Direction (m)
300 300
81.4 111.5
75.5 103
69.6 94.6
63.7 86.2
200 200
57.8 77.7
51.9 69.3
46 60.9
100 40.1 100 52.4
34.2 44
28.3 35.6
22.4 27.1
P1 16.5
P1 18.7
0 0
0 100 200 300 400 500 0 100 200 300 400 500
X Direction (m) X Direction (m)
Figure 3.23: The distribution of permeability within the coal seam after 243 Figure 3.24: The distribution of permeability within the coal seam after 4,740
days of production / 212 days of injection. Permeability around the producer days of production. Permeability around the producer has increased to 179
has increased to 129 mD. Permeability around the injector has fallen to less mD while the CO2 front moves further through the reservoir where it reduces
than 17 mD due to coal swelling. P1 (bottom left corner) is the producer well, the permeability to 19 mD. P1 (bottom left corner) is the producer well, Inj
Inj (top right corner) is the injection well. (top right corner) is the injection well.
91
3.5 SUMMARY & CONCLUSIONS
This chapter illustrates the construction of a reservoir model based on limited available
data with the objective of forecasting CH4 production and CO2 injection rates for a
Storage-ICBM case study. The model is intended to represent the average field
behaviour at Spring Gully. Data that is not provided by the field operator is inferred
from coal reservoirs exhibiting similar properties and through tuning of the reservoir
model properties against known peak production rates. The reservoir model is then
verified through a series of history matching studies of pilot production test data before
it is used to predict primary and enhanced CBM recovery with CO2 injection at Spring
Gully.
The simulation results show that while the injection of CO2 causes relative permeability
effects resulting in an initial decrease in gas relative permeability and thus a decrease in
CBM production rates, an increase of 54% in methane peak production rate is observed.
This is despite a permeability decrease to 19 mD caused by the adsorption of CO2 onto
the coal. This reduction in permeability also does not affect the CO2 injection rate which
remains constant throughout the life of the project, i.e. the bottomhole pressure never
reaches the maximum injection pressure of 15,000 kPa. This indicates that the
remaining permeability of 19 mD is still sufficient to allow CO2 injection at the
designated rate. Breakthrough of CO2 at the production well occurs after approximately
14 years of injection.
In the next chapter (Chapter 4) the simulation case study presented here is used to
demonstrate the methodology used to evaluate the economics of CO2 storage in this
thesis.
92
4 METHODOLOGY TO DETERMINE THE ECONOMICS
OF CO2 CAPTURE AND STORAGE WITH
INCREMENTAL CBM RECOVERY
In this thesis economic assessments are conducted using a discounted net cash flow
(DCF) model. The purpose of the model is to assist researchers, policy makers, and
businesses to evaluate the economic feasibility of CO2 storage in coal seams and allow
comparison to other storage options. The model is based on the methodology developed
by the CO2CRC [Allinson et al., 2012] to assess the economics of CCS, but diverges
from it on several points to make it more suitable for the specific characteristics of
Storage-ICBM. The methodology and assumptions used in the DCF model are
illustrated in this chapter. The DCF model is then applied to estimate the economics for
the simulation case study of Spring Gully described in Chapter 3.
The chapter consists of five parts; (1) a description of the methodology used in the DCF
model; (2) a description of the individual components of the CCS process (i.e. capture
and storage) and their calculation in the model; (3) the baseline assumptions for the
DCF model; (4) an economic evaluation of CCS and Storage-ICBM at Spring Gully
demonstrating the methodology; and (5) an analysis of the effect of the 2012 Australian
tax regime on project economics.
4.1 MODEL SYSTEM BOUNDARIES

A schematic of an example CCS system as it could apply to a CO2 storage with
incremental coalbed methane recovery (Storage-ICBM) project is shown in Figure 4.1.
A natural gas fired power station is located at the site, fuelled by gas produced from the
reservoir. The CO2 emissions generated during power generation are captured and
compressed for injection into the reservoir. The high pressure CO2 is transported to the
individual injection sites via distribution lines. The gas produced from the reservoir is
subject to treatment and compression to meet inlet requirements before it is supplied to
the power station.
93
System Boundary CCS-ICBM
CO2
Compression
Power
Station Capture
Flue gas
90% recovery System Boundary
Storage-ICBM
Dehydration &
Compression
Methane Coal Seam
Figure 4.1: Schematic of an example carbon capture and storage project with enhanced CBM
recovery. The system boundaries define which components are included in the CCS DCF model
and the Storage-ICBM DCF model.
While the power station from which the CO2 is captured is a pivotal element in
determining the overall economics of CCS, it is not directly included in the DCF model.
Instead, the type and size of the power station is indirectly included as it determines
how much CO2 is captured and at what cost. The power station costs and revenues
themselves are not necessary for an analysis of CCS with incremental CBM recovery
(CCS-ICBM) as only the incremental effects of capture are of interest for this analysis
(see section 4.2.1). Therefore, the power station is outside the boundaries of the CCS-
ICBM system as shown in Figure 4.1. This allows separation of the CCS-ICBM
operation from the power station operation. Within the CCS-ICBM system boundary
the boundary of the Storage-ICBM system is defined. This is also indicated in Figure
4.1. The Storage-ICBM system includes the possible purchase of CO2, CO2
compression after capture, pipeline transport to the injection site, CBM production,
compression, dehydration, and gas sales to the power station or a different point of sale
(such as sale into a distribution pipeline).
94
4.2 THE COSTS OF CO2 AVOIDED
To present the economics of a CCS project in a meaningful manner, an appropriate
indicator is required. A commonly used economic indicator is the net present value
(NPV) - a measure of the project’s profitability taking into consideration the effect of
time. However, the NPV on its own does not directly reflect the quantity of CO2 stored
or avoided. Thus, many researchers use the specific cost of CO2 avoided for presenting
CCS economics so that comparison of different projects is more meaningful. The
specific cost of CO2 avoided is defined as the CCS project’s net present value
normalised by the present value of CO2 avoided as shown in Eq. (4.1). It represents the
revenue required per tonne of CO2 avoided for the CCS project to break even. The
methodology used to derive the specific cost as it applies to CO2 storage in coal seams
is described next.
NPVCCS
SCCO2 = (4.1)
NPVCO2 ,avoided
4.2.1 CO2 CAPTURE AND STORAGE CASH FLOWS
As defined in the methodology developed by the CO2CRC [Allinson et al, 2012], the
economics of CCS include all costs and revenues incurred through the addition of CO2
capture and injection facilities to existing industry projects. This means the economics
of CCS are incremental economics. This is illustrated in Figure 4.2 which applies
specifically to CO2 storage in coal. Figure 4.2 shows the same CBM project without and
with CCS (scenario (a) and (b) respectively).
95
(a)
Costs Natural gas Costs Power
CBM (Revenue) Station
Natural gas
(Costs)
CO2
Costs Natural gas Costs

Storage (Revenue) Capture
(b)
Costs Natural gas Costs Power
CBM (Revenue) Station
Natural gas
(Costs)
Figure 4.2: Scenario (a): existing CBM and power station projects; scenario (b): storage and
capture projects as increments to the existing CBM and power station projects connected through
CO2 supply. The existing projects are in grey, the incremental projects are in black.
The sum of all incremental revenues less the sum of all incremental costs yields the
CCS project’s net cash flow (NCF). Alternatively, the net cash flow of the CCS project
is the sum of the net cash flows of capture, transport between the capture plant and the
storage site, and storage. This is expressed by Eq. (4.2) and (4.3).
NCFCCS ,i = ( R − Capex − Opex )CCS ,i = ( R − C$ )CCS ,i (4.2)
or
C$
NCFCCS ,i = NCFCapture ,i + NCFTransport ,i + NCFStorage,i (4.3)
Because the capture component does not yield an income, its net cash flow is equal to
the capture costs (see Figure 4.2). For the specific case presented in Figure 4.1, the
transport net cash flow equals zero because the CO2 source is located on site. The
transport of CO2 in flowlines from the CO2 delivery point to individual injection wells
is included in the net cash flow of storage.
96
The injection and storage of CO2 in coal seams is associated with incremental coalbed
methane recovery (Storage-ICBM). Thus, in this thesis Storage-ICBM is defined as an
increment to a CBM project, while CO2-ECBM is the sum of both Storage-ICBM and
the CBM project. This is highlighted in Figure 4.3. To determine Storage-ICBM
economics it is necessary to compare the CO2-ECBM project to the CBM project. Only
through the comparison can the effects of CO2 injection on production performance and
the associated additional costs and revenues be assessed. The incremental costs and
revenues include costs for injection wells, additional compression and processing
requirements, as well as revenues from incremental gas sales.
CO2 CO2
Costs Storage- Revenue

ICBM Costs CO2- Revenue
Costs Revenue
= ECBM
CBM
Natural gas Natural gas
Figure 4.3: Illustration of the definition of Storage-ICBM and CO2-ECBM. Storage-ICBM is the
increment to the CBM project, while CO2-ECBM is equivalent to the sum of Storage-ICBM and the
CBM project.
Figure 4.3 illustrates that the net cash flow (NCF) of Storage-ICBM is the difference
between net cash flow of CO2-ECBM and CBM. Thus, the Storage-ICBM net cash flow
in any year i is written as:
NCFICBM ,i = NCFECBM ,i − NCFCBM ,i (4.4)
NCFICBM ,i = ( RECBM − RCBM )i − ( CECBM − CCBM )i (4.5)
However, the CO2 required for injection is associated with a cost and in this chapter the
cost of CO2 is taken as the cost of CO2 capture. Thus, the CO2-ECBM project becomes
the sum of CBM, Storage-ICBM, and capture, i.e. CBM plus CCS-ICBM. This is
illustrated in Figure 4.4.
97
Costs
Capture
Costs Storage- Revenue Costs CO2- Revenue

ICBM ECBM
Costs Revenue
=
CBM
Natural gas Natural gas
Figure 4.4: Definition of CO2-ECBM when the costs for CO2 are included in the form of CO2
capture costs. In this case the CO2-ECBM project is the sum of CBM, Storage-ICBM, and capture.
To summarise, if the costs for CO2 are included, the CO2-ECBM project is defined as
the sum of capture, Storage-ICBM and CBM as shown in Figure 4.4. If CO2
capture/CO2 costs are excluded, CO2-ECBM is equivalent to the sum of CBM and
Storage-ICBM as illustrated in Figure 4.3.
4.2.2 DETERMINATION OF THE CO2 AVOIDED THROUGH CCS
Using the methodology from the CO2CRC [Allinson et al., 2012], the CO2 avoided in
CCS is the difference between the CO2 emitted without the CCS process and the CO2
emitted with the CCS process. The CO2 emitted with CCS are those emissions
generated by the capture and the storage process. This is shown in Eq. (4.6) and
illustrated in Figure 4.5 for the specific case of CO2 storage in coal seams, which shows
a CO2 flow diagram for both, the scenario without CCS (scenario (a)) and the scenario
with CCS (scenario (b)).
CO2,avoided = CO2, w / oCCS − CO2, withCCS (4.6)
CO2,Capture + CO2, Storage
98
CO2 CO2
(a)
Power
CBM
Station
CO2
CO2
Power CO2 CO2 Storage-

(b) Capture
Station ICBM
CBM CO2
Figure 4.5: CO2 flow diagram for (a) the scenario without CCS; and (b) the scenario with CCS. In
scenario (a) the CO2 emissions are vented straight to the atmosphere, whereas in scenario (b) power
station emissions are captured and stored.
To determine the specific cost of CO2 avoided using Eq. (4.1) a point of reference needs
to be defined. In general, CO2 avoided is determined using the same point source
without CCS as a reference, i.e. the reference point for scenario (b) in Figure 4.5 would
be scenario (a). Taking the power station without CCS as the point of reference as
shown in Figure 4.5 Eq. (4.6) becomes
CO2, avoided = CO2, PS − ( CO2,Capture + CO2, ICBM ) . (4.7)
As a consequence of the definition of Storage-ICBM and CO2-ECBM illustrated in

Figure 4.3, the emissions associated with the storage process are expressed as
CO2, ICBM = CO2, ECBM − CO2,CBM . (4.8)
The emissions associated with Storage-ICBM can be divided into three groups;
emissions from the combustion of incrementally produced natural gas, emissions
associated with the energy requirements for storage (e.g. compression, gas processing),
and CO2 produced as a result of CO2 breakthrough and / or CO2 produced as part of the
original gas composition of the incrementally produced gas.
In this analysis it is assumed that the produced natural gas is supplied to a power station
with capture (Figure 4.1). Thus, the emissions from burning the incrementally produced
gas are accounted for in the power station emissions. During Storage-ICBM energy is
99
primarily required for gas compression (CO2 and natural gas). Energy requirements for
processing of the incrementally produced gas are considered negligible and thus not
accounted for. The storage emissions can therefore be written as
Power station
CO2, ICBM = ∆CO2,Combustion + ∆CO2,Compr , NG + CO2,Compr , Inj + ∆CO2,Pr od . (4.9)
∆CO2,Energy
The calculation of CO2 emissions is presented in section 4.3 and section 4.4.
4.2.3 CALCULATION OF THE SPECIFIC COST OF CO2 AVOIDED
The specific cost of CO2 avoided is commonly used to present CCS economics. The
specific cost is the discounted CCS net cash flow, as described above in section 4.2.1,
normalised over the discounted CO2 avoided (section 4.2.2). This is described by Eq.
(4.10) which is a detailed formulation of Eq. (4.1) [Allinson et al., 2012].
k ( R − C$ )CCS ,i
∑ (1 + d )
i =1
i
SCCO2 = × ( −1) (4.10)

n( CO )
∑ (1 + d )
2, avoided CCS ,i
i
i =k
This formulation allows for variations in costs and revenues as well as in the amount of
CO2 avoided from year to year. Discounting the net cash flow and the CO2 avoided
enables the effect of time on the project value to be incorporated in the analysis.
The concept of discounting a commodity rather than a cash flow may initially appear
abstract. However, not discounting the CO2 avoided in CCS would lead to significant
underestimates of the specific cost of CO2 avoided. This is because once a monetary
value is applied to CO2, the CO2 that is avoided later during the project has a smaller
present value than CO2 that is avoided now. In other words, a tonne of CO2 avoided
later is worth less than a tonne avoided now. This is taken into account by using the
NPV of CO2 avoided for the specific cost calculations.
100
4.3 CO2 CAPTURE AND ITS COSTS
The capture details depend on the type and size of the power station the CO2 is captured
from. In Australia, typical power stations are either natural gas fired or most commonly
coal fired (black pulverised coal or brown coal). Even though power stations exist in all
sizes, generally, depending on the energy requirements of the region or the proximity to
fossil fuels, a 500 MW net output has been recommended for the evaluation of capture
economics in Australia [Allinson et al., 2012]. The standard size for CCS analysis
recommended by the International Energy Agency (IEA) is currently 750 MW [IEA,
2003]. However, the smaller size is thought to better represent Australian conditions.
Relevant for the economic analyses of CO2 capture are (a) the cost of capture and (b)
the CO2 emissions balance. The emissions balance includes the original emissions from
the power station, the emissions generated during the capture process, and the quantity
of CO2 captured. This data is used to determine the amount of CO2 that is avoided by
application of the capture process.
4.3.1 THE CO2 BALANCE
The CO2 emissions intensity of a power station depends on the thermal efficiency and
the flue gas composition. Because natural gas fired power stations generally have higher
thermal efficiencies than coal fired power stations and the CO2 content in the flue gas is
lower, they are less emissions intensive. The annual CO2 emissions from a power
station can be calculated using Eq. (4.11). Data required for Eq. (4.11) is presented in
Table 4.1 and is representative of 500 MW natural gas combined cycle (NGCC) power
stations and 500 MW black pulverised coal (PC) power stations.
CO2,PS = Pout ⋅ E ⋅ tOp (4.11)
E is the CO2 emissions intensity, tOp is the operating hours determined by the load
factor, and Pout is the power output of the power station in MW.
101
Table 4.1: Characteristics of typical 500 MW net output NGCC and PC power stations without
capture [Ho, 2007].
500 MW NGCC 500 MW PC

Thermal efficiency, % 42 35
Load factor, % 85 85
CO2 emission intensity, t/MWh 0.373 0.878
CO2 emitted by power station, Mt/yr 1.39 3.27
Flue gas composition
Carbon dioxide (CO2), % 9 13
Nitrogen (N2), % 83 75
Oxygen (O2), % 5 5
Water (H2O), % 3 12
SOx, ppm 2 200
Different technologies for the capture of CO2 are currently under development such as
chemical absorption, pressure swing adsorption, and gas separation membranes. At this
point in time the most advanced of these technologies which is expected to be available
on a commercial scale in the near future is chemical absorption. A range of solvents are
commercially available with others actively being developed. At the time of writing, the
‘best’ commercially available solvent is KS1 developed by Mitsubishi Heavy Industries
[Mimura et al., 2000] and this is the solvent upon which the economic calculations of
CO2 capture in this thesis will be based. The CO2 capture rate defined in the IEA
methodology is 90% [IEA, 2003] which is also the rate adopted for this thesis.
Current CO2 capture processes are very energy intensive and thus impose a significant
energy penalty on existing power plant operations. The IEA [2003] recommends
keeping the net output of a power station fixed and upgrading the power station to meet
the additional power requirements caused by the capture process. This is the also the
standard used by the CO2CRC [Allinson et al., 2012] and thus also adopted in this
thesis.
The CO2 avoided in capture is the difference between the original CO2 emitted without
the capture process (i.e. the power station without capture as described by Eq. (4.11))
and the CO2 emitted with the capture process (i.e. power station with capture) as shown
in Eq. (4.12).
102
CO2,avoided = CO2, PS − CO2, PSwCapture (4.12)
The CO2 avoided is a theoretical quantity used to determine the specific cost of CCS.
The CO2 captured, however, is the physical quantity that is to be stored in a geological
formation less fugitive losses incurred during compression and along the pipeline to the
storage site. Here, the CO2 captured is 1.46 Mt/yr and 3.99 Mt/yr for the 500 MW
NGCC and the PC power station respectively (Table 4.2). Table 4.2 shows the original
CO2 emissions from the power station, the emissions when the capture process is
applied, the CO2 avoided, and the CO2 captured. The presented data were derived using
the CO2CRC’s techno-economic capture model [Ho, 2007]. The model calculates the
capital and operating costs of the capture system, the CO2 emitted and avoided in
capture, as well as the specific cost of CO2 avoided in capture based on the specified
power station type, size, and capture technology. The results are used as inputs for the
CCS-DCF model.
Table 4.2: The CO2 balance for the 500 MW net output NGCC and PC power stations using
absorption with KS1 solvent [Ho, 2007].
NGCC PC
Capture technology Absorption/KS1 Absorption/KS1
CO2 produced and emitted without
1.39 3.27
capture, Mt/yr
CO2 produced with capture, Mt/yr 1.62 4.58
CO2 captured, Mt/yr 1.46 4.12
CO2 emitted with capture, Mt/yr 0.16 0.46
CO2 avoided, Mt/yr 1.23 2.81
4.3.2 THE COST OF CAPTURE
In addition to the CO2 balance, the costs associated with CO2 capture are necessary for
the economic evaluation. Table 4.1 and Table 4.2 show that the CO2 emissions
associated with power generation vary greatly because of the intrinsic differences
between the power station types. Consequently, this also applies to power station and
capture costs which are shown in Table 4.3 and were derived using the CO2CRC’s
model [Ho, 2007]. Table 4.3 shows that the capture costs are significantly higher for the
PC than for the NGCC power station (based on a coal price of A$1.34/GJ and a natural
103
gas price of A$4.20/GJ). The amount of CO2 avoided is also more than twice as high for
the PC than for the NGCC power station. This is reflected in the capture costs as a
larger flue gas stream needs to be treated.
Table 4.3: Typical costs and prices for CO2 capture from 500 MW net output NGCC and PC power
plants using absorption with KS1 solvent [Ho, 2007].
NGCC PC
Capex power plant, A$M 111 216
Opex power plant, A$M/yr 29 36
Capex capture, A$M 433 643
Opex capture, A$M/yr 28 68
Gas price / Coal price, A$/GJ 4.20 1.34
For the 500 MW NGCC power station using the data summarised in Table 4.2 and
Table 4.3 the specific cost of CO2 avoided in capture is A$89.94/t. This is representative
of a capture project life of 25 years as suggested in the CO2CRC methodology
[Allinson et al., 2012].
4.3.3 CO2 AS A UNIT COST
To allow evaluation of storage economics when storage and capture constitute two
independent projects (i.e. they are not carried out by the same operator or owned by the
same company), CO2 has to be assumed as an operating cost based on the quantity of
CO2 injected. This is the general approach used in CO2-ECBM literature [Wong et al.,
2000; Jikich et al., 2004; Gorucu et al., 2005; Reeves et al., 2005] and also the approach
chosen in this thesis. The advantage of this method is that the Storage-ICBM project can
be treated as an autonomous entity and CO2 source and sink do not have to constitute a
perfect match with respect to injection volume and / or project life. The captured CO2
can be supplied to several storage sinks at the same capture unit cost. The storage site
under evaluation is not required to store all the CO2 captured while still paying a
representative CO2 price.
The cost at which CO2 is purchased or sold is a function of the emission source and the
capture technology applied. Similarly to the determination of the specific cost of CO2
104
avoided, to obtain the capture unit cost the NPV of the capture project is divided by the
discounted quantity of CO2 captured. This is expressed in Eq. (4.13) and Eq. (4.14).
NPVCapture
UCCO2 = (4.13)
NPVCO2 ,captured
k ( C$ )Capture,i
∑
(1 + d )
i
i =1
UCCO2 = × ( −1) (4.14)
n ( CO )
∑
2,captured i
(1 + d )
i
i =k
where UCCO2 is the unit cost of CO2 captured, CO2,captured is the quantity of CO2
captured and CCapture are capital and operating costs of capture.
Applying the method described above to the 500 MW NGCC power station from
section 4.3 and assuming a capture plant project life of 25 years [Allinson et al., 2012]
the unit cost is A$72.35/t of CO2 captured. These are purely the costs of CO2 capture
and do not include any revenues for the capture project.
4.4 CO2 STORAGE AND ITS COSTS

In the methodology adopted for this thesis the storage process begins when the CO2
leaves the capture plant at atmospheric pressure and ends with the sale of processed and
compressed natural gas to a power station or an alternative point of sale. This section
describes the individual components of the Storage-ICBM project as they are calculated
in the DCF model. It is important to note that because the storage economics are an
increment to primary recovery economics, the costs and equations described below have
to be applied to both the primary (CBM) and the enhanced recovery scenario (CO2-
ECBM) to obtain Storage-ICBM economics. This was described in section 4.2.1.
4.4.1 SCALING COSTS
The component costs used for the economic evaluation are estimated based on prices
and correlations reported in the literature and through personal communications with
industrial vendors and other researchers. Reported costs generally vary due to
105
differences in flow rate / plant size and cost year. Therefore, to obtain better estimates
the published numbers are adjusted to fit the project scale and the current cost year.
Because of economies of scale, unit costs generally decrease with increasing plant size
or flow rate. For chemical engineering processes a scaling factor of 0.7 is usually
applied [Peters and Timmerhaus, 1991]. In addition, using the methodology from the
CO2CRC [Allinson et al., 2012] a factor of 0.6 is used to scale the cost of compressors,
gas dehydration, and CO2 removal facilities and a factor of 0.85 to determine the cost of
a power station. The application of the scaling factor is demonstrated in Eq. (4.15).
SF
 Qj 
C j = Cref ⋅  (4.15)
 Qref
 
To adjust past costs to the current cost year, a cost index similar to a consumer price
index is applied. Adjusting Eq. (4.15) to the current cost year yields Eq. (4.16).
SF
 Qj  CI i
C j = Cref ⋅  ⋅ (4.16)
 Qref
  CI ref
Cn is the cost of component n, Cref is the literature reference cost of component n, Qn is

the flow through component n or size of plant n, Qref is the literature reference flow
through component n or size of reference plant, SF is the scaling factor, CIi is the cost
index of year i, and CIref is the cost index of reference year i.
Cost indices can vary significantly between different industries. In this thesis
IHS/CERA’s Upstream Capital Cost Index (UCCI) and the Upstream Operating Cost
Index (UOCI) [IHS/CERA, 2012] are applied to the storage and injection operations
while for gas processing operations (i.e. the capture plant) the Chemical Engineering
Plant Cost Index (CEPCI) is used.
4.4.2 PRODUCTION AND INJECTION WELLS
Wells are typically the largest cost item in CBM operations. Coal reservoirs are
generally shallow (implying low reservoir pressures) and exhibit comparatively low
permeabilities, thus requiring a large number of wells to extract commercial quantities
of gas. As with most cost items, the costs of drilling a well are difficult to predict and
can vary considerably from well to well within the same CBM development. Leamon
106
[2006] studied numerous well reports to derive a correlation approximating the costs of
vertical wells. The result is presented in Eq. (4.17).
 DI 
C DW = 54.878 ⋅ exp1.1273 ⋅  (4.17)
 1,000 
CDW is the costs for a development well in thousand A$ and DI is the drilled interval in
metres.
Leamon derived Eq. (4.17) based on 2006 costs. In this study the IHS/CERA Upstream
Capital Cost Index (UCCI) is used to adjust Eq. (4.17) [IHS/CERA, 2012] to estimate
current well costs. This is demonstrated in Eq. (4.18).
 DI 
CV / HW = 54.878 ⋅ exp 1.1273 ⋅ ⋅ (1 + UCCI ) (4.18)
 1, 000 
In this thesis, Eq. (4.18) is used to calculate the costs of both vertical wells and
horizontal injection wells. In the case of horizontal wells the variable DI accounts not
only for the vertical depth but also for the horizontal length. Horizontal production wells
require a vertical section as well as a horizontal section. Thus, for horizontal production
wells Eq. (4.18) is modified to include the costs of an additional vertical section
connecting to the horizontal well section as demonstrated in Eq. (4.19).
  DI   DI 
C HPW = 54.878 ⋅ (1 + UCCI ) ⋅ exp1.1273 ⋅ Hor +Ver  + exp1.1273 ⋅ Ver  (4.19)
  1,000   1,000 
Figure 4.6 shows 2011 costs for a vertical well, a 1,000 m horizontal producer, and a
1,000 m horizontal injector as a function of depth calculated using Eq. (4.18) and (4.19).
107
2.5
Vertical w ell
Well costs, A$MM 2.0 Horizontal injector (1,000 m)
Horizontal producer (1,000 m)
1.5
1.0
0.5
0.0
0 200 400 600 800 1,000 1,200 1,400
Vertical Depth, m
Figure 4.6: Drilling and completion costs (2011) for vertical wells, 1,000 m horizontal production
wells, and 1,000 m horizontal injection wells as a function of depth.
To reflect the differences in costs caused by well depth and length, well operating costs
are estimated as 4% of capital costs based on the CO2CRC methodology for compressor
fixed operating costs [Allinson et al., 2012]. Costs for downhole equipment (pumps) for
production wells have been quoted by Leamon [2006] as A$90,000/well and costs for
well workovers from producer to injector were given by Massarotto et al. [2006] as
A$100,000/well, all as of 2006. The costs were adjusted to 2011 terms using the UCCI
and are summarised in Table 4.5 (section 4.6.1).
To enhance gas recovery, vertical wells are generally fracture stimulated to improve the
connection between well and reservoir and / or the permeability around the well.
Leamon [2006] reports that in the Sydney Basin hydraulic fractures were done at a cost
of A$100,000/well. However, in the Bowen Basin hydraulic fracturing costs between
A$150,000/well – A$250,000/well [Leamon, 2006]. Thus, for this analysis the average
value of A$150,000/well (A$2006) is used and adjusted to be representative of 2011
costs (Table 4.5, section 4.6.1).
108
4.4.3 PIPELINES
Two basic types of pipelines exist; (a) transmission lines and (b) gathering / distribution
lines (flowlines). Transmission lines are larger than gathering or distribution lines and
are used to move large quantities of gas from one point to another generally over many
kilometres distance, i.e. from a gas processing plant to a point of sale or from a capture
plant to an injection site. In the analysis in this thesis the power station is assumed to be
located on site. Thus, transmission lines are not required.
Gathering lines transport the natural gas stream from the wellhead to a processing
facility. Gathering systems generally consist of several low pressure (0 - 3,500 kPa or
0 – 500 psia) lines with diameters between 100 and 200 mm (4 and 8 inches) [Manning
and Thompson, 1991]. Distribution lines are similar to gathering lines, but serve the
purpose of distributing CO2 from the central collection facility or main transmission line
to the injection wells. Distribution and gathering lines will be referred to as flowlines
from here on.
For natural gas and CO2 flowlines a lump sum of A$150,000/well in A$2006 is
assumed (adjusted to A$2011 applying the UCCI) based on an estimate from Leamon
[2006] for CBM gathering systems in Australia. This sum also includes the costs of
water disposal and natural gas and CO2 compression / expansion at the wellhead, if
necessary.
4.4.4 CO2 AND NATURAL GAS COMPRESSION
Compression is required for both the captured CO2 and the produced natural gas. CO2
exits the capture plant at atmospheric pressure and is compressed to the necessary
injection pressure. Contrary to the CO2CRC methodology [Allinson et al., 2012], the
compression of CO2 is not included in the cost of CO2 capture but accounted for in the
cost of Storage-ICBM as illustrated in Figure 4.1. If CO2 injection occurs at a constant
rate, the injection pressure can vary and, depending on changes in reservoir permeability
and pressure, decrease or increase over time. However, to simplify the economic
analysis compression to a constant injection pressure of 8,000 kPa is assumed for this
thesis.
109
Natural gas compression is required to achieve specified power station inlet pressures.
The average compressor inlet pressure is assumed as 500 kPa based on the capacity of
commonly used wellhead compressors [TWC, 2009; Emerson Electric Company, 2008].
The inlet pressure to the power station is specified as 3,000 kPa [DOE/NETL, 2007],
which means work is required to compress the natural gas from 500 to 3,000 kPa. In
comparison, gas sales into a pipeline require pressures up to 15,000 kPa [Edgar, 2005].
The work WComp required to compress gas to the desired pressure is calculated using Eq.
(4.20).
kav −1
 
zRconstTav kav   pout  kav
WComp = mɺ ⋅ ⋅ ⋅   − 1 (4.20)

M mηis kav − 1   pin  

 
To increase process efficiency the compression ratio should be less than six per stage
which means generally more than one stage is required to achieve the necessary outlet
pressure. In this study ratios of 3.5 to 4 are used which are calculated using Eq (4.21).
Eq. (4.21) can be rearranged to yield the number of stages (Eq. (4.22)), if the
compression ratio is specified.
1
 p  nS
rC =  out  (4.21)
 pin 
p 
ln  out 
p
nS =  in  (4.22)
ln ( rC )
To account for the number of stages and the compression ratio Eq. (4.20) is modified as
shown in Eq. (4.23).
kav −1
zRconstTav kav  kav 
WComp = mɺ ⋅ ⋅ ⋅  rC − 1 ⋅ nS (4.23)
M mηis kav − 1  

Once the compression work has been calculated, the capital costs can be estimated by
multiplying the work with a compressor unit cost as shown in Eq. (4.24). The
compressor unit costs used in this thesis were derived within the economic modelling
group of the CO2CRC [Allinson et al., 2012].
CComp = WComp ⋅ UCComp (4.24)
110
In agreement with CO2CRC methodology [Allinson et al., 2012] the fixed operating
costs are estimated as 4% of capital costs. For this thesis it is assumed that the
compressors are driven by gas fired engines, so that the energy costs, which are equal to
the variable operating costs, are directly determined by the gas price PGas. Assuming a
gas engine efficiency ηEng of 33%, the variable operating costs VOComp are determined
with Eq. (4.25).
WComp
VOComp = ⋅ PGas ⋅ tOp (4.25)
η Eng
Based on the compression work, the emissions associated with CO2 or natural gas
compression CO2,Comp are calculated using Eq. (4.26). For this calculation an average
energy content for CBM (ECBM) of 39 MJ/m3 and a CO2 combustion factor fCO2 of
0.0018 t CO2/m3 CH4 is estimated.
WComp
CO2,Comp = ⋅ f CO2 ⋅ tOp (4.26)
η Eng ⋅ ECBM
4.4.5 GAS PROCESSING
Gas produced from the field is collected at a main processing facility. If the gas is
sufficiently pure, the only processing step required is dehydration. The maximum inert
content (gases such as CO2 and N2) is defined as 7% based on transmission systems
specifications [Vencorp, 2007]. If the inert content (here: CO2) exceeds the specified
limit, gas treatment is necessary. In this thesis the project is abandoned once the CO2
content exceeds 7% so that gas treatment is not required. If the gas was used on site for
power generation, the specifications could be much lower and a CO2 content of about
60% in the produced gas is possible (GE Energy, 2010). However, this scenario is not
considered here.
For the dehydration of natural gas, capital and operating costs were quoted as
US$60,000 per 56,650 m3/d (2,000 MCF/D) and US$0.046/GJ (US$0.055/MCF)
respectively in 1996 [Tannehill, 1996] and are updated within the economic model to
2011 terms. As stated in section 4.2.2, CO2 emissions associated with gas processing are
not included in the DCF model.
111
4.4.6 GAS SALES
Because the power station is not within the system boundaries of the DCF model
(section 4.1 and Figure 4.1), for the CCS-ICBM / Storage-ICBM system the revenue is
based on gas sales to the power station or an alternative point of sales rather than
electricity sales to the network. Here, the input gas price for the power station is the
same as the gas sales price, i.e. the cost of gas for the power station is the same as the
revenue from gas sales for the CO2-ECBM project.
The revenue RGas obtained through gas sales can be calculated using Eq. (4.27).
RGas = PGas ⋅ Vɺ ⋅ ECBM (4.27)
4.5 BASELINE ASSUMPTIONS FOR THE DCF MODEL

Key economic variables used in the DCF model are presented in Table 4.4. The gas
price of A$4.20/GJ is the sales gas price as well as the input gas price for the power
station and the engines driving the compressors. Thus, it defines the variable operating
costs of the NGCC power station as well as the gas compressors as described in section
4.4.4.
An exchange rate of 0.75 is used to convert literature or quoted costs from US$ to A$.
This is an average rate that takes into account the significant variations in exchange
rates over the past 10 years (ranging from approximately 0.52 to 1.08 US$/A$) as
shown in Figure 4.7.
112
1.1
1
0.9
US$/AU$
0.8
0.7
0.6
0.5
0.4
Apr-01 Jan-04 Oct-06 Jul-09 Apr-12 Dec-14
Date
Figure 4.7: Foreign exchange rate between A$ and US$ from January 2002 until April 2012 (data
from X-Rates [2012]).
Abandonment costs only apply to CBM and Storage-ICBM. It is assumed that the
capture equipment can be salvaged and the revenue obtained is sufficient to cover the
cost for the restoration of the capture site. With regards to storage the main component
of the process are wells which implies the opportunities for cost recovery are negligible
and the costs for site restoration have to be accounted for. Abandonment costs are
estimated as 25% of capital costs in accordance with the CO2CRC methodology
[Allinson et al., 2012].
The unit cost for the CO2 that is to be injected (the CO2 cost) is a function of the power
station type, size, and project life as well as the chosen capture technology. It is
discussed later in section 4.6.1 which describes the case specific assumptions.
As of July 2012 a carbon tax is in place in Australia which has the price of carbon set at
A$23/t for the first three years after which the price is allowed to float [Maher, 2012]. In
this chapter, however, it is assumed that the CO2 price is $0/t meaning there is no
incentive for storing CO2. This is to highlight the costs of CCS-ICBM / Storage-ICBM
and enable comparison on an international level (to account for the different degrees of
incentives provided, or complete lack thereof, in other countries). The effect of a net
CO2 price is considered later in this thesis (Chapter 6 and Chapter 7).
113
Table 4.4:Baseline parameters used in the DCF model for the economic evaluation of CCS/Storage-
ICBM.
Variable Value Reference

Cost year 2011
CO2CRC
Real discount rate 7%
[Allinson et al., 2012]
CO2CRC
Construction period for capture 2 years
Construction period for storage 1 year
CO2CRC
Exchange rate: A$1 US$0.75
CO2CRC
Fees & Owners cost 7% of EPC
10% of direct and CO2CRC
Contingency
indirect costs [Allinson et al., 2012]
Abandonment costs – CO2CRC
25% of Capital Cost
storage only [Allinson et al., 2012]
CO2CRC
Gas price A$4.20/GJ
CO2 price A$0/t
Unit cost based on power CO2CRC
CO2 cost
station size and type [Ho, 2007]
4.6 ECONOMICS OF CCS-ICBM / STORAGE-ICBM AT SPRING

GULLY
The previous sections described the methodology used in the DCF model to derive the
economics of CCS-ICBM and Storage-ICBM for this thesis. In this section, the DCF
model is applied to the Spring Gully simulation case study presented in Chapter 3. The
results of the simulation study are used as inputs for the DCF model together with other
case specific assumptions. These are described in the next section. In the subsequent
section the economic evaluations of both CCS-ICBM and Storage-ICBM at Spring
Gully are presented.
114
4.6.1 CASE SPECIFIC ASSUMPTIONS
The reference point for CCS-ICBM at Spring Gully is a 500 MW net output NGCC
power station as described in section 4.3. The power station is assumed to be located on
site for the Spring Gully case study (as shown in Figure 4.1) so that no transportation
costs are incurred. This is a realistic option considering CBM reserve estimates of 1,493
PJ and 1,723 PJ of 2P and 3P reserves respectively for Spring Gully as of June 2008
[AGL, 2008]. The CO2 unit cost is A$72.35/t of CO2 based on the specified power
station type, size, and capture technology (see section 4.3). The annual CO2 captured
from this power station is 1.46 Mt (Table 4.2).
To inject 1.46 Mt/yr of CO2 100 vertical injection wells are drilled, each injecting
approximately 22,000 m3/d. The project life of CCS-ICBM / Storage-ICBM is finished
when a CO2 breakthrough concentration of 7% is exceeded. Production occurs from 100
vertical production wells. The well costs were derived using Eq. (18).
The case specific assumptions for CCS-ICBM / Storage-ICBM at Spring Gully are
summarised in Table 4.5. All costs are derived as described in section 4.4 and are
presented in 2011 real terms. The cost for the ECBM compressor is higher than for the
CBM compressor due to the significantly higher peak production volumes achieved
during ECBM (see Chapter 3, section 3.4.3).
The analysis does not include taxes. The effect of taxes on the economics is discussed in
section 4.6.5.
115
Table 4.5: Case specific parameters for the economic evaluation of CCS-ICBM / Storage-ICBM at
Spring Gully in A$2011 real terms.
Item Value
Power station type NGCC
Power station size (net output) 500 MW
Project life for capture 25 years
CO2 captured 1.46 Mt/yr
CO2 unit cost A$72.35/t
CO2 injected 22,000 m3/d
Injection pressure (max. 15,000 kPa) 8,000 kPa
Storage-ICBM project life CO2 breakthrough > 7%
Production well number (CBM) 100
Injection well number (Storage-ICBM) 100
Producer well + pump (800 m vertical) A$M0.42/well
Injection well (800 m vertical) A$M0.30/well
Hydraulic fracture for producer well A$M0.20/well
CO2 compressor A$M31
CBM compressor A$M21
ECBM compressor A$M30
4.6.2 ECONOMIC EVALUATION OF CCS-ICBM AT SPRING GULLY
A cash flow analysis of the Spring Gully case study is shown in Figure 4.8 and
summarised in Table 4.6. The results are representative for the production rates
presented in Chapter 3, section 3.5.3, Figure 3.17.
116
200
2 2
kmkm
150 CBM
A$M/100 CCS-ICBM
100 CO2-ECBM
A$M/100
Storage-ICBM
50
flow,
0
flow,
-502010 2020 2030 2040 2050 2060 2070

cash
-100
cash
Net net
-150
Annual
-200
-250
Project life, years
Figure 4.8: Net cash flow over time for primary recovery (CBM), enhanced recovery (CO2-ECBM),
CCS-ICBM, and Storage-ICBM.
Table 4.6 shows the results for the CBM scenario, the CO2-ECBM scenario, the CCS-
ICBM scenario, and the Storage-ICBM scenario. CCS-ICBM is the sum of capture and
Storage-ICBM while CO2-ECBM is the sum of CCS-ICBM and CBM (see section 4.2.1
and Figure 4.4). As indicated in Chapter 3, the CO2 breakthrough concentration of 7% is
observed at the production wells after 17 years which represents the end of the CCS-
ICBM project.
Table 4.6: Results of the cash flow analysis of CCS-ICBM at Spring Gully. CCS-ICBM is the
incremental project and thus the sum of capture and Storage-ICBM. CO2-ECBM is the sum of
CBM and CCS-ICBM.
Item Unit CBM CCS-ICBM CO2-ECBM

Revenue A$M 1,430 310 1,740
Gas sales A$M 1,430 310 1,740
Costs A$M 389 2,002 2,391
CBM A$M 389 n/a 389
Capture/CO2 costs A$M n/a 1,796 1,796
Transport A$M n/a n/a n/a
Storage-ICBM A$M n/a 206 206
Net Cash Flow A$M 1,041 -1,692 -651
NPV A$M 549 -823 -275
CO2 emitted without CCS Mt 2.05 23.58 23.58
CO2 emitted with CCS Mt n/a 3.64 3.64
CO2 avoided Mt n/a 19.94 19.94
NPV CO2 avoided Mt n/a 10.01 10.01
Specific Cost CO2 avoided A$/t n/a 82.22 27.47
117
As for this analysis it is assumed that no emissions related incentive is provided, the
only benefit from CO2 injection is achieved through incremental gas production.
Through the application of CCS-ICBM to the existing CBM project, revenues from gas
sales increased by 22% from A$M1,430 to A$M1,740. This means the revenue obtained
in CCS-ICBM through the recovery of incrementally produced gas is A$M310.
The cumulative capital and operating costs of CCS-ICBM are A$M2,002. Of these 90%
are capture costs and 10% are costs of CO2 compression and storage. As in this analysis
there are no financial incentives provided for storing, capturing, or avoiding CO2,
overall the CCS-ICBM project makes a loss. The project NPV is A$M-823.
The annual emissions from a 500 MW NGCC without capture were estimated as
approximately 1.39 Mt (see Table 4.2). Over 17 years this is 23.58 Mt. Through the
implementation of CCS-ICBM the cumulative emissions can be reduced to 3.64 Mt.
This includes CO2 emissions associated with both the capture process and Storage-
ICBM. Thus, the cumulative CO2 avoided through the implementation of CCS-ICBM is
19.94 Mt with a present value of 10.01 Mt. This yields a specific cost of CO2 avoided in
CCS-ICBM of A$82.22/t. A detailed CO2 balance is shown in Table 4.7.
Table 4.7: CO2 balance for CCS-ICBM at Spring Gully.
Unit Power Station Capture Storage-ICBM

CO2 emitted without capture Mt 23.58 n/a n/a
CO2 captured Mt n/a 24.82 n/a
CO2 injected Mt n/a n/a 24.82
CO2 emitted with CCS Mt n/a 2.72 0.92
CO2 avoided Mt n/a 20.86 19.94
In Table 4.7 the CO2 emitted without capture is smaller than the CO2 captured (23.58
Mt compared to 24.82 Mt). This is because the net output from the power station is
maintained at a constant value of 500 MW both with and without capture (see section
4.3.1), but the gross energy requirements of the power station increase when the capture
plant is added and thus more CO2 is generated.
118
It is assumed that all the CO2 captured is injected, i.e. 24.82 Mt over 17 years. Fugitive
losses of CO2 during transport and injection are considered negligible and thus set as
zero. The emissions associated with capture are the result of the capture rate being less
than 100% (the assumed capture rate is 90%). The primary contributor to Storage-
ICBM emissions is the CO2 generated by CO2 compression. The CO2 avoided during
capture is 20.86 Mt which decreases slightly to 19.94 Mt when the emissions from
Storage-ICBM are included to obtain the CO2 avoided for CCS-ICBM.
Table 4.6 demonstrates that in spite of the revenue obtained from incremental gas sales
CCS-ICBM is not economically viable under the assumed conditions; the costs for CO2
capture are high, but no incentives for capturing, avoiding, or storing CO2 are provided
(with the exception of incremental CBM recovery). Figure 4.9 presents a split of the
specific cost of CO2 avoided over capture and Storage-ICBM. It illustrates that Storage-
ICBM adds value to the CCS-ICBM project and effectively reduces the specific cost of
CO2 avoided. The cost of CO2 avoided in capture is A$89.94/t, the cost of CO2 avoided
in Storage is A$-7.72/t. This results in a cost of CO2 avoided in CCS-ICBM of
A$82.22/t.
If the Australian carbon tax of A$23/t was to be included in the analysis in form of a
penalty applicable to all CO2 emissions such as those from the NGCC, the capture plant,
the CBM project, and the CO2-ECBM project, the specific costs of CO2 avoided would
decrease from A$82.22/t to A$59.21/t. The specific costs decrease, because the CO2
emissions avoided from the NGCC represent a net cost saving equivalent to the amount
of 20 Mt of CO2 (Table 4.6). The result implies that a tax of A$23/t is not sufficient to
make CCS economically sustainable using currently available technologies.
119
$89.94
90 $82.22
Specific Costs of CO 2 avoided, A$/t 80
70
60
50
40
30
20
10
0
-$7.72
-10
CCS-ICBM Capture / CO2 Storage-ICBM
costs
Figure 4.9: Split of the specific cost of CO2 avoided in CCS-ICBM over CO2 capture and Storage-
ICBM.
4.6.3 SPRING GULLY STORAGE-ICBM ECONOMICS
Excluding capture costs from the analysis to highlight Storage-ICBM economics shows
that both the CO2-ECBM and the Storage-ICBM project would be profitable even
without the carbon tax if CO2 was delivered free of charge. This was indicated in Figure
4.9 and the results are presented in Table 4.8. In Table 4.8 Storage-ICBM is the
difference between CO2-ECBM and CBM (as described in section 4.2.2 and illustrated
in Figure 4.3). However, this analysis has to be considered with care and is meant for
illustrative purposes only. Receiving the benefits from the CO2 that was avoided
through CO2 capture, but not paying for the associated costs is not realistic.
While the CBM project has an economic life of 49 years, the injection of 24.82 Mt CO2
and the associated breakthrough significantly shorten the project life of Storage-ICBM
to 17 years. However, in the shorter time frame more gas is recovered than during
primary recovery and total cumulative recovery increases by 22% corresponding to an
additional 17% of original gas in place recovered (equivalent to 1,890 Mm3 of CH4).
This highlights the upside of enhanced recovery processes; reservoir sweep is improved
(here: 93%) and gas recovery is accelerated. The incremental revenue for Storage-
ICBM is A$M310. This is more than sufficient to offset the costs of storage (A$M206).
120
The net revenue of Storage-ICBM has a NPV of A$M77. As the CO2 avoided is
unchanged, the specific cost of CO2 avoided in Storage-ICBM is calculated as A$-
7.72/t. The negative specific cost indicates that a positive return is received for every
tonne of CO2 avoided. In this case, the indirect revenue resulting from each tonne of
CO2 avoided is A$7.72.
Table 4.8: Details of Storage-ICBM at Spring Gully. Costs for purchase or supply of CO2 are not
included.
Item Unit +CBM =

Storage-ICBM CO2-ECBM
Project life years 49 17 17
CO2 injected Mt n/a 24.82 24.82
Reserves / recovered CH4 Mm3 8,730 1,890 10,620
Recovery Factor, % of GIP % of GIP 76.8 16.6 93.4
Revenue A$M 1,430 310 1,740
Costs A$M 389 206 595
Net Cash Flow A$M 1,041 103 1,145
NPV A$M 549 77 626
NPV CO2 avoided Mt n/a 10.01 10.01
Specific Cost CO2 avoided A$/t n/a -7.72 -62.52
The maximum CO2 purchase price the project could afford while remaining financially
viable is A$6.21/t of CO2 injected. At this CO2 price the NPV of CCS-ICBM at Spring
Gully would be zero. The purchase price of A$6.21/t corresponds to 8.5% of the actual
purchase price of A$72.35/t. In other words, the cost of CO2 would have to decrease by
91.5% for CCS-ICBM at Spring Gully to be economic without any external incentives.
4.6.4 THE INDIVIDUAL COST COMPONENTS OF CO2 STORAGE AT

SPRING GULLY
The individual components contributing to the total costs of Storage-ICBM are listed in
Table 4.9. The costs for the CBM and the CO2-ECBM project (exclusive of capture /
CO2 costs) are also shown. As described in section 4.2.1 and 4.2.2, the costs of Storage-
ICBM are the difference between the costs of CO2-ECBM and CBM when capture costs
are excluded from the analysis, or, expressed differently, the sum of the costs of CBM
and Storage-ICBM are the costs of CO2-ECBM.
121
Table 4.9: Individual components of Storage-ICBM and the associated costs. The costs do not
include capture costs or costs for the purchase or the supply of CO2.
Cost Components Unit CBM + Storage-ICBM = CO2-ECBM

Well capex A$M 63.50 31.53 95.03
Well opex A$M 124.46 -59.84 64.62
CO2 compression capex A$M n/a 31.05 31.05
CO2 compression opex A$M n/a 140.14 140.14
CH4 compression capex A$M 21.40 8.86 30.26
CH4 compression opex A$M 73.21 -14.61 58.60
Flowlines capex A$M 19.98 19.98 39.96
Flowlines opex A$M 9.79 -3.00 6.79
CH4 dehydration capex A$M 1.36 0.31 1.67
CH4 dehydration opex A$M 34.69 7.66 42.35
Abandonment A$M 21.57 27.93 49.49
Based on the methodology applied to derive the economics of Storage-ICBM, it is

possible that the cumulative costs for some of the components of CO2-ECBM are lower
than for primary recovery. This results in negative costs for Storage-ICBM which is
demonstrated in Table 4.9 and highlighted in Figure 4.10. Here, this is the case for well
operating costs, natural gas compression operating costs, and operating costs for
flowlines. The explanation for the reduction in operating costs lies in the significantly
shortened project life. The economic life of the CBM project is estimated as 49 years,
whereas the CCS and thus the storage project only run for 17 years - 32 years less.
While the individual annual operating costs of these components may be higher for
CO2-ECBM than for CBM, the shorter project life results in lower cumulative operating
costs.
122
150
CBM
Storage-ICBM
CO2-ECBM
100
Project costs, A$M
50
0
x
ex
ex
x
ex
x
ex
x
x
x
pe
pe
pe
pe
pe
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ap
op
op
op
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ca
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ca
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es
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tio
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tio
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W
lin
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ow
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-50
de
m
m
co
de
co
co
co
BM
2
BM
BM
2
BM
O
C
C
C
C
-100
Figure 4.10: Comparison of cumulative capital and operating costs for different components of the CBM, the CO2-ECBM, and the Storage-ICBM project. Here,
CO2-ECBM = CBM + Storage-ICBM. The well capital costs include costs for pumps and stimulation for production wells. Flowlines refer to both CBM gathering
and CO2 distribution lines.
123
Figure 4.10 highlights which components contribute the most to the total costs of
Storage-ICBM. By far the largest cost associated with CO2 storage in coal seams is CO2
compression. The costs are representative for compression from atmospheric pressure at
which the CO2 exits the capture plant to an injection pressure of 8,000 kPa. The
combined cost of CO2 compression is A$M171.19. This includes both capital and
operating costs over the project life of 17 years. Abandonment costs for compression are
not included but are listed separately in ‘Abandonment’. The A$M171.19 correspond to
83% of the total costs of Storage-ICBM or 29% of the total costs of CO2-ECBM. When
the cost of purchasing CO2 is included, costs of CO2 compression correspond to 8.5% of
the total costs of CCS-ICBM and to 7% of the total costs of CO2-ECBM.
The next largest cost items are well capital costs (A$M32), capital expenditure for the
CO2 compressors (A$M31), and abandonment costs (A$M28). Because no additional
production wells are drilled for the CCS project, the well capital costs for Storage-
ICBM are representative of the costs of 100 new injection wells. Though it is the same
number of wells, the well capital costs for the CBM project are significantly higher.
This is because the production wells are hydraulically fractured and have downhole
pumps for pressure drawdown.
4.6.5 THE AUSTRALIAN TAX REGIME AND ITS EFFECT ON CCS /

STORAGE-ICBM ECONOMICS
The initial economic analysis of CCS at Spring Gully is exclusive of any form of taxes.
In this section the effect of the Australian tax regime including income tax, the
Petroleum Resource Rent Tax (PRRT), as well as the carbon tax as they apply in
Australia in 2012 is evaluated. First, the impact of the PRRT and the income tax only is
evaluated. This is followed by an analysis that includes the effect of the carbon tax.
Formerly, the PRRT only applied to petroleum projects in offshore areas (or
Commonwealth adjacent areas), but on 1 July 2012 the PRRT was extended to cover all
Australian oil and gas projects whether they are onshore or offshore (Australian
Government, 2012). Before this, all onshore projects were subject to income taxes as
well as state and potentially private royalties which were payable as a percentage of the
wellhead value. This implied that even if a company reported losses in any one year,
royalties still applied. With the PRRT a company or project only pays taxes if its profit
in the respective financial year is positive. However, for the newly included onshore and
offshore projects existing royalties and production excises will continue to apply, but
will be creditable against future PRRT liabilities.
The main features of the PRRT are (ATO, 2012):

Payments of PRRT and all project expenditures are income tax deductible. This
includes exploration, project development, and operating costs.
Abandonments costs are deductible in the year they are incurred. A refund of
any previous PRRT payments is provided where revenues in that year are
inadequate to cover the cost of abandonment.
Undeducted exploration expenditure can be transferred to other projects with a
notional taxable profit held by that project.
All undeducted expenditures are eligible for compounding and the compounded
amount can be deducted against future profits.
This section demonstrates how the PRRT and the income tax affect the economics of
CCS-ICBM and Storage-ICBM at Spring Gully. The project is considered as an
independent entity and no tax benefits are derived from the inclusion of past exploration
costs and the compounding of such (as these are not considered in this analysis). In a
company context this would be different and accountants would consider all of the
company’s projects together and transferring exploration costs between projects in a
way that would maximise the financial benefits.
Assuming a new project, no royalty payments apply.
The income tax calculations are based on a capital depreciation period of 10 years
(straight line depreciation) and include loss-carry forward calculations when applicable.
This means losses incurred during the previous financial year are carried forward to the
next financial year to decrease the taxable income. The details are summarised in Table
4.10.
125
Table 4.10: Details for the tax calculations representative of Australian conditions.
Item Value
Petroleum Resource
40% of net cash flow
Rent Tax
Income tax rate 30% of profit
Escalation rate 3%
Nominal discount rate 10%
Depreciation period 10 years, straight line
Loss carry forward? Yes
Carbon tax A$23/t
The effect of the PRRT and the income tax on the economics of CBM, Storage-ICBM,
CCS-ICBM, and CO2-ECBM is summarised in Table 4.11. Because the PRRT payment
is a fraction of the net cash flow rather than the gross revenue, the PRRT does not affect
the life time of the project, the reserves recovered, or the gross revenue.
Table 4.11: Project economics inclusive of PRRT and income tax.
CO2-ECBM CO2-ECBM
Item Unit CBM Storage-ICBM excluding CO2 CCS-ICBM including
costs CO2 costs
Project life Years 49 17 17 17 17
Reserves Mm3 8,730 1,890 10,620 1,890 10,620
Revenue A$M 1,430 310 1,740 310 1,740
Costs A$M 389 206 595 2,002 2,391
+ PRRT payable A$M 455 80 535 -393 62
+ Income tax payable A$M 182 4 186 -177 5
Total costs including tax A$M 1,026 290 1,316 1,432 2,458
After Tax Net Cash Flow A$M 404 20 424 -1,122 -718
After Tax NPV A$M 189 1 186 -825 -347
NPV CO2 avoided Mt n/a 10 10 10 10
Specific Cost CO2 avoided A$/t n/a -0.08 -18.54 82.39 34.67
The analysis highlights that for the CBM, the Storage-ICBM, and the CO2-ECBM
projects the NPV is noticeably decreased through the introduction of taxes when CO2
costs are excluded. For the CBM project, the NPV decreases by A$M360 from A$M549
to A$M189 (see Table 4.6). For Storage-ICBM the decrease is A$M76 from A$M77 to
A$M1, leaving Storage-ICBM only marginally economic. This is reflected in the
specific cost of CO2 avoided in Storage-ICBM which increases from A$-7.72/t to
126
A$-0.08/t, implying that the indirect revenue resulting from each tonne of CO2 avoided
is A$6.64 less than before tax.
To establish the economics of CCS-ICBM, the cost of CO2 have to be included in the
analysis. As the costs of the annual CO2 injected are operating expenses, they are tax
deductible and considerably reduce the tax liability. For the CO2-ECBM project the real
total tax payment is A$M67. Thus, the net cash flow of CO2-ECBM decreases from
A$M-651 before tax to A$M-718 after tax. This corresponds to a reduction in NPV
from A$M-275 to A$M-347.
CCS-ICBM is defined as the difference between CO2-ECBM and CBM. Thus, if the tax
liability for CO2-ECBM is lower than for CBM, the theoretical tax for CCS-ICBM must
be negative. This is only an accounting artefact as in practice CCS-ICBM cannot be
considered or performed on its own without CBM. The NPV of CCS-ICBM decreases
by A$M2 from A$M-823 to A$M-825. Therefore, the specific cost of CO2 avoided in
CCS-ICBM increases only very marginally from A$82.22/t to A$82.39/t.
Through the introduction of the PRRT for onshore oil and gas production that requires
taxes to be paid as a percentage of the net cash flow rather than a percentage of the
gross revenue, taxation has become more efficient. While the royalty system could put
the financial viability of an only marginally economic project at risk, the PRRT ensures
that only projects that show a positive cash flow are taxed. Projects that may have not
gone ahead under the royalty regime are more likely to be financially sustainable under
the PRRT.
The inclusion of the carbon tax in this section is simplistic and for demonstration
purposes only. For this analysis the carbon tax is treated as a CO2 penalty and applies to
all CO2 emissions generated by the projects. This means for each tonne of CO2 emitted
A$23 has to be paid, which is tax deductible. To incorporate the benefits of the carbon
tax into the analysis of CCS-ICBM economics, the original emissions from the power
station have to be considered as well. The net savings in CO2 emissions through the
application of CCS are a revenue stream attributed to the CCS-ICBM project. The
effects of the carbon tax in conjunction with the PRRT and incomes taxes are presented
in Table 4.12. The calculations for Storage-ICBM include neither the capture related
CO2 penalties nor the power station emissions related tax savings.
127
Table 4.12: Project economics inclusive of PRRT, income tax, and carbon tax.
CO2-ECBM CO2-ECBM
Item Unit CBM Storage-ICBM excluding CO2 CCS-ICBM including
costs CO2 costs
Project life Years 45 17 17 17 17
Reserves Mm3 8,629 1,991 10,620 1,991 10,620
Revenue A$M 1,413 327 1,740 327 1,740
Costs A$M 354 241 595 2,037 2,391
+ Carbon tax payable capture A$M n/a n/a n/a 63 58
+ Carbon tax payable (E)CBM A$M 34 10 44 5 44
+ PRRT payable A$M 456 78 534 -406 50
+ Income tax payable A$M 176 9 185 -173 3
Total costs including tax A$M 1,020 338 1,358 1,526 2,546
Carbon tax savings through capture A$M n/a n/a n/a 542 542
After Tax Net Cash Flow A$M 393 -11 382 -657 -264
After Tax NPV A$M 181 -8 269 -297 -116
NPV CO2 avoided Mt n/a 10 10 10 10
Specific Cost CO2 avoided A$/t n/a 0.77 -26.81 29.68 11.60
Most notably, the implementation of the carbon tax decreases the economic life of CBM
by 4 years from 49 years to 45 years which results in a lower NPV, though only
marginally (A$M189 compared to A$M181). With respect to Storage-ICBM the
specific cost increases only marginally from A$-0.08/t to A$0.77/t when the carbon tax
is included. This means Storage-ICBM would not be economically viable anymore.
However, when the whole CCS-ICBM project is considered and thus the cost saving
associated with the CO2 emissions avoided by the capture plant are included, the
positive effect of the carbon tax on CCS economics is demonstrated. The carbon tax
payable by the NGCC power station over the 17 years of the CCS project would amount
to A$M542. This is equivalent to the amount of money saved. However, the NPV is still
negative at A$M-297 for the CCS-ICBM project. The increase in NPV decreases the
specific cost of CO2 avoided from A$82.39/t to A$29.68/t.
4.7 CONCLUSIONS
In this chapter the results from Chapter 3 were used to perform an economic evaluation
of Storage-ICBM and CCS-ICBM at Spring Gully, Bowen Basin. This was to introduce
and demonstrate the methodology used in the DCF model which is applied throughout
this thesis. It was highlighted that it has to be distinguished between CO2-ECBM and
128
CCS-ICBM / Storage-ICBM to be able to assess the benefits of CO2 injection. No
differentiation between these two would lead to an underestimate of the actual cost of
Storage-ICBM and CCS-ICBM. The specific cost of CO2 avoided in CO2-ECBM at the
Spring Gully project is calculated as A$27.47/t (including the costs of purchasing CO2).
However, this includes the benefits from the primary recovery project. The real specific
cost of CO2 avoided when only the costs and benefits from CCS-ICBM are considered
is A$82.22/t.
A purchase price of A$6.21/t of CO2 injected is the maximum cost the CCS-ICBM
project can afford. The estimated purchase price in this analysis was A$72.35/t. The
application of the PRRT and the income tax decrease the NPV of CBM and CO2-ECBM
noticeably while the NPV of CCS-ICBM decreases only marginally. The introduction of
a carbon tax improves the viability of CCS-ICBM, though the value of A$23/t is
currently not sufficient to make CCS at Spring Gully economically sustainable under
the assumptions used in this analysis.
In the next chapter the sensitivity of the project economics to the different cost
components of Storage-ICBM will be investigated. Furthermore, the impact of changes
in reservoir properties on the economics of CCS-ICBM / Storage-ICBM will be
assessed. This is of particular importance as for the reservoir simulation study a
homogenous seam was assumed that used average reservoir properties, though in reality
coal seams are heterogeneous and thus will exhibit local differences in reservoir
properties.
129
5 THE EFFECT OF PARAMETER VARIABILITY ON
STORAGE-ICBM ECONOMICS
In the previous chapters the methodology to assess the economics of CO2 storage in coal
seams was introduced and illustrated on the example for the Spring Gully CBM field.
This chapter evaluates the sensitivity of the analysis to changes in economic parameters
as well as reservoir properties. The analysis will establish the most influential and thus
critical parameters for economic CO2 storage in coals. This knowledge will assist in a)
identifying the most prospective coal reservoirs for CO2 storage; and b) determining
which properties have to be considered for the optimal field development for CO2
storage.
5.1 METHODOLOGY
For the sensitivity analyses the economics of CCS-ICBM and Storage-ICBM are
determined as described in Chapter 4. To evaluate the effect of a selection of economic
parameters, the parameter of interest is varied while all other parameters are unchanged.
Analysing the impact of individual reservoir properties on Storage-ICBM economics
requires reservoir simulation studies of both the primary and the enhanced recovery
process to be performed. With each change in parameter a new reservoir simulation is
carried out so that the effect of CO2 injection can be assessed and Storage-ICBM
economics can be established. For the simulation the maximum CO2 injection rate is set
as 1.46 Mt/yr (approximately 22,000 m3/d) in accordance with the simulation study
presented in Chapter 3. For some cases, for example the low permeability scenarios,
injection at the designated rate may not be possible. In those cases injection will occur
at a maximum pressure of 15,000 kPa.
The results are presented for both Storage-ICBM and CCS-ICBM, though the primary
focus is the evaluation of the sensitivity of Storage-ICBM economics to the different
reservoir properties. The difference between Storage-ICBM and CCS-ICBM is that the
costs for the injected CO2 (the CO2 purchase costs) are not included in the Storage-
ICBM analysis. The CO2 purchase price for CCS-ICBM is estimated as A$72.35/t
based on the 500 MW NGCC described in Chapter 4. The CO2 avoided calculations
130
necessary to determine the specific cost of CO2 avoided are also based on this power
station type and size. No incentive is obtained for the capture and storage of CO2.
5.2 SENSITIVITY TO ECONOMIC PARAMETERS

In this section the sensitivity of the specific cost of CO2 avoided to variations in
component costs as well as energy prices is investigated.
5.2.1 COST SENSITIVITY
The sensitivity of the economics of Storage-ICBM to changes in costs of the individual

storage components is illustrated in Figure 5.1. Because the changes in costs do not
affect the tonnes of CO2 avoided, the rate of change for the specific cost and the rate of
change for the project NPV are the same. Figure 5.1 illustrates that CO2 compression
costs, the largest cost item as identified in Chapter 4 (section 4.6.4, Figure 4.10), have
the largest impact on the specific cost of Storage-ICBM. This is followed by well costs,
costs of flowlines, CBM compression costs and the least dehydration costs. For each
10% increase in CO2 compression costs (in both Capex and Opex) the NPV and thus the
specific cost of Storage-ICBM rises by 13.4%. In comparison, for every 10% change in
well costs, the specific cost changes by only 5.3%. And for the least influential cost
item, dehydration, the specific cost only changes by 0.9% for every 10% change in
dehydration costs.
131
100
Change in NPV / specific cost of

80
Storage-ICBM, % 60
40
20
0
-100 -80 -60 -40 -20-20 0 20 40 60 80 100
-40 CCS - Well co sts

CCS - Flo wlines
-60 CCS - Dehydratio n
CCS - CB M co mpressio n
-80 CCS - CO2 co mpressio n
-100
Change in cost component, %
Figure 5.1: Sensitivity of Storage-ICBM economics to cost changes of the main project components.
In comparison, the specific cost of CCS-ICBM (which includes the costs of CO2
purchase at a price of A$72.35/t – see Chapter 4, section 4.3.3) is less affected by
changes in the individual storage cost components. This is to be expected considering
90% of the total costs of CCS are capture costs (A$M1,796) and only 10% of the costs
are associated with the storage process (A$M206) (see section 4.6.2). Figure 5.2
highlights the effect of changes in storage costs on the specific cost of CO2 avoided in
CCS-ICBM. For a 10% change in CO2 compression costs, the specific cost of CCS-
ICBM changes by 1.3% compared to a change of 13.4% in the specific cost of Storage-
ICBM. The rate of change in well costs decreases from 5.3% to 0.5% for each 10%
change in storage component costs when the CO2 capture costs are included in the
analysis.
132
100
80
Change in NPV / specific cost of
60
40
CCS-ICBM, %
20
0
-100 -80 -60 -40 -20 0 20 40 60 80 100
-20
CCS - Well co sts
-40
CCS - Flo wlines
-60 CCS - Dehydratio n

CCS - CB M co mpressio n
-80 CCS - CO2 co mpressio n
-100
Change in cost component, %
Figure 5.2: Sensitivity of CCS-ICBM economics to cost changes of the main storage project
components.
The analysis implies that significant cost savings can be achieved through the
optimisation of gas compression. CO2 compression is a cost component associated with
great uncertainty as calculation of the required injection pressure is very complex and
requires some unique processes not considered by existing approaches (Lu and Connell,
2008). The weight of the CO2 within the wellbore can significantly contribute to the
bottomhole pressure (BHP) as it is the sum of the injection pressure and the hydrostatic
pressure from the liquid CO2 column in the wellbore. Assuming compression to BHP
overestimates the injection pressure, but it is difficult to assess to what degree.
5.2.2 GAS PRICE SENSITIVITY
Even though it is uncertain how energy prices are going to be affected by the
introduction of a carbon tax or an emissions trading scheme (ETS) in the long term, a
price for carbon is generally expected to lead to a rise in energy prices. This was
observed for electricity prices in many European countries during the first phase of the
European ETS [Reinaud, 2007]. The generators passed on some or all of their costs
incurred by the ETS to consumers.
133
While higher gas prices imply higher revenues for Storage-ICBM, they also mean that
the costs to run the CCS project as a whole or the storage project by itself will increase.
A higher gas price increases the operating costs for the power station, resulting in higher
capture costs. Furthermore, the variable operating costs of CO2 compression are a
direction function of the gas price. Thus, to determine the breakeven gas price (i.e. the
gas price at which the NPV of CCS-ICBM is zero) the effect of the gas price on CCS-
ICBM project costs needs to be considered as well. This is demonstrated in Figure 5.3
which shows the specific cost of CO2 avoided in CCS-ICBM alongside the CO2
purchase price both as a function of rising gas prices. For the Spring Gully CCS-ICBM
project the maximum breakeven gas price is A$128.50/GJ. This includes the increase in
gas sales related revenues as well as the increase in capture and compressions costs. The
CO2 purchase cost corresponding to this gas price is A$488.20/t.
90 900
CO2 purchase price, A$/t

Specific cost of CCS-ICBM
80 CO2 purchase cost 800
Specific cost of CCS-
70 700
60 600
ICBM, A$/t
50 500
40 400
30 300
20 200
10 100
0 0
0 20 40 60 80 100 120 140
Breakeven gas price, A$/GJ
Figure 5.3: The effect of a rising gas price on the specific cost of CO2 avoided in CCS-ICBM and
the CO2 purchase price. The maximum breakeven gas price is $128.50/GJ.
The example above is case specific for Spring Gully where the CO2 is assumed to be
supplied by a NGCC power station which provides energy for capture and storage. If
the CO2 was not purchased from a capture plant driven by gas and the purchase price of
CO2 of A$72.35/t did not change, the break even gas price to compensate for the costs
of CCS-ICBM is A$21.22/GJ. This could be the case if the energy required for capture
134
was supplied by an alternative energy source such as a coal fired power station or wind
or solar power. This way fuel costs for CCS would not be directly affected by changes
in gas prices. It is likely, though, that if a rise in gas prices is experienced, an increase in
fossil fuel prices in general will be observed, particularly where such price increases are
driven by the introduction of a price for carbon.
5.3 SENSITIVITY TO RESERVOIR PROPERTIES
5.3.1 RESERVOIR PROPERTIES AFFECTING PRIMARY RECOVERY
While for primary CBM recovery the most important reservoir properties have been
identified as permeability, gas content, and the methane sorption isotherm [Roadifer et
al., 2003; Zuber and Olszewski, 1993], it is yet to be demonstrated that these parameters
have the same degree of importance for the economics of CO2 storage in coal with
enhanced gas recovery. The profitability of primary recovery increases with increasing
permeability, gas content (as a function of seam saturation), and saturation level (at
constant gas content). This is demonstrated in Figure 5.4 and Figure 5.5 which show the
NPV with regards to changes in permeability as well as seam saturation. The results
were derived using the Spring Gully reservoir model described in Chapter 3 and the
economic assumptions outlined in Chapter 4.
800
600
NPV CBM, A$M
400
200
0
0.1 1 10 100 1000
-200
Log permeability, mD
Figure 5.4: NPV of primary recovery at Spring Gully as a function of permeability.
135
1,200
1,000
NPV CBM, A$M
CH4 isotherm
800
Gas content
600
400
200
0
-200 20 40 60 80 100
Saturation, %
Figure 5.5: NPV of primary recovery at Spring Gully as a function of seam saturation for a)
constant gas content / changing methane isotherm (green curve) and b) increasing gas content /
constant methane isotherm (purple curve).
In contrast to the economics of primary recovery, storage economics are incremental

economics. Therefore, the relationships observed for primary recovery do not
necessarily extend to CO2 Storage-ICBM. Furthermore, with respect to CO2 storage, the
CO2 sorptive capacity of the coal will also have a considerable effect on the economics.
It affects not only the volume of CO2 stored and avoided, but the adsorbed CO2 will
change the near injector permeability and the reservoir peremability. Consequently, the
effect of permeability, gas content, as well as CH4 and CO2 isotherms on Storage-ICBM
economics will be investigated in this chapter.
5.3.2 RESERVOIR PERMEABILITY
Based on published production rates and short term production pilot tests, the average
reservoir permeability at Spring Gully was estimated as 250 mD in Chapter 3. However,
permeability is the reservoir parameter associated with the highest degree of variability.
This is also indicated for the Spring Gully CBM field where, based on gas flow rates,
reservoir permeability is estimated to range from 1 – 1,000 mD [Pitkin, 2006]. Thus,
this is the range of reservoir permeability considered for the sensitivity analysis. All
other reservoir properties are those as defined in Chapter 3.
136
A summary of key output variables affecting storage economics and their respective
values as a function of initial reservoir permeability is presented in Table 5.1. The
variables are time to CO2 breakthrough (defined as more than 7% CO2 content in the
produced gas – see Chapter 4), the difference in duration between primary and enhanced
recovery project life, the cumulative CO2 injected and avoided, the incrementally
recovered gas reserves, as well as the average annual incremental production. The
difference in project life indicates the accelerated gas recovery rate as a result of CO2
injection in comparison to primary recovery. A negative value means gas recovery is
accelerated, a positive number shows that the storage project runs longer than primary
recovery. Recovering more reserves in a shorter time frame is not only beneficial
because of the savings in fixed operating costs, but also because of the larger present
value of income received earlier during a project (an effect of discounting).
Table 5.1: Key output variables affecting the economics of CO2 storage with respect to initial
reservoir permeability.
Time to ∆Project CO2 injected / Incremental Annual

Permeability
breakthrough life avoided reserves reserves
mD years years Mt Mm3 Mm3/year
0.1 47 46 0.6 / 0.5 233 4.96
1 47 37 5/4 542 11.54
10 47 -10 42 / 34 5,233 111.34
50 26 -31 38 / 30 3,216 123.68
100 22 -35 32 / 26 2,455 111.61
250 17 -32 25 / 20 1,890 111.18
500 14 -23 20 / 16 1,816 129.70
1,000 11 -15 16 / 13 1,732 157.43
As permeability is a key property that determines the rates of fluid flow through porous
media, it strongly affects the time to CO2 breakthrough. Time to breakthrough affects
the cumulative CO2 injected and avoided. This is demonstrated by the results presented
in Table 5.1. Above an initial permeability of 10 mD the time to breakthrough starts to
decrease and analogously the cumulative CO2 injected decreases with increasing
permeability. The cumulative incremental reserves recovered in Storage-ICBM also
decrease when less CO2 is injected.
137
For initial permeabilities of 10 mD or less the gas does not travel fast enough through
the reservoir to allow gas to be injected at the designated rate of 21,807 m3/d (see
Chapter 3). The injected gas builds up around the wellbore and the pressure around the
well increases. As the BHP in the injection well is limited to less than fracture opening
pressure of the reservoir, the injection is limited to a pressure of 15,000 kPa. Therefore,
even though the project does not experience breakthrough, the cumulative CO2 injected
can be less than for a shorter project life. This is the case for the scenarios for which the
initial permeabilities are 0.1 mD and the 1 mD.
The specific cost of CO2 avoided in Storage-ICBM and CCS-ICBM are determined by
the specific combination of the variables presented in Table 5.1. Figure 5.6 illustrates
the decrease in the specific cost with increasing permeability. For ki = 0.1 mD the
specific cost of Storage-ICBM was determined as A$627.17/t. When permeability
increased by an order of magnitude to 1 mD, the specific cost decreased to A$79.03/t.
For an intial permeability of 10 mD, the specific cost turned negative to A$-2.68/t
which means Storage-ICBM adds value to the CCS-ICBM project. With increasing
order of magnitude for the permeability, the changes in the specific cost of CO2 avoided
become less significant. This is highlighted in Figure 5.7 which is a magnification of the
specific cost of Storage-ICBM presented in Figure 5.6. For ki = 100 the specific cost is
A$-8.47/t and for ki = 1,000 it decrease to A$-13.89/ t. Though this analysis indicates
that above a certain order of magnitude (here: 10 mD) the importance of permeability
for CO2 storage in coal is less significant, it also demonstrates that permeability is a key
factor that can determine the feasibility of CO2 storage in coal.
138
800
Specific cost of CO 2 avoided,

700
CCS
600 Storage
500
A$/t
400
300
200
100
0
-100 0.1 1 10 100 1000 10000
Log k, mD
Figure 5.6: The specific costs of CO2 avoided in CCS-ICBM and Storage-ICBM as a function of
initial permeability (log scale).
20
15
Specific cost of CO 2
avoided, A$/t
10 Storage
5
0
-5 0.1 1 10 100 1000 10000
-10
-15
-20
Log k, mD
Figure 5.7: Magnification of the specific cost of CO2 avoided in Storage-ICBM presented in Figure
5.6.
For the base case permeability of 250 mD the specific cost of CO2 avoided increases
slightly to A$-7.72/t compared to A$-8.47/t for the 100 mD case before it decreases
again for the permeability of 500 mD. This is related to the point of abandonment
chosen in this thesis. The point of abandonment is a CO2 breakthrough concentration of
7% in the produced gas. However, the analysis is performed on an annual basis which
139
means the flow rates are averaged over a whole year. Therefore, the CO2 content in the
produced gas could be 1% in January and 12% in December (above the 7% threshold),
but as long as the annual average is 7% or less, the project is assumed to continue for
this year. Alternatively, if the annual average is higher than 7% the project is assumed
to have been abandoned in the preceding year. This can result in the non-linear
behaviour seen in Figure 5.7.
5.3.3 VARIATIONS IN SEAM SATURATION WITH CHANGING GAS

CONTENT (CH4 ISOTHERM = CONSTANT)
The average gas content at Spring Gully was estimated as 12.75 m3/t (see Chapter 3).
To evaluate the effect of gas content on the specific cost of CO2 avoided, the gas
content is changed while the Langmuir volume remains constant. This means the gas
saturation level of the coal seam also changes. As a consequence, a change in gas
content has two effects; 1) the gas in place changes; and 2) the desorption pressure
changes which means the required pressure drawdown is affected.
For the analysis, four different gas contents were evaluated corresponding to four
different saturation levels. These are summarised in Table 5.2. Figure 5.8 illustrates how
the different levels of saturation affect the desorption pressure. The lower the gas
content and thus the level of saturation, the higher is the pressure drawdown required to
produce gas from the reservoir, and gas production is delayed.
Table 5.2: Evaluated gas contents and the corresponding level of saturation.
Gas Content Saturation CH4 Langmuir Volume

m3/t % m3/t
3.75 20 23.5
7.5 40 23.5
12.75 68 23.5
18.74 100 23.5
140
20
100%
18
Gas content, m /t 16
3
14 68%
12
10
8 40%
6
20%
4
2
0
0 2,000 4,000 6,000 8,000
Pressure, kPa
Figure 5.8: Desorption pressures as a function of initial gas saturation at 8,000 kPa reservoir
pressure.
Table 5.3 summarises the results for the key outputs affecting Storage-ICBM
economics. It shows that CO2 breakthrough occurs first for the fully saturated coal and
last for the least saturated seam. This is reflected in the quantity of CO2 avoided that
decreases with increasing saturation level. However, despite the fact that the fully
saturated seam has five times more gas in place than the 20% saturated seam, the
cumulative incrementally recovered reserves are still higher for the 20% saturated coal.
In this specific case, the higher incremental reserves reflect a) the lower reserves
recovered during primary production (the primary production scenario only has an
economic life of 8 years as indicated in Table 5.3 by the positive difference in project
life of 14 years); and b) the longer time to breakthrough in comparison to the fully
saturated coal.
Table 5.3: Key output variables affecting the economics of CO2 storage with respect to gas content /
seam saturation.
Gas Seam Time to ∆Project CO2 injected / Incremental Annual

content saturation breakthrough life avoided reserves reserves
m3/t % years years Mt Mm3 Mm3/year
3.75 20 22 14 31 / 26 2282 103.73
7.5 40 20 -37 29 / 23 1910 95.50
12.75 68 17 -32 25 / 20 1890 111.18
18.75 100 14 -26 20 / 16 1959 139.93
141
The specific cost of CO2 avoided is shown in Figure 5.9. Figure 5.9 highlights that
despite the highest cumulative incremental recovery and the largest quantity of CO2
avoided for the 20% saturated case, the specific cost still decreases as a function of
increasing gas content. This is a result of the delay in gas recovery which is detrimental
with respect to the present value of the gas recovered. The trend is the same as observed
for primary recovery for which the economics also improved with increasing gas
content.
100
90
80
Specific cost of CO 2
70
avoided, A$/t
60
50 CCS
40 Storage
30
20
20%
10 40% 68% 100%
0
-10
0 2 4 6 8 10 12 14 16 18 20
-20
-30
3
Gas content, m /t
Figure 5.9: The specific cost of CO2 avoided in CCS-ICBM and Storage-ICBM as a function of gas
content seam saturation.
5.3.4 VARIATIONS IN SEAM SATURATION WITH CONSTANT GAS

CONTENT
The effect of seam saturation on Storage-ICBM economics is investigated by modifying

the CH4 isotherm while the gas content is kept constant at 12.75 m3/t. This allows the
representation of different levels of coal seam saturation and their associated desorption
pressures by varying both the slope and the Langmuir volume of the isotherms. The
modified isotherms are illustrated in Figure 5.10 which also highlights the
corresponding desorption pressures and the different seam saturations. The
corresponding data is presented in Table 5.4.
142
Table 5.4: Gas saturation levels as a function of Langmuir volume and corresponding desorption
pressures. The CH4 Langmuir pressure is constant at 2,030 kPa.
Gas saturation CH4 Langmuir volume Gas content Desorption pressure

% m3/t m3/t kPa
30% 53 12.75 643
40% 39.95 12.75 952
52% 30.55 12.75 1,454
68% 23.5 12.75 2,408
85% 18.8 12.75 4,271
100% 15.98 12.75 8,000
30
Adsorbed gas content, m /t
30% 40%
3
25
52%
20
68%
85%
15
100%
10
0
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
Pressure, kPa
Figure 5.10: Desorption pressures as a function of Langmuir isotherm for a constant gas content of
12.75 m3/t. The percentage on each isotherm identifies the corresponding degree of seam saturation.
The CH4 Langmuir isotherm was modified by varying the Langmuir volume only. This
is because the Langmuir volume has a significantly larger effect on the shape of the
isotherm than Langmuir pressure. This is demonstrated in Figure 5.11. A rise in
Langmuir pressure counteracts an increase in Langmuir volume (see Figure 5.11).
143
Base Case
40 VL+100%
Adsorbed gas content, m /t

PL+100%
3 35
VL+100%, PL+100%
30
25
20
15
10
5
0
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
Pressure, kPa
Figure 5.11: Effects of a 100% increase in a) Langmuir volume (cross symbol); b) Langmuir
pressure (triangle symbol); c) both Langmuir volume and pressure (square symbol). The base case
isotherm is highlighted in red.
The results of the sensitivity study are summarised in Table 5.5. They highlight that the
level of seam saturation does not affect the cumulative CO2 stored and avoided. The
time to CO2 breakthrough is the same for all cases and thus the same amount of CO2 is
injected each year until breakthrough. However, this does not imply that the
incrementally recovered reserves are constant as well. Incremental recovery rises as a
function of seam saturation up to a saturation of 68%. Above this level incremental
recovery decreases again from 1,890 Mm3 indicating an optimum level of seam
saturation exists with respect to Storage-ICBM economics. This is also reflected in the
specific cost of CO2 avoided in CCS-ICBM and Storage-ICBM depicted in Figure 5.12.
At a seam saturation of 68% the specific cost of CO2 avoided exhibit a minimum. The
highest specific cost of CO2 avoided is determined for the lowest investigated seam
saturation of 30% as here incremental recovery is only 398 Mm3.
144
Table 5.5: Key output variables as a function of seam saturation. Incremental recovery is presented
as a percentage of the total gas recovered during CBM and Storage-ICBM.
Seam Time to ∆Project CO2 injected / Incremental Incremental

saturation breakthrough life avoided reserves recovery
% years Mt Mm3 %
30 17 -40 25 / 20 398 8.46
40 17 -40 25 / 20 901 13.73
52 17 -40 25 / 20 1,284 13.57
68 17 -32 25 / 20 1,890 17.80
85 17 -14 25 / 20 1,753 15.76
100 17 -7 25 / 20 1,687 14.94
90
80
Specific costs of CO 2
70
avoided, A$/t
60
50
40 CCS
30 Storage
20
10
0
-10 30 50 70 90
Saturation, %
Figure 5.12: The specific cost of CO2 avoided in CCS-ICBM and Storage-ICBM as a function of
initial gas saturation for a constant gas content of 12.75 m3/t.
The maximum incremental recovery at a seam saturation of 68% and the consequential
minimum in the specific cost of CO2 avoided are a result of the relationship between
CBM and Storage-ICBM. Though initially incremental recovery rises with increasing
seam saturation, the application of Storage-ICBM becomes less effective when
significant gas reserves can be readily recovered during primary production. This is
indicated in Table 5.5 which presents the incremental gas recovery as a percentage of
the total gas recovered in CBM and Storage-ICBM. For the saturation level of 68%,
17.8% of the total gas produced is recovered during Storage-ICBM. This is the highest
145
recovery factor for Storage-ICBM for all investigated saturation levels. Thus, the seam
saturation of 68% is an optimum for Storage-ICBM at Spring Gully. While this result is
case specific and likely to be affected by other reservoir properties such as permeability
and gas content, it shows that the relationships between reservoir properties and
Storage-ICBM economics are not as straight forward as for primary recovery and make
predictions of the optimum conditions for Storage-ICBM difficult.
5.3.5 CO2:CH4 SORPTION RATIO
For the Spring Gully reservoir simulation study, a CO2:CH4 sorption ratio of 2:1 was
used. This is a common estimate for high rank coals [Gentzis, 2000; Puri and Yee,
1990; White et al., 2005], though the sorptive capacity of the coal towards CO2 could be
different. How this would affect Storage-ICBM economics is evaluated in this section.
CO2:CH4 sorption ratios of 1:1 up to 4:1 (at a reservoir pressure of 8,000 Pa) are
considered which are obtained by modifying the CO2 Langmuir volume as shown in
Table 5.6. This means for a sorption ratio of 4:1 a CO2 Langmuir volume of
approximately 90 m3/t is estimated. This is very high, but not unheard of. Wold et al.
[2006] reported a CO2 Langmuir volume of 78.5 m3/t (as received basis) for Sydney
Basin coals in their study evaluating the variability of coal seam parameters for mine
outburst risk assessment. Wangeningen [2006] determined a CO2 Langmuir volume of
87 m3/t (dry ash free basis) for Polish Upper Silesian coals.
Table 5.6: CO2:CH4 sorption ratios obtained through modification of the CO2 Langmuir volume.
The CO2 Langmuir pressure is constant at 1,580 kPa.
CO2:CH4 ratio CO2 Langmuir volume

m3/t
1:1 23.4
2:1 44.1
3:1 68.4
4:1 90.0
146
Table 5.7 summarises the key outputs affecting Storage-ICBM economics. As the
sorptive capacity for CO2 increases so does the CO2 injected and avoided as more CO2
can be retained by the coal before CO2 breaks through at the production well. Thus, the
time to CO2 breakthrough becomes longer with rising CO2 sorption ratios. However, for
the CO2 Langmuir volume of 90 m3/t (sorption ratio of 4:1) the coal swells to such a
degree that CO2 injection is limited by the fracture opening pressure and it cannot be
injected at the designated rate of 1.46 Mt/yr (approximately 22,000 m3/d). The average
annual injection rate is approximately 0.5 Mt/yr. Therefore, the cumulative CO2 injected
and avoided is less than for the lower sorption ratios, although the theoretical CO2
storage capacity of the coal is larger. This highlights that the technical storage capacity
can be significantly less than the theoretical storage capacity.
Table 5.7: Key output variables as a function of CO2:CH4 sorption ratios.
Time to ∆Project CO2 injected / Incremental Annual

CO2:CH4 ratio
breakthrough life avoided reserves reserves
years years Mt Mm3 Mm3/year
1:1 8 -42 12 / 9 39 4.83
2:1 17 -32 25 / 20 1,890 111.18
3:1 47 -3 69 / 55 2,524 53.71
4:1 47 -3 24 / 19 1,523 32.41
The specific cost of CO2 avoided is presented in Figure 5.13 which shows that it
increases with rising sorption ratio. As CO2 constitutes a cost and no incentives are
provided for avoiding CO2, a low sorption ratio is beneficial as it means less CO2 is
required to achieve recovery enhancement. For the sorption ratio of 1:1 incremental
recovery is only 39 Mm3 (compared to 2,542 Mm3 for the 3:1 sorption ratio). However,
the specific cost of Storage-ICBM is still the cheapest at A$-13.62/t of CO2 avoided.
The negative cost implies that the injection of CO2 is adding value to the project and the
NPV of Storage-ICBM is positive. The considerably shortened project life (42 years
less than primary recovery) indicates that more gas is recovered faster. Therefore, the
gas has a higher present value and the operating costs are reduced.
147
Specific costs of CO 2 100
avoided, A$/t 80
60
CCS
40
Storage
20
-20 1 2 3 4
CO2:CH4 sorption ratio
Figure 5.13: The specific cost of CO2 avoided in CCS-ICBM and Storage-ICBM as a function of
CO2:CH4 sorption ratio.
By far the most CO2 is injected and avoided for the sorption ratio of 3:1. It also exhibits
the highest incremental recovery. However, if the reserves are annualised as in Table
5.7 it shows that the annual recovery is less than half of that for the sorption ratio of 2:1.
This implies that gas is recovered much slower as more CO2 is required to yield
recovery enhancement. Therefore, the specific cost is higher for this case than for the
lower sorption ratios of 1:1 and 2:1 despite the considerable quantity of CO2 avoided.
The CO2 avoided is similar for the sorption ratios 2:1 and 4:1. However, for the ratio of
4:1 the project runs for 47 years whereas for the 2:1 case it only runs for 17 years. Thus,
the present value of the CO2 avoided for the sorption ratio of 2:1 is higher. The
cumulative recovery is also higher, so that for the sorption ratio of 4:1 the specific cost
of CO2 avoided in CCS-ICBM and Storage-ICBM is the most expensive.
5.3.6 COMPARISON OF THE IMPACT OF DIFFERENT RESERVOIR

PROPERTIES
In this section the relative impact of the individual reservoir properties on Storage-
ICBM economics is compared. The specific cost of CCS-ICBM is not presented as its
behaviour is analogous to the specific cost of Storage-ICBM. This was demonstrated in
the previous sections. To enable comparison of the sensitivity of the specific cost of
148
Storage-ICBM to different reservoir parameters, the parameters are standardised over
their respective ranges. This is done because the ranges over which the individual
reservoir properties are studied vary considerably. For example permeabilities ranging
from 0.1 mD up to 1,000 mD were analysed, while gas contents could only be analysed
in the range of 0 m3/t to 18.75 m3/t (completely saturated seam). Assessed CH4
Langmuir volumes ranged from 16 m3/t to 53 m3/t, whereas the CO2 Langmuir volumes
investigated were between 23 m3/t and 90 m3/t. To be able to compare the effect of
input parameters spanning such different ranges of input values the input parameters
were standardised after Kleijnen [1995]. The input values for the base case presented in
Chapter 3 were used as the reference (base) values.
X − XB
X St = (5.1)
X max − X min
XSt is the standardised parameter, X is the value to be standardised, XB is the base value,
and Xmax and Xmin are the maximum and minimum values of the investigated range.
The specific cost with respect to variations in input parameters is shown in Figure 5.14.
Figure 5.14 presents the specific cost as a function of standardised permeability, gas
content, CH4 Langmuir volume (seam saturation), and CO2 Langmuir volume (sorption
ratio). Because of the very high change in the specific cost, the sensitivity to
permeability is also presented separately in Figure 5.15.
Permeability Sorption ratio (CO2 isotherm)

Seam saturation (CH4 isotherm) Gas content
15
Specific cost of CO 2 avoided in
10
Storage-ICBM, A$/t
5
0
-0.8 -0.6 -0.4 -0.2 -5 0 0.2 0.4 0.6 0.8 1
-10
-15
-20
-25
Standardised parameter value, fraction
Figure 5.14: The specific cost of CO2 avoided in Storage-ICBM as a function of standardised
permeability, gas content, CH4 Langmuir volume, and CO2 Langmuir volume.
149
Specific cost of CO 2 avoided in 700
Storage-ICBM, A$/t 600
500
400
300
200
100
0
-0.4 -0.2-100 0 0.2 0.4 0.6 0.8 1
Standardised permeability, fraction

Figure 5.15: The specific cost of CO2 avoided in Storage-ICBM as a function of standardised
permeability.
Figure 5.14 highlights that the specific cost of CO2 avoided is most sensitive to
reservoir permeability. However, the change in specific cost is significantly larger for
permeabilities from 0.1 to 10 mD with changes from A$627.07/t (0.1 mD) to A$79.03/t
(1 mD) down to A$-2.68/t (10 mD) and becomes less pronounced above a permeability
of 10 mD where the specific cost of CO2 avoided only decreases from A$-2.68/t (10
mD) to A$-13.98/t (1,000 mD). In comparison, the relationship between gas content and
the specific cost of CO2 avoided appears almost linear and the specific cost of CO2
avoided decreases from A$6.23/t for a gas content of 3.75 m3/t to A$ -20.51/t for a fully
saturated seam. A similar relationship is observed between the specific cost of CO2
avoided and the CO2 sorption ratio which rises from A$-13.62/t for a sorption ratio of
1:1 to A$1.16/t for a sorption ratio of 4:1. However, the slope becomes flatter for a
change in sorption ratio from 3:1 to 4:1. The results show that the specific cost of CO2
avoided is less sensitive to the CO2 sorption ratio than to the initial gas content.
With respect to seam saturation the specific cost of CO2 avoided in Storage-ICBM
exhibits a minimum at a saturation level of 68%. The specific cost ranges from A$3.55/t
for a seam saturation of 20% to A$-7.72/t for a seam saturation of 68%. This is the
narrowest range for all input parameters investigated.
150
Based on these observations a ranking is established with respect to the input
parameter’s effect on the specific cost of CO2 avoided in Storage-ICBM. The specific
cost of CO2 avoided is most sensitive to:
1) (low) reservoir permeability

2) initial gas content
3) CO2 sorptive capacity of the coal (represented by changes in CO2 Langmuir
volume)
4) seam saturation (represented by changes in CH4 Langmuir volume)
5.4 CONCLUSIONS
With respect to cost items the sensitivity analysis showed that the economics of
Storage-ICBM at Spring Gully are most sensitive to compression costs. A natural gas
price of A$128/GJ would be necessary for CCS-ICBM at Spring Gully to break even as
both gas sales and operating costs increase as a function of rising gas prices. This
indicates that an incentive for storing CO2 is more efficient in making CCS-ICBM
economic than increased energy prices which are beneficial for the storage operator but
not for the capture operator.
With respect to the reservoir properties it was found that Storage-ICBM economics are
most sensitive to reservoir permeabilities below 10 mD. For 10 mD and above it was
found that the specific cost only changed by A$-11.21/t of CO2 avoided from a
permeability of 10 mD to a permeability of 1,000 mD. Gas content and the
corresponding seam saturation was also demonstrated to have a noticeable effect on
Storage-ICBM economics and with rising gas content the profitability of Storage-ICBM
increased. This is a trend that was also observed for primary recovery.
The relationship between the CH4 isotherm and Storage-ICBM economics is notably
different to that of the CH4 isotherm and primary recovery. For primary recovery the
NPV increased with rising saturation level, but for Storage-ICBM it was found that an
optimum seam saturation (68%) appeared to exist for which the specific cost were the
lowest.
151
Analysis of the different CO2:CH4 sorption ratios highlighted that while the storage
capacity towards CO2 increased, the specific cost of CO2 avoided in Storage-ICBM also
rose as more CO2 was required to achieve effective recovery enhancement. However,
this relationship could change if an incentive was associated with the injection /
avoidance of CO2. This is investigated in the subsequent chapter which investigates
suitable operating conditions for CO2 storage in coal seams when CO2 constitutes a
source of revenue rather than a cost.
Based on the results of the sensitivity analyses of the Spring Gully CBM field the most
favourable combination of reservoir properties is a high permeability, slightly
undersaturated seam with high gas content and a low CO2:CH4 sorption ratio. However,
the sensitivity analysis did not attempt to optimise the economics by changing the
operational conditions such as well design and injection rate but only demonstrated
what the costs would be if a reservoir property deviated from the base case assumption.
In the next chapter the results from this study are used to develop screening criteria and
preliminary operating guidelines for economic CO2-ECBM and Storage-ICBM.
152
6 SCREENING CRITERIA AND PRELIMINARY
OPERATING GUIDELINES FOR ECONOMIC
STORAGE-ICBM
6.1 INTRODUCTION
Chapter 5 demonstrated that reservoir properties strongly affect the economics of CO2
storage with incremental CBM recovery. Therefore, an important operational
consideration is the selection of the coal reservoirs which have the properties best suited
for the process. Target coals for Storage-ICBM have not yet been clearly identified in
the literature. From a technical point of view, CO2-ECBM favours high initial reservoir
permeabilities due to coal swelling and the resulting reduction in permeability. In
Chapter 5 it was demonstrated that the specific cost of CO2 avoided decreases with
increasing permeability. The same was found for an increase in gas content. However,
the analysis did not consider the value added by the injection of CO2 if CO2 was to
constitute a net revenue rather than a net cost. How to best develop coal reservoirs for
CO2-ECBM is a function of the reservoir specific properties and the prevailing
economic conditions. No guidelines for commercial CO2-ECBM field development
exist due to the lack of practical experience in this area. Currently, the greatest concern
for CO2-ECBM development is the demonstration of its technical feasibility, though
economic projections are necessary to
demonstrate the economic feasibility of CO2-ECBM in addition to the technical

feasibility.
show under which (geological, operational, and economic) conditions CO2-
ECBM could be feasible.
assist policy makers and investors in decision making processes relating to CO2-
ECBM.
aid in designing applied R&D programs (Gorucu et al., 2007).
show the potential of coal as a sequestration option in comparison to other
geological sinks.
The objective of the work presented in this chapter is the identification of target coals to
which the application of Storage-ICBM is most beneficial. Furthermore, preliminary
guidelines for the most profitable operational design for CO2-ECBM as a function of
153
key reservoir properties are developed. The findings of this chapter can be employed as
a first screening tool to identify the CO2-ECBM projects with the highest economic
potential and to determine the economic viability of a field with given reservoir
properties.
To determine screening criteria and operating guidelines for economic CO2-ECBM and
Storage-ICBM, key parameters that predictions are most sensitive to were selected. The
reservoir properties that were identified to have the highest impact on Storage-ICBM
economics were permeability and gas content. Operational parameters to be varied in
this study are well spacing, well type, and injection rate. The economic parameters
considered are gas price and CO2 price. Different parameter combinations are evaluated
for their economic potential for CO2-ECBM and Storage-ICBM.
The methodology applied in this study is outlined first after which the effect of
operational parameters and CO2 and gas prices on Storage-ICBM economics is analysed
with respect to the key reservoir properties permeability and gas content. Three different
permeability levels and three different levels of gas content are considered. As part of
the analysis, the effect of reservoir permeability on injection rates is investigated
further. A qualitative assessment of the effect of other reservoir and economic
parameters on the profitability of Storage-ICBM is also performed. The conclusions
summarise the findings of this chapter.
6.2 METHODS AND ASSUMPTIONS
6.2.1 CO2 AS A SOURCE OF REVENUE
In the absence of an economic environment that provides a substantial disincentive for

the release of CO2 or CO2-e emissions, CCS is not an economically sustainable
mitigation technology. This is primarily based on the current level of capture costs and
thus CO2 costs. From a storage operator’s perspective, this implies that the more CO2
injected, the higher are the total costs and storage becomes less economically attractive
as the costs increasingly outweigh the benefits from CO2 injection (if any). Therefore, it
is a safe assumption that large scale CCS will only be applied if the mitigation of GHG
emissions effectively saves or earns money compared to the business-as-usual scenario.
For a storage operator, a justification for storage would be a price received for each
154
tonne of CO2 injected – basically a CO2 disposal fee. The financial incentive for storing
CO2 would be provided by the original emitter or passed on by the capture operator to
the storage operator. Consequently, in this chapter it is assumed that the storage
operator receives revenues based on the quantity of CO2 injected rather than needing to
pay for the CO2.
Expectations are that the driver for CCS will be some form of market based emissions
trading scheme (possibly with initial price caps) or an emissions tax. This implies that
the emissions generated during storage also have to be accounted for. In the absence of
meaningful price estimates and no definite outline for an Australian emissions
mitigation strategy, the CO2 price the storage operator receives is assumed to be
equivalent to the CO2 penalty that the storage operator is required to pay for the related
CO2 emissions. While this is not realistic because the CO2 penalty would be higher than
the net CO2 price a storage operator would receive, assuming no penalty would result in
an even larger overestimate of the effective CO2 price. Thus, effectively in this analysis
a revenue is awarded for the net CO2 injected. The revenue stream of Storage-ICBM is
made up of the net CO2 injected and the incremental CBM recovered as shown in
Eq.(6.1) and (6.2).
( ) ( )
RICBM ,i =  CO2,inj ⋅ PCO2 + ∆CBM ⋅ PGas − CO2, ICBMe ⋅ CCO2 
i
(6.1)
If PCO2 = CCO2 , then Eq.(6.1) becomes
RICBM ,i =  ∆CO2,inj ⋅ PCO2 + ∆CBM ⋅ PGas  (6.2)

i
∆CBM is the incremental CBM recovery, ∆CO2, inj is the net CO2 injected and stored,
CCO2 is the CO2 penalty based on an emissions trading scheme or an emissions tax,
CO2,ICBMe are the CO2 emissions associated with Storage-ICBM, CO2,inj is the total CO2
injected, PCO2 is the net CO2 price received by the storage operator, PGas is the gas price,
and RICBM,i is the revenue from Storage-ICBM in year i.
6.2.2 THE RELATIVE NPV OF STORAGE-ICBM
As shown in Chapter 4, the economics of CO2-ECBM are assessed on a comparative

basis to evaluate the effect of CO2 injection on CBM recovery. For the assessment of
155
the feasibility of an incremental project (such as in Chapter 3 and 4) it is sufficient to
apply the method described previously. It evaluates the performance of CO2 injection on
top of a CBM project and allows judgement about the conditions under which it could
be economic.
However, for a field that is yet to be developed, a so called Greenfield project, first, the
best (most profitable) operational design for primary recovery has to be determined. To
assess whether CO2-ECBM is financially sustainable, the economics of all CO2
injection scenarios considered should be compared to those of the best primary recovery
scenario for given reservoir and economic conditions - even if CO2-ECBM does not
represent an amendment to the best CBM project but differs in operational parameters
such as well type and spacing. If this is not the case the economics of Storage-ICBM
cannot be assessed objectively. For example, for the same NPV of CO2-ECBM the
profitability of Storage-ICBM will be higher if a less favourable operational design for
CBM is chosen. This means the project will appear preferable from a storage point of
view, even though in reality the overall NPV, the NPV of CO2-ECBM, would be the
same. Similarly, the NPV of Storage-ICBM may be the same even though the NPV of
CO2-ECBM differs, thus in reality making one project favourable over the other. To
avoid such skewed comparison and enable presentation of results in a single parameter,
the relative NPV of Storage-ICBM is introduced. It represents an increment to the best
CBM project. If the relative NPV is positive, CO2-ECBM is more economic than
primary recovery. If it is negative, primary recovery without the injection of CO2 is
preferable. The relative NPV of Storage-ICBM is:
NPVICBM , rel = NPVECBM − NPVCBM ,max (6.3)
The NPV is derived as described in Chapter 4 using Eq. (6.2) to estimate the revenues
from Storage-ICBM. In the subsequent analysis the relative NPV is normalised over an
area of 100 km2.
6.2.3 ECONOMIC PARAMETERS
The economic assumptions are those as defined in Chapter 4 with the exception that
instead of a CO2 cost now a CO2 price is applied. The CO2 price used in this chapter is
based on the cap values defined in the original Australian Carbon Pollution Reduction
156
Scheme (CPRS) [AGDCC, 2008]. The prices are A$10 and A$40 per net tonne of CO2
injected. The CPRS has since (July 2012) been replaced by a carbon tax with a current
value of A$23/t of CO2, which means that the net price of A$10/t is less than the CO2
penalty and thus appears to be a realistic scenario.
In addition to the introduction of a CO2 price, it is assumed that gas prices will also rise,
either as a consequence of an emissions penalty that will increase the costs of gas
extraction or as a consequence of general rises in energy costs. This is also indicated by
a gas price forecast by ACIL Tasman [2008] who predict a rise in real gas price to
almost A$8/GJ (2008$) by 2020 for some major Australian regions.
Based on these price assumptions two scenarios are used; a Low and a High Price
Regime.
Gas price: A$5/GJ + CO2 price: A$10/t - "Low Price Regime"

Gas price: A$8/GJ + CO2 price: A$40/t - "High Price Regime"
This assumes that gas price and CO2 price are somewhat correlated and the gas price
rises for a higher CO2 price.
As in Chapter 4, gas recovery is unrestricted, assuming a market exists for all gas
recovered. Similarly, there are no market or regulatory limitations to the quantity of
CO2 injected annually. However, the annual injection rate stays constant over the
duration of the project, assuming that contractual obligations exist specifying a constant
quantity of CO2 to be disposed of over the next several years. The objective is to
determine the best operational design - including the best injection rate. This is in
contrast to the source-sink match that was modelled in Chapter 4. In this analysis the
storage NPV will be maximised irrespective of a CO2 source.
6.2.4 RESERVOIR PROPERTIES AND OPERATIONAL PARAMETERS
The reservoir model uses the same properties as defined in Chapter 3, except for
permeability and gas content which are varied for the identification of the best
operational design for CO2-ECBM. Three levels of initial permeability are investigated -
1, 10, and 100 mD (i.e. low, medium, and high permeability) - as well as three levels of
gas content – 3.75, 7.5, and 12.75 m3/t (i.e. low, medium, and high gas content). The
157
CH4 isotherm, though, remains unchanged which means not only that the gas in place in
the reservoir is reduced, but also that the seam is severely undersaturated. The seam
saturation is 20%, 40%, and 70% for the low, medium, and high gas content
respectively. The combinations evaluated in this chapter with respect to the best
operational design are summarised in Table 6.1. To keep the results and discussion of
the analysis concise, combinations of different permeabilities and different gas content
were not examined. However, such combinations are included in the probabilistic
analysis presented in Chapter 7.
Table 6.1: Reservoir property / economic parameter combinations considered in the analysis.
Initial
# Gas content Saturation Gas price CO2 price
permeability
mD m3/t % A$/GJ A$/t
1 1 12.75 70 5 10
2 1 12.75 70 8 40
3 10 12.75 70 5 10
4 10 12.75 70 8 40
5 100 12.75 70 5 10
6 100 12.75 70 8 40
7 100 7.5 40 5 10
8 100 7.5 40 8 40
9 100 3.75 20 5 10
10 100 3.75 20 8 40
Two well types are evaluated in this study – vertical and horizontal wells. The vertical
well model is presented in Figure 6.1. As for Spring Gully, all production wells are
represented as stimulated wells (same fracture properties apply), whereas the injectors
are not fractured. Stimulated injectors are modelled only if the designated injection rate
cannot be achieved without exceeding the fracture opening pressure.
158
x
y=x
Figure 6.1: Vertical well pattern. Yellow dots represent production wells while the red dot
represents the injection well. The dashed line encloses the area modelled in SIMEDWin.
The horizontal well models are shown in Figure 6.2. Three models are trialled which
differ in x-directional distance between the wells. Because permeability anisotropy is
generally observed in coal reservoirs, in practice horizontal wells are generally oriented
in the direction of low permeability. Thus, even though this reservoir model assumes
horizontally homogeneous reservoir permeability, production and injection wells are
oriented parallel to each other.
500 m 500 m
1,000 1,000 1,000 1,000 1,000 1,000
m m m m m m
Hor1 Hor2 Hor3

Figure 6.2: Horizontal well patterns. Yellow wells are production wells, red wells represent
injection wells.
All horizontal wells are of 1,000 m length. This is because based on the equation used to
determine horizontal well cost (see Chapter 4, Eq.(4.18) and Eq.(4.19)), this length
demonstrates the best cost to length ratio. This is highlighted in Table 6.2 which
presents the well cost per metre.
159
Table 6.2: Normalised horizontal well costs. Costs derived as described in Chapter 4, section 4.4.2.
Horizontal well Well cost Normalised cost

length Producer / Injector Producer / Injector
m A$ A$/m
300 730,000 / 430,000 2,433 / 1,433
500 840,000 / 530,000 1,680 / 1,060
1,000 1,240,000 / 940,000 1,240 / 940
1,500 1,950,000 / 1,650,000 1,300 / 1,100
2,000 3,200,000 / 2,890,000 1,600 / 1,445
The well types and spacings considered are summarised in Table 6.3. The case ID
denotes the y-directional distance between producer and injector (i.e. for S300: y = x =
300 m). The results are scaled for a constant reservoir area of 100,000,000 m2 (100 km2)
so that the total well number is determined by the spacing. The trialled well injection
rates range from ~ 3,000 to ~220,000 m3/d/well. The rates are based on multiples of the
well injection rate from the Spring Gully case study presented in Chapter 3 (21,808
m3/d/well). With respect to annual field injection rates this equates to ~0.3 – ~12 Mt/yr,
depending on the well spacing and thus the injection well number. The injection rate
can be converted to the well injection rate using Eq. (6.4). As described in section 6.2.3,
injection occurs at a constant rate, rather than constant injection pressure.
mɺ F
⋅1 ⋅109
ρCO
qWell = 2
(6.4)
nIW ⋅ 365
qWell is the well injection rate, mF is the field injection rate, nIW is the total number of
injection wells, and ρCΟ2 is the CO2 density at standard temperature and pressure (STP).
160
Table 6.3: Well spacing and injection rate and the reservoir type they are applied to. The well
number is representative of an area of 100 km2. L = low, M = medium, H = high permeability.
Well x-distance y-distance #Producer

ID Permeability
type to producer to injector / #Injector
m m
S250 Ver 500 250 400 / 400 L, M, H
S300 Ver 600 300 278 / 278 M, H
S500 Ver 1,000 500 100 / 100 L, M, H
S750 Ver 1,500 750 44 / 44 M, H
Hor1-150 Hor 0 150 333 / 333 L
Hor1-250 Hor 0 250 200 / 200 L, M, H
Hor1-500 Hor 0 500 100 / 100 L, M, H
Hor1-750 Hor 0 750 67 / 67 M
Hor1-1000 Hor 0 1,000 50 / 50 H
Hor2-500 Hor 500 500 67 / 67 H
Hor2-1000 Hor 500 1,000 33 / 33 H
Hor3-500 Hor 1,000 500 50 / 50 H
Hor3-1000 Hor 1,000 1,000 25 / 25 H
6.3 SENSITIVITY TO RESERVOIR PERMEABILITY

Best operating practises for Storage-ICBM are analysed with respect to initial reservoir
permeability. High (100 mD), medium (10 mD), and low (1 mD) permeability are
investigated for the two price regimes specified in section 6.2.3. First, the best primary
recovery scenario for each permeability is determined. This is followed by an analysis
of the effect of reservoir permeability on maximum injection rates and an evaluation of
the effect of operational parameters on cumulative CO2 injection and incremental gas
recovery.
The economics of Storage-ICBM are presented starting with the results for the high
permeability coal. Vertical wells are discussed first after which the analysis is extended
to include horizontal wells. When only vertical wells are considered, the relative NPV is
based on the best CBM recovery scenario using vertical wells (as a function of
permeability and price regime). When horizontal wells are included in the analysis, the
relative NPV is based on the best primary recovery scenario independently of well type.
161
The relative NPV is presented as a function of annual CO2 injection rate to assist in
illustrating the most profitable way of operating Storage-ICBM. The analysis concludes
with a discussion that compares, analyses, and highlights the findings from this section.
6.3.1 PRIMARY RECOVERY ECONOMICS – F(K)
To evaluate if the injection of CO2 can provide an improvement over primary recovery,
the NPV of CO2-ECBM is compared to the most profitable primary recovery case.
Therefore, a range of well spacings was evaluated with regards to profitability measured
by the NPV. The highest NPV as a function of the price regime and reservoir
permeability is presented in Figure 6.3 for both horizontal and vertical producers. Figure
6.3 illustrates that the NPV increases with larger initial permeability. It also shows that
for initial permeabilities of 10 mD and greater, horizontal wells show better economics
independent of the price regime.
The highest NPV with respect to vertical wells for the high permeability seam is
achieved using a spacing of S300 and S250 for the Low and High Price Regime
respectively. This is also valid for the medium permeability seam. In relation to
horizontal wells the highest NPV for the high permeability coal is obtained using the
spacing of Hor1-500 for the Low Price Regime and Hor1-250 for the High Price
Regime. For the medium permeability coal spacing Hor1-250 is the most profitable for
both price regimes. These cases are used as the basis of comparison for determining the
relative NPV of Storage-ICBM.
For the low permeability coals none of the investigated well spacings exhibits a positive
NPV for the assumed conditions. The least negative NPV is determined for S750
(vertical wells) and Hor1-1000 (horizontal wells), for both price regimes. However, for
the purpose of this study it is assumed that a project with a negative NPV is not further
pursued and thus for the analysis of Storage-ICBM the NPV of CBM in low
permeability reservoirs is assumed as 0. This means that the economics of Storage-
ICBM are equivalent to those of CO2-ECBM so that all revenues and all costs are
accounted for in Storage-ICBM.
162
1,400
Maximum NPV CBM, A$M/100km 2 1,200 $8.0/GJ
$5.0/GJ
1,000 $4.2/GJ
800
600
400
200
0
1 - Ver 1 - Hor 10 - Ver 10 - Hor 100 - Ver 100 - Hor
Permeability (mD) - Well Type

Figure 6.3: Maximum normalised NPV of primary recovery with horizontal (Hor) and vertical
(Ver)wells for the three permeability classes and three levels of gas prices (current, medium, and
high).
6.3.2 CO2 INJECTION PERFORMANCE – F(K)
The economics of CO2-ECBM and Storage-ICBM are a function of the CO2 injected
and stored as well as the incremental gas recovered. Furthermore, the rate at which gas
is recovered and CO2 injected has a great impact on the economic feasibility of a project
since money earned later in the project life has a lower value than the same money
earned today. Thus, in this section the effect of injection rate, well type, well spacing,
and reservoir permeability on the cumulative CO2 injected, the cumulative relative
incremental gas recovery and the time to breakthrough (breakthrough: 7% CO2 in the
produced gas - see Chapter 4) are investigated. First, however, the injection rate
limitations as a function of reservoir permeability are discussed.
Effect of permeability on injection rates

The injection of CO2 leads the coal to swell and as a result the cleat aperture closes and
reservoir permeability is reduced (see Chapter 2, section 2.2.3 – Permeability as
function of effective stress). This process is incorporated in the numerical reservoir
simulator using the Shi-Durucan model. The degree of swelling is a function of the
quantity of gas adsorbed (determined by the isotherm and reservoir pressure) and the
163
coal’s geomechanical properties. The analysis presented here will assist in determining
the effect of the actual reservoir permeability during CO2 injection on injection rates.
Using the actual permeability to establish maximum feasible injection rates is more
meaningful than using the initial permeability which changes during the (enhanced)
recovery process.
Non-stimulated vertical injection wells were modelled when the designated CO2
injection rate did not present a problem, i.e. when injection was not limited by fracture
opening pressure (16,000 kPa - maximum injection pressure: 15,000 kPa). For the cases
for which fracture opening pressure limited injection, fractured vertical injection wells
were modelled to enable higher injection rates. For the high permeability coal (100
mD), fractured injection wells are necessary at and above well injection rates of
~110,000 m3/d/well. This corresponds to annual injection rates of 7.3 Mt/yr/100 km2and
3.2 Mt/yr/100 km2 for S500 and S750 respectively. For the medium permeability (10
mD), fractured injectors are required to inject at rates of ~22,000 m3/d/well and higher,
corresponding to 6.0 Mt/yr/100 km2 (S250), 4.0 Mt/yr/100 km2 (S300), 1.5 Mt/yr/100
km2 (S500), and 0.7 Mt/yr/100 km2 (S750). When fractures are not sufficient to achieve
the targeted annual CO2 injected, more vertical or horizontal wells are required to store
higher quantities of CO2. This is the case for the low permeability scenario (initial
permeability 1 mD) where horizontal wells are necessary to inject significant quantities
of CO2.
The reservoir permeability at the end of CO2 injection for a number of initial
permeability and gas content combinations is presented in Table 6.4. For an initial
permeability of 100 mD and a gas content of 12.75 m3/t (saturation 70%) permeability
decreases to 6 mD as a result of CO2 injection and the associated coal swelling. This is a
factor of almost 17. For a gas content of 7.5 m3/t and 3.75 m3/t permeability decreases
even further to 3.5 and 2.3 mD respectively (factors of 29 and 43 respectively). This is a
result of using the same initial reservoir permeability (i.e. 100 mD), but a different gas
content. The initial gas content determines the degree of coal swelling; for a low gas
content coal seam the initial degree of swelling is lower than for a highly saturated
seam. Thus, the low gas content seam has a higher initial permeability. When CO2 is
injected and the coal becomes fully CO2 saturated, the swelling differential between the
low gas content coals and the CO2 saturated coals is larger than it would be for high gas
content coals. As SIMEDWin uses the Shi-Durucan model which calculates the degree
164
of swelling and the corresponding change in permeability based on the differential
swelling, the decrease in permeability is higher when the initial gas content is lower.
This implies that the initial permeability has to be adjusted as a function of gas content,
so that the final reservoir permeability for the CO2 saturated coals is the same. However,
such adjustment was not performed and thus the lower gas content coals experience a
higher decrease in reservoir permeability (using the same initial permeability). This
affects the comparison between the performance of seams with lower and higher gas
contents presented in section 6.4 which is discussed later in section 6.4.5.
Based on the numerical model, the rate of swelling and thus the relative decrease in
permeability is constant; for a gas content of 12.75 m3/t the initial permeability of 10
mD decreases to 0.6 mD and to 0.06 mD for an initial permeability of 1 mD. To
understand what that means with respect to injection rates, the maximum constant
injection rate as a function of actual permeability is presented in Figure 6.4.
For the reservoir permeability of 6 mD no maximum injection rate was established. For
vertical wells the highest injection rate tested was ~153,000 m3/d/well, for the
horizontal well spacing it was ~218,000 m3/d/well. For permeabilities of 3.5 mD and
2.3 mD injection rates were limited to ~130,000 and ~110,000 m3/d/well respectively
for vertical wells and about ~220,000 and ~153,000 m3/d/well respectively for
horizontal wells. When the permeability dropped by an order of magnitude so did the
maximum constant injection rate – for a reservoir permeability of 0.6 mD vertical wells
can inject at up to ~22,000 m3/d/well and horizontal wells up to ~55,000 m3/d/well. For
reservoir permeabilities below 0.1 mD vertical wells are not capable of injecting CO2 at
significant quantities. Horizontal wells are capable of injecting ~11,000 m3/d/well for
reservoir permeabilities of 0.06 mD and up to ~5,500 m3/d/well for reservoir
permeabilities of 0.023 mD.
165
Table 6.4: Final reservoir permeability (effective k) as a result of coal swelling for a variety of
initial reservoir properties and a final CO2 content of approximately 40 m3/t.
Initial Gas Final

permeability content permeability
3
mD m /t mD
100 12.75 6
100 7.5 3.5
100 3.75 2.3
10 12.75 0.6
10 7.5 0.35
10 3.75 0.23
1 12.75 0.06
1 7.5 0.035
1 3.75 0.023
250
Max injection rate, x1,000 m 3/d/well
Vertical wells
200
Horizontal wells
150
100
50
0
0.01 0.1 1 10
Log min permeability during CO2 injection, mD
Figure 6.4: Maximum constant well injection rate as a function of final reservoir permeability
during Storage-ICBM for horizontal and vertical wells.
While the maximum constant injection rates are only rough estimates based on the
observations during the simulation studies and are limited in their applicability by the
specific fracture properties or the horizontal well length (1,000 m) as well as the seam
thickness and the CO2 sorption capacity of the coal, Figure 6.4 does provide an
indication of the extent of the limitations that permeability poses on CO2 injection rates.
166
Advancements in well and fracturing technologies have enabled fracturing of horizontal
wells. This would increase the maximum injection rate for the horizontal well type.
However, no economic analysis was performed to investigate this in this thesis.
Cumulative CO2 injected

For a constant injection rate, the cumulative CO2 injected increases with decreasing
permeability (for the same well spacing). This is demonstrated in Figure 6.5. Lower
permeability impedes flow in the reservoir and thus delays CO2 breakthrough.
Similarly, a larger distance between production and injection wells extends the time to
breakthrough. This means that for the same permeability and injection rate the larger
well spacing exhibits a higher cumulative CO2 injected.
Figure 6.5 indicates that with the other parameters constant, the cumulative CO2
injected increases with increasing annual injection rate. Deviations can occur as a result
of the specified CO2 breakthrough concentration of 7% in the produced gas. The CO2
concentration is averaged over the year. If it is 6.9% the project will continue for that
year. However, if it is 7.1% CO2 injection is abandoned at the end of the preceding year.
Thus, an increase in injection rate can lead to a lower cumulative CO2 injected, because
the CO2 breakthrough concentration in any one year has just been exceeded.
60
50
Cumulative CO 2 injected,
40
Mt/100km 2
30
100-S250 100-S300
20 100-S500 100-S750
10-S250 10-S300
10 10-S500 1-Hor150
1-Hor250 1-Hor500
0
0 1 2 3 4 5 6 7 8 9 10 11 12
2
CO2 injected, Mt/yr/100 km
Figure 6.5: Cumulative CO2 injected as a function of annual CO2 injection rate for low, medium,
and high permeability coal.
167
For constant reservoir permeability the cumulative CO2 injected appears to be a function
of the well injection rate rather than the well spacing (i.e. total well number). This is
indicated in Figure 6.6. This means that for an initial permeability of 100 mD at an
injection rate of ~ 33,000 m3/d/well, the cumulative CO2 injected is ~35 Mt for the
spacing S250, S300, S500, and S750. This indicates that the well injection rate largely
determines how much CO2 can be stored in the reservoir. However, Figure 6.6 also
indicates that, in addition to the well injection rate, the cumulative CO2 injected is a
function of well type and, for the same injection rate, horizontal wells store significantly
less CO2 than vertical wells.
The well number (here expressed through well spacing) on the other hand affects the
time frame over which CO2 is injected. Time to breakthrough as a function of annual
CO2 injected is presented in Figure 6.7. Time to breakthrough decreases with increasing
injection rate. Since the cumulative CO2 increases with increasing injection rate, it
implies that for constant permeability and well spacing the cumulative CO2 also
increases with decreasing time to breakthrough. This means that the shorter the project
life, the more CO2 is stored (when the only parameter varied is the injection rate).
60
50
40
Mt/100km 2
30
100-S250 100-S300
100-S500 100-S750
10-S250 10-S300
20 10-S500 1-Hor150
1-Hor250 1-Hor500
1-Hor150 1-Hor250
10 1-Hor500 100-Hor250
100-Hor500 100-Hor1000
10-Hor250 10-Hor500
0
0 20 40 60 80 100 120 140 160
3
CO2 injected, m /d/well
Figure 6.6: Cumulative CO2 injected as a function of well injection rate for low, medium, and high
permeability coal.
168
60
100-S250 100-S300
Time to breakthrough, years

50 100-S500 100-S750
10-S250 10-S300
40 10-S500 1-Hor150
1-Hor250 1-Hor500
30
20
10
0
0 1 2 3 4 5 6 7 8 9 10 11 12
CO2 injected, Mt/yr/100 km 2
Figure 6.7: Time to CO2 breakthrough as a function of annual CO2 injection rate for low, medium,
and high permeability coal.
Incremental recovery
Relative incremental CBM recovery (relative to the best primary recovery scenario) in
response to CO2 injection is presented in Figure 6.8. It is demonstrated that incremental
recovery rises when the permeability decreases. This is because the lower the
permeability, the less gas is recovered during the economic life of the primary process
and more residual gas is available for the enhanced recovery process. For the low
permeability of 1 mD recovery is significantly higher than for the 10 mD and the 100
mD scenarios, because in this case incremental recovery is equal to total cumulative
recovery. For 1 mD the NPV of primary recovery is negative. In this study it is assumed
that the project would not go ahead, thus, if CO2-ECBM was to be applied all gas
present is available for Storage-ICBM.
169
100-S250 100-S300 100-S500 100-S750 10-S250
10-S300 10-S500 1-Hor150 1-Hor250 1-Hor500
10,000
Relative incremental recovery,
8,000
Mm 3/100 km 2
6,000
4,000
2,000
0
0 1 2 3 4 5 6 7 8 9 10 11 12
Figure 6.8: Relative incremental CBM recovery as a function of annual CO2 injection rate for low,
medium, and high permeability coal.
6.3.3 STORAGE-ICBM IN HIGH PERMEABILITY COAL – 6 MD

(KI = 100 MD)
Vertical wells
The relative NPV of Storage-ICBM as a function of annual CO2 injected for the high
permeability coal using vertical wells only is presented in Figure 6.9 and Figure 6.10 for
the Low and the High Price Regime respectively.
For the Low Price Regime Storage-ICBM is profitable for annual injection rates of 1 –
10 Mt/yr/100 km2. The highest financial gain can be obtained by injecting at rates
between approximately 3.5 – 9 Mt/yr/100km2 of CO2 corresponding to injection rates of
~55,000 - ~131,000 m3/d/well using 100 injection wells (S500). For the injection rate of
3.5 Mt/yr/100 km2 Storage-ICBM exhibits a relative NPV of approximately
A$M240/100 km2. The increase in relative NPV observed for an increase in injection
rate from ~6 to ~7 Mt/yr/100 km2 is caused by the application of fractured injection
wells. These are needed to inject CO2 at rates of ~7 Mt/yr/100 km2 and above for the
spacing S500 (~109,000 m3/d/well) and are shown to improve the profitability of the
project again.
S500 is the most profitable spacing, but S300 and S750 are also economic. S250 is not
profitable. The notable difference in relative NPV between S250 and S300 is caused by
170
the significantly larger number of wells required for S250 (400 producers, 400 injectors)
compared to S300 (278 producers, 278 injectors).
S250 S300 S500 S750

300
2
Relative NPV low, A$M/100 km
200
100
0
0 1 2 3 4 5 6 7 8 9 10 11
-100
-200
-300
Figure 6.9: Normalised relative NPV of Storage-ICBM for S250, S300, S500, and S750 as a function
of annual CO2 injected for the Low Price Regime – high permeability.
For the High Price Regime, CO2 can be stored economically at any rate above 0.5
Mt/yr/100 km2. Despite a decrease in permeability down to 6 mD as a result of coal
swelling, fracture pressure was not reached for the injection rates investigated here and
injection occurred at a constant rate for all scenarios investigated. For rates of
approximately 10 Mt/yr/100 km2 the project life is only 5 and 4 years for S500 and S300
respectively due to premature breakthrough. Thus, higher rates are not considered in this
analysis.
Above an annual injection rate of 2 Mt/yr/100 km2 S500 is the most economic way to
store CO2 for the high prices. Below that rate S300 is preferable. The best CO2 injection
rate is ~9 Mt/yr/100 km2 (relative NPV of A$M~1,250/100 km2 for S500) which is
representative of an injection rate of ~131,000 m3/d/well. It should be noted that for
both S300 and S500 an optimum injection rate is observed which does not correspond
to the highest rate trialled.
171
S250 S300 S500 S750
1,400
Relative NPV high, A$M/100 km 2 1,200
1,000
800
600
400
200
0
-200 0 1 2 3 4 5 6 7 8 9 10 11
-400
-600
Figure 6.10: Normalised relative NPV of Storage-ICBM for S250, S300, S500, and S750 as a
function of annual CO2 injected for the High Price Regime – high permeability.
Horizontal wells
Vertical wells are generally considered appropriate for gas recovery from high
permeability / high gas content reservoirs due to their lower costs. This is not to say that
horizontal wells would perform worse, but that the initial capital expenditure is usually
significantly higher. In this section the economics of Storage-ICBM with horizontal
wells are evaluated and compared to the results obtained simulating vertical wells. The
horizontal well patterns investigated are those as illustrated in Figure 6.2. As in the high
permeability reservoir the injection rate is not limited by fracture pressure, the benefit of
horizontal wells will lie in the faster sweep of the reservoir and the associated
accelerated gas recovery.
The relative NPV of Storage-ICBM as a function of annual CO2 injected is presented in

Figure 6.11 and Figure 6.12 for the Low and High Price Regime respectively. In
contrast to the results presented for vertical wells, the relative NPV is now measured
against the best primary recovery scenario including horizontal wells. For the Low Price
Regime the best primary recovery scenario was Hor1-500 and for the High Price
Regime it was Hor1-250 (see 6.3.1). The economics for the most profitable vertical well
spacing (S500) are also presented - also relative to the best primary recovery scenario
inclusive of horizontal wells - to allow assessment over the favourable well type for
172
Storage-ICBM. The analysis shows that while horizontal wells achieve a higher primary
recovery NPV (Figure 6.3) vertical wells are preferable for Storage-ICBM above an
injection rate of approximately 2 Mt/yr/100 km2. For the Low Price Regime the best
horizontal well spacing (Hor1-500) is only very marginally economic and only over a
range of ~1.5 to ~3 Mt/yr/100 km2.
Vertical wells are also preferable for the High Price Regime when the injection rate is
greater than ~2 Mt/yr/100 km2, though Storage-ICBM with horizontal wells is also
economic.
Hor1-500 Hor2-500 Hor3-500 Hor1-1000

Hor2-1000 Hor3-1000 S500 Hor1-250
200
2
100
0
0 1 2 3 4 5 6 7 8 9 10 11
-100
-200
-300
-400
Figure 6.11: Relative NPV of Storage-ICBM as function of injection rate for horizontal wells and
the best vertical well spacing (S500) for the Low Price Regime – high permeability.
173
Hor1-500 Hor2-500 Hor3-500 Hor1-1000
Hor2-1000 Hor3-1000 S500 Hor1-250
1,200
Relative NPV high, A$M/100 km 2
1,000
800
600
400
200
0
-200 0 1 2 3 4 5 6 7 8 9 10 11
-400
-600
-800
the best vertical well spacing (S500) for the High Price Regime – high permeability.
The favourable economics of vertical wells over horizontal wells for Storage-ICBM are
a result of the better cost-benefit ratio. For the high permeability scenario the only
advantage of horizontal wells is that gas recovery is accelerated. The injection rate is
not limited by fracture opening pressure but by time to breakthrough. The annual
injection rate is the same, but the well costs are higher and breakthrough occurs earlier.
With respect to horizontal wells, the analysis shows that the closest well spacing, Hor1-
500 (200 wells, see Table 6.3), has the highest relative NPV and the widest well
spacing, Hor3-1000 (50 wells), has the lowest NPV. Hor1-1000 and Hor3-500 have the
same number of wells (100 wells), but the profitability of Hor1-1000 is significantly
higher. Furthermore, Hor1-1000 outperforms Hor2-500 which has 17 producers and 17
injectors more. It highlights that selecting the appropriate well pattern is crucial. For
each of the three well arrangements presented in Figure 6.2 the shorter producer-injector
well distance (y-directional distance) of 500 m is preferable over the 1,000 m spacing.
However, the x-directional distance between producer-producer and injector-injector
has a larger impact on the economics than the y-directional distance between producer-
injector. This is because the driving force, i.e. the pressure gradient, in x-direction is
much smaller than the driving force in y-direction and thus flow in x-direction is
significantly slower.
174
6.3.4 STORAGE-ICBM IN MEDIUM PERMEABILITY COAL – 0.6 MD
(KI = 10 MD)
Vertical wells
For the medium permeability of 10 mD the evaluated well spacings are the same as for
the high permeability scenario – S250, S300, S500, and S750. During CO2 injection the
reservoir permeability decreases to 0.6 mD which proved to be insufficient to inject at
constant rates above ~22,000 m3/d/well for non-stimulated wells and ~44,000 m3/d/well
for fractured wells. For S500 this means that the maximum injection rate is ~3
Mt/yr/100 km2 and for S750 less than 1 Mt/yr/100 km2. Thus, S750 does not exhibit
potential for large scale CO2 sequestration. If quantities above 3 Mt/yr/100 km2 have to
be sequestered, a tighter well spacing is necessary. S300 and S250 are both capable of
injecting up to 8 Mt/yr/100 km2 (S300) and more (S250) (see Figure 6.13).
Figure 6.13 and Figure 6.14 illustrate that for both the Low and the High Price Regime
CO2 can be stored economically for injection rates of 1 – 11.5 Mt/yr/100 km2 in the
medium permeability coal (0.6 mD). The highest relative NPV is obtained for an
injection rate of ~8 Mt/yr/100 km2 for S300 (about A$M360/100 km2 and
A$M1,600/100 km2 for the Low and the High Price Regime respectively) corresponding
to an injection rate of ~44,000 m3/d/well. The well spacing S750 has no economic
potential for the permeability of 0.6 mD.
175
S250 S300 S500 S750
400
2
300
200
100
0
0 1 2 3 4 5 6 7 8 9 10 11 12
-100
-200
-300
CO2 injected, Mt/yr/100 km2
function of annual CO2 injected for the Low Price Regime – medium permeability.
S250 S300 S500 S750

1600
1200
800
400
0
0 1 2 3 4 5 6 7 8 9 10 11 12
-400
-800
function of annual CO2 injected for the High Price Regime – medium permeability.
176
Horizontal wells
For the high permeability of 100 mD (final permeability of 6 mD) vertical wells were
demonstrated to be favourable over horizontal wells for Storage-ICBM. For the medium
permeability the preferential well type appears to be a function of the annual CO2
injected and the price regime. As it was established in section 6.3.3 that Hor1 is the best
performing horizontal well pattern, the other two well patterns (Hor2 and Hor3 - see
Figure 6.2) are not considered.
Under the Low Price Regime CO2 can be stored economically from ~2 - ~9 Mt/yr/100
km2 (Figure 6.15). Horizontal wells are more profitable than vertical wells up to an
injection rate of 5 Mt/yr/100 km2. Above this rate fracture opening pressure is reached
for Hor1-500 and the vertical well spacing S300 is the most profitable spacing. The
highest relative NPV is achieved for an injection rate of ~8 Mt/yr/100 km2 for S300
(~A$M200/100 km2; injection rate ~44,000 m3/d/well).
Hor1-250 Hor1-500 Hor1-750

S300 S500 S250
300
2
200
100
0
0 1 2 3 4 5 6 7 8 9 10 11 12
-100
-200
-300
the best vertical well spacing (S300 and S500) for the Low Price Regime – medium permeability.
For the high prices (Figure 6.16) the cross-over injection rate (the rate at which the
preference of horizontal over vertical wells changes) decreases from ~5 to ~4 Mt/yr/100
km2. Injection is economically viable above ~0.5 Mt/yr/100 km2 up to the highest rate
177
possible of ~11.5 Mt/yr/100 km2. The highest NPV of ~A$M 1,300/100 km2 is obtained
for an injection rate of ~8 Mt/yr/100 km2 (S300).
Hor1-250 Hor1-500 Hor1-750

S300 S500 S250
1,400
Relative NPV high A$M/100 km 2
1,200
1,000
800
600
400
200
0
-200 0 1 2 3 4 5 6 7 8 9 10 11 12
-400
the best vertical well spacing (S300 and S500) for the High Price Regime – medium permeability.
6.3.5 STORAGE-ICBM IN LOW PERMEABILITY COAL – 0.06 MD

(KI =1 MD)
Figure 6.3 indicated that none of the primary recovery scenarios exhibited a positive
NPV for the low permeability scenario (even though a wide range of possible well
spacings were evaluated). Therefore, it is assumed that the primary recovery project
does not go ahead and the highest primary NPV is defined as zero In this case Storage-
ICBM is equivalent to CO2-ECBM and thus the NPV of CO2-ECBM is that of Storage-
ICBM. The economics are not derived on an incremental basis, but all costs and
revenues are accounted for in Storage-ICBM.
During the injection process the already low initial coal permeability of 1 mD decreases
further to 0.06 mD due to CO2 adsorption. As a consequence, the maximum constant
injection rate per well is less than 5,000 m3/d for fractured vertical wells. This means for
the low permeability scenario tight well spacings are necessary if significant quantities
of CO2 are to be injected. The vertical well spacings considered are S150 (150 x 150
178
m2), S250 (250 x 250 m2), and S500 (500 x 500 m2). Due to the injection rate
limitations, S250 injects less than 1.5 Mt/yr/100 km2 and S500 less than 0.4 Mt/yr/100
km2 of CO2. Thus, horizontal wells are necessary to store significant quantities of CO2
in low permeability coal seams. However, even with horizontal wells, a close spacing of
150 m is necessary to inject CO2 at rates up to ~5 Mt/yr/100 km2 (see Figure 6.17)
corresponding to a well injection rate of ~22,000 m3/d (Hor1-150). This is the
maximum rate at which injection can be kept constant for the reservoir permeability of
0.06 mD. The well distances considered were 150 m, 250 m, and 500 m for Hor1 (Hor1-
150, Hor1-250, and Hor1-500).
Figure 6.17 demonstrates that under the Low Price Regime, CO2 cannot be stored in an
economically viable manner in the low permeability coal seam. S150 is not presented,
because its NPV is significantly below that of S250 and S500. The highest NPV
(~A$M-50/100 km2) is obtained for a horizontal well distance of 250 m and an injection
rate of ~2.5 Mt/yr/100km2 or ~19,000 m3/d/well.
Storage-ICBM in low permeability seams does exhibit economic potential under the
High Price Regime as demonstrated in Figure 6.18. CO2 can be stored economically for
injections rates from ~0.5 to ~5 Mt/yr/100 km2. For a given spacing, the highest
possible injection rate is the most economic. The injection rate of 5 Mt/yr/100 km2 (for
Hor1-150) yields the highest NPV (~A$M1,150/100 km2).
S250 S500 Hor150 Hor250 Hor500

0
2
0 1 2 3 4 5 6
-100
-200
-300
-400
-500
-600
-700
-800
Figure 6.17: Relative NPV of Storage-ICBM as function of injection rate for horizontal and vertical
wells for the Low Price Regime – low permeability.
179
S250 S500 Hor150 Hor250 Hor500
1,400
1,200
1,000
800
600
400
200
0
-200 0 1 2 3 4 5 6
-400
wells for the High Price Regime – low permeability.
6.3.6 RESULTS - EFFECT OF PERMEABILITY
Maximum NPV as a function of injection rate and permeability

To illustrate the effect of permeability on Storage-ICBM economics the highest NPV as
a function of injection rate independent of well spacing or type is selected for each
permeability and plotted in Figure 6.19 and Figure 6.20 for the Low and the High Price
Regime respectively. The figures summarise the results from the previous sections.
Sudden steep decreases in the figures are a result of the limitations in well injection rate
that make a switch to a tighter spacing necessary when higher annual injection rates are
required (applies to k = 0.6 mD and k = 0.06 mD).
Both Figure 6.19 and Figure 6.20 indicate that the highest permeability of 6 mD (ki =
100 mD) does not necessarily yield the highest relative NPV of Storage-ICBM, but that
the application of CO2-ECBM to lower permeability seams could be more beneficial.
For the low prices up to an injection rate of ~4 Mt/yr/100 km2 the maximum relative
NPV for the medium and the high permeability scenarios is comparable. Above that rate
the medium permeability yields a higher NPV until it decreases steeply when maximum
reservoir pressure is reached and a less profitable spacing has to be used to inject more
than 8 Mt/yr/100 km2 of CO2. Storage-ICBM in the low permeability seam is not
180
economic. The maximum relative NPV of A$M200/100 km2 was determined for the
medium permeability seam for an injection rate of ~8 Mt/yr/100 km2.
For the High Price Regime Storage-ICBM in the low permeability seam is most
profitable up to an injection rate ~5 Mt/yr/100 km2. Higher injection rates are not
considered for this permeability due to the already short distance between producer and
injector of 150 m. Above 5 Mt/yr/100 km2 Storage-ICBM in the medium permeability
seam is the best option. Storage-ICBM in the high permeability seam exhibits the
lowest NPV (although it is also positive). For the high price scenario CO2 injection adds
more value to the low and medium permeability reservoirs than to the high permeability
seams. This is caused by two factors; 1) incremental gas recovery is highest for the low
permeability seam (because here Storage-ICBM is equal to CO2-ECBM), followed by
the medium permeability seam, and then the high permeability seam (see Figure 6.8);
and 2) the cumulative CO2 injected is highest for low permeability coals, followed by
medium permeability coals, and then high permeability coals as with decreasing
permeability breakthrough is increasingly delayed thus allowing a longer injection life.
k=1 k = 10 k = 100
300
Relative NPV low, A$M/100 km 2
200
100
0
0 1 2 3 4 5 6 7 8 9 10 11
-100
-200
-300
-400
-500
Figure 6.19: Maximum relative NPV as a function of injection rate for low, medium, and high
permeability for the Low Price Regime.
181
k=1 k = 10 k = 100

1400
1200
1000
800
600
400
200
0
0 1 2 3 4 5 6 7 8 9 10 11

permeability for the High Price Regime.
A qualitative summary of economically feasible injection rate ranges is presented in

Figure 6.21. For the High Price Regime Storage-ICBM is economic over the whole
range of investigated injection rates for the three levels of permeability. The range of
economic injection rates narrows with decreasing permeability under the Low Price
Regime. Storage-ICBM in the low permeability seam is not economic.
100 - High
Permeability, mD - Price Regime
100 - Low
10 - High
10 - Low
uneconomic
1 - High economic
uneconomic
1 - Low
0 1 2 3 4 5 6 7 8 9 10
2
CO2 injection rate, Mt/yr/100km
Figure 6.21: Injection rate ranges over which Storage-ICBM is economic for k = 1mD, 10 mD, and
100 mD for the Low and the High Price Regime.
182
Changes in profitability for constant injection rates
Figure 6.22 highlights how the maximum relative NPV changes as a function of
permeability for a constant injection rate. The relative NPV for an injection rate of ~1.5
and ~5 Mt/yr/100 km2 is presented both for the Low and High Price Regime. When the
prices for gas and CO2 are low, the low permeability reservoir is least favourable for
Storage-ICBM. Higher prices, however, reverse the profitability and low permeability
coals exhibit the highest relative NPV of Storage-ICBM.
1.5 Mt/yr - Low prices 5 Mt/yr - Low prices

1.5 Mt/yr - High prices 5 Mt/yr - High prices
1,200
Relative NPV, A$M/100 km2
1,000
800
600
400
200
0
1 10 100
-200
-400
Log Permeability, mD
Figure 6.22: The effect of permeability on project economics for constant injection rates of ~1.5
Mt/yr/100 km2 and ~5 Mt/yr/100 km2.
Maximum storage capacity

If a positive price was associated with the injection of CO2 it is likely that a storage
operator would try to maximise the profit by exhausting the full storage capacity of the
seam. The production well would be shut-in when breakthrough is observed, but CO2
injection would continue until fracture opening pressure at the injection well is reached.
This means that the cumulative CO2 injected would become independent of the time to
breakthrough, but would be determined by the adsorption capacity and the maximum
allowable final reservoir pressure (here: 15,000 kPa).
183
Figure 6.23 and Figure 6.24 show the results presented earlier in comparison to the
relative NPV when the maximum storage capacity is utilised for the S500 spacing
(S500-Max) for the high permeability seam. The profitability of Storage-ICBM in the
high permeability seam improves notably, though, it is still slightly lower (Low Price
Regime) or only marginally higher (High Price Regime) than for the medium
permeability seam (up to ~8 Mt/yr/100 km2 above which the profitability of Storage-
ICBM in medium permeability coal notably decreases). For the medium and low
permeability coal seams the storage capacity is not maximised. Their respective NPVs
would also increase if the storage potential was fully utilised. This indicates that even
when the storage capacity is maximised, thus eliminating the negative effect of early
breakthrough on CO2 revenues, high permeability coals are not necessarily the best
option for Storage-ICBM. This is because incremental recovery from high permeability
reservoirs is lower.
k=1 k = 10
k = 100 k = 100 S500-Max
300
200
100
0
0 1 2 3 4 5 6 7 8 9 10 11
-100
-200
-300
-400
-500
Figure 6.23: Maximum relative NPV as a function of injection rate for low, medium and high
permeability reservoirs for the Low Price Regime in comparison to the NPV of S500-Max.
184
k=1 k = 10

k = 100 k = 100 S500-Max
1400
1200
1000
800
600
400
200
0
0 1 2 3 4 5 6 7 8 9 10 11
permeability reservoirs for the High Price Regime in comparison to the NPV of S500-Max.
6.4 SENSITIVITY TO GAS CONTENT AND SEAM SATURATION

In this section the economic feasibility of Storage-ICBM in coal of varying gas contents
/ gas saturations is investigated for the high permeability seam (100 mD). It was shown
in Chapter 5 that the economics of Storage-ICBM improve with increasing gas content,
while the relationship between the economics and gas saturation is not as straight
forward. Flow behaviour in a severely undersaturated seam differs from that in a fully
saturated seam in that significant quantities of water will have to be recovered first
before gas flow occurs. Depending on the dewatering rate, the project could run for
years without generating income. While the coal gas content may be identical, the
profitability is not. The seam saturation is a key factor for production economics. In this
analysis, to include the effect of seam saturation the Langmuir data is kept constant
while the gas content is decreased. This procedure results in significantly undersaturated
seams representative of shallow brown coals such as those often found in Victoria,
Australia.
The analysis is performed using an approach analogous to the investigation of the effect
of reservoir permeability on operational parameters. First, primary recovery economics
are established followed by an evaluation of the effect of CO2 injection on the
185
cumulative CO2 injected and incremental CBM recovery. Then, the effect of gas content
/ undersaturation on Storage-ICBM economics is evaluated.
The gas contents considered with regards to their effects on the profitability of Storage-
ICBM are 7.5 m3/t (medium gas content) and 3.75 m3/t (low gas content). The
corresponding seam saturations are 40% and 20% and the desorption pressures are 950
kPa and 385 kPa respectively. The original gas content of 12.75 m3/t (high gas content)
corresponds to a seam saturation of 68% (desorption pressure 2,400 kPa - see Chapter
3). The results for the high gas content are those as presented in section 6.3.3 for the
high permeability coal.
6.4.1 PRIMARY RECOVERY ECONOMICS – F(GC)
Analogous to section 6.3.1, the best primary recovery scenario as a function of gas
content / seam saturation has to be determined before Storage-ICBM economics can be
evaluated. The results are presented in Figure 6.25.
As was indicated in section 6.3.1, with respect to primary recovery horizontal wells
achieve higher NPVs than vertical wells (Figure 6.25). Hor1-500 is best for the Low
Price Regime and Hor1-250 is preferable for the High Price Regime for both medium
and high gas content coals (7.5 m3/t and 12.75 m3/t – 60% and 30% undersaturated
seam respectively). With respect to vertical wells for the Low Price Regime the most
profitable spacing is S500 for medium gas content coals and S300 for high gas content
coals. For the High Price Regime S300 is best for medium gas content coals and S250 is
most profitable for high gas content coals. These are the cases against which the CO2-
ECBM scenarios are compared to evaluate Storage-ICBM economics.
For the low gas content, highly undersaturated (80%) coals none of the investigated well
spacings exhibits a positive NPV for the assumptions made in this thesis. The least
negative NPV is determined for Hor1-1000 for both price regimes. Analogous to section
6.3, for the purpose of this study it is assumed that a project with a negative NPV is not
further pursued and thus for the analysis of Storage-ICBM the NPV of CBM in low gas
content / highly undersaturated reservoirs is defined as zero. This means the economics
of Storage-ICBM are equivalent to those of CO2-ECBM.
186
1,400
Maximum NPV CBM, A$M/100km 2 1,200 $8.0/GJ

$5.0/GJ
1,000 $4.2/GJ
800
600
400
200
0
3.75 - V 3.75 - H 7.5 - V 7.5 - H 12.75 - V 12.75 - H
Gas content (m 3/t) - Well Type

Figure 6.25: Maximum NPV of primary recovery for the three gas content / saturation levels and
the three gas prices for vertical (V) and horizontal (H) wells.
6.4.2 CO2 INJECTION PERFORMANCE – F(GC)
The effect of CO2 injection rates and well spacing on cumulative CO2 injected and
incremental CBM recovery was discussed in detail in section 6.3.2. It was demonstrated
that the cumulative CO2 injected is largely determined by the well injection rate and that
horizontal wells inject less CO2 over time than vertical wells (Figure 6.6). Relative to
the high gas content / high permeability scenario the decrease in gas content to 7.5 m3/t
and 3.75 m3/t and the associated increase in undersaturation result in a slight increase in
cumulative CO2 injected (Figure 6.26). This is caused by a delay in CO2 breakthrough
time as a result of the combination of two factors; 1) with growing undersaturation more
water has to be moved before gas flow occurs; and 2) the decrease in permeability with
increasing undersaturation described in section 6.3.3 – Effect of permeability on
injection rates impedes flow in the reservoir.
187
70
60
Mt/100km 2 50
40
12.75-S250 12.75-S300
30
12.75-S500 12.75-S750
20 7.5-S300 7.5-S500
7.5-S750 3.75-S300
10 3.75-S500 3.75-S750
0
0 20 40 60 80 100 120 140 160
CO2 injected, m 3/d/well
Figure 6.26: Cumulative CO2 injected as a function of well injection rate for low, medium, and high
gas content reservoirs – vertical wells only.
Relative incremental recoveries (for vertical wells only) are summarised in Figure 6.27
which highlights that even though the medium gas content scenario has more than 40%
less gas in place, incremental recoveries are comparable to those of the high gas content
scenario. This is because only 57% of the gas in place is recovered economically during
primary recovery. In comparison, for the high gas content coal the best primary
recovery scenario economically recovers 76% of gas in place. Thus, approximately the
same volume of gas is available for enhanced recovery processes for the low and the
medium gas content reservoirs (see Table 6.5). The low gas content seam exhibits the
highest incremental recoveries on average because it is assumed that primary recovery
would not be performed due to the negative NPV. Thus, 100% of the GIP is available
for Storage-ICBM.
188
12.75-S250 12.75-S300 12.75-S500 12.75-S750
7.5-S300 7.5-S500 7.5-S750 3.75-S300
3.75-S500 3.75-S750
3,000
Relative incremental recovery,
Mm 3/100 km 2 2,500
2,000
1,500
1,000
500
0
0 1 2 3 4 5 6 7 8 9 10 11 12
Figure 6.27: Relative incremental CBM recovery as a function of annual CO2 injection rate for low,
medium, and high gas content coals – vertical wells only.
Table 6.5: Gas recoveries for the high, medium and low gas content coal relative to the high gas
content scenario (12.75 m3/t).
Initial gas Percentage CBM CBM recovered as Gas

content of OGIP recovered percentage of OGIP remaining
m3/t % % % % of OGIP
12.75 100 70 76 24
7.5 59 57 34 25
3.75 30 0 0 30
6.4.3 MEDIUM GAS CONTENT – 7.5 M3/T (KF = 3.5 MD)
The relative NPV of Storage-ICBM for the Low and the High Price Regime as a
function of CO2 injection rate for both vertical and horizontal wells is presented in
Figure 6.28 and Figure 6.29 respectively (relative to the best primary recovery scenario
inclusive of horizontal wells). Both figures highlight that, similar to the high gas content
coals, for the medium gas content reservoir vertical wells exhibit better economics than
horizontal wells.
For the Low Price Regime the highest relative NPV is achieved for the vertical well
spacing S500 at a CO2 injection rate of ~5 Mt/yr/100 km2. For a range of ~3 - ~4
189
Mt/yr/100 km2 S750 is the most economic spacing, but its maximum injection rate is
limited to ~4 Mt/yr/100 km2 due to coal swelling and the associated decrease in
permeability from 100 mD to 3.5 mD. For the Low Price Regime the injection of CO2 is
financially feasible over a range of ~1.5 – ~9 Mt/yr/100 km2.
S300 S500 S750

Hor1-500 Hor1-1000
150
Relative NPV low, A$M/100 km2
100
50
0
0 1 2 3 4 5 6 7 8 9 10
-50
-100
-150
-200
CO2 injection rate, Mt/yr/100 km2
wells for the Low Price Regime – medium gas content.
For the High Price Regime the best spacing is a function of injection rate; above
~4 Mt/yr/100 km2 it is S500, below that rate the tighter spacing S300 performs better.
The most economic injection rate is ~9 Mt/yr/100 km2, however, all spacings show a
positive NPV and injection is economic over the range of ~1 – ~9 Mt/yr/100 km2.
190
S300 S500 S750
Hor1-500 Hor1-1000
800
600
400
200
0
0 1 2 3 4 5 6 7 8 9 10
-200
-400
CO2 injection rate, Mt/yr/100 km 2
wells for the High Price Regime – medium gas content.
6.4.4 LOW GAS CONTENT – 3.75 M3/T (KF = 2.3 MD)
Storage-ICBM in the low gas content seam could be marginally economic under the
Low Price Regime. The wide spacing of S750 exhibits the highest potential, but is
limited to an injection rate of about 3.3 Mt/yr/100 km2 (Figure 6.30) due to a
permeability decrease to 2.3 mD. A tighter spacing (S500) is required above this rate
which does not appear profitable. Storage is economic from approximately 2 – 3.3
Mt/yr/100 km2.
For the High Price Regime, however, CO2 injection is profitable over the range of
investigated injection rates (~0.5 – ~9 Mt/yr/100 km2) as indicated in Figure 6.31. The
most profitable case is S500 injecting ~7Mt/yr/100 km2.
191
S300 S500 S750
Hor1-500 Hor1-1000
100
2
0 1 2 3 4 5 6 7 8 9 10
-100
-300
-500
CO2 injection rate, Mt/yr/100 km 2
wells for the Low Price Regime – low gas content.
S300 S500 S750

Hor1-500 Hor1-1000
1,200
1,000
800
600
400
200
0
0 1 2 3 4 5 6 7 8 9 10

wells for the High Price Regime – low gas content.
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6.4.5 RESULTS – EFFECT OF GAS CONTENT AND UNDERSATURATION
Maximum NPV as a function of injection rate and gas content / gas saturation
Vertical wells were found to be preferable over horizontal wells independent of the gas
content / gas saturation. Furthermore, the operational parameters were not largely
affected by a change in these properties; the spacing S500 is preferable over a wide
range of injection rates and price regimes as indicated in the previous sections. Only
when prices are low and the gas content decreases significantly does a wider spacing
(S750) become more profitable.
Figure 6.32 and Figure 6.33 present the maximum relative NPV of Storage-ICBM
(independent of well spacing and type as described in section 6.3.6 – Maximum NPV as
a function of injection rate and permeability) as a function of injection rate for the three
different gas contents levels for the Low and the High Price Regime respectively. The
discontinuities in the graphs are a result of changes in well spacing when either a higher
injection rate was required or a different spacing exhibited a higher relative NPV.
It was highlighted in Table 6.5 that for the three scenarios the GIP available for Storage-
ICBM is comparable. However, Figure 6.32 illustrates that Storage-ICBM in the low
gas content seam is notably less economic than in the medium and high gas content
coals under the Low Price Regime. The low gas content scenario shows the highest
incremental recoveries (Figure 6.27), but also has significantly higher costs than the
other two scenarios as primary recovery is not considered and thus all costs (for all
production wells and infrastructure) are carried by Storage-ICBM.
For the High Price Regime low and high gas content coals exhibit a very similar
maximum NPV curve while the medium gas content scenario performs worse (Figure
6.33). The higher prices more than compensate for the higher costs of wells and
infrastructure of the low gas content scenario. With rising prices Storage-ICBM in low
gas content coals would become increasingly more economic than Storage-ICBM in
high gas content coals.
While the cumulative incremental gas recovery from the medium gas content coals is
comparable to that of the high gas content coals (Figure 6.27 and Table 6.5), the
production performance is quite different. This is indicated in Figure 6.34. Production
for the high gas content coals peaks almost immediately, whereas for the less saturated
193
coals water production delays peak recovery. Later recoveries are less beneficial with
respect to the project’s NPV. Thus, when the prices increase, the disparity in Storage-
ICBM profitability between the medium and the high gas content scenario grows.
3.75 m3/t 7.5 m3/t 12.75 m3/t

200
100
0
0 1 2 3 4 5 6 7 8 9 10 11
-100
-200
-300
CO2 injected, Mt/yr/100 km2
Figure 6.32: Maximum relative NPV as a function of injection rate for low, medium, and high gas
content for the Low Price Regime.
3.75 m3/t 7.5 m3/t 12.75 m3/t

1200
1000
800
600
400
200
0
0 1 2 3 4 5 6 7 8 9 10 11
Figure 6.33: Maximum relative NPV as a function of injection rate for low, medium, and high gas
content for the High Price Regime.
194
4,000
3,500 CO2-ECBM MG
Rate, m 3/d/100 km 2 3,000 CO2-ECBM HG
2,500
2,000
1,500
1,000
500
0
0 5 10 15 20 25 30
Time, years
Figure 6.34: CO2-ECBM recovery rates per 100 km2 for S500 - CO2 injection rate 44,000 m3/d/well
for the medium gas (MG) and high gas content (HG) coals respectively. Presented are absolute
rates, not incremental rates.
It was discussed previously (section 6.3.2 – Effect of permeability on injection rates)

that the larger decline in initial permeability for the lower gas content coals was a result
of the greater swelling differential due to the larger net gas content change when the
initial reservoir gas is displaced by CO2. In practice, for a fully CO2 saturated seam each
case should exhibit comparable reservoir permeabilities. If this was the case and the
reservoir permeability for the gas contents of 7.5 m3/t and 3.75 m3/t would not fall
below 6 mD, the same injection rates as for the high gas content scenario would be
possible. This would improve the economics for the S750 spacing and enable injection
rates of up to ~10 Mt/yr/100 km2 for the S500 spacing. The sudden decline in NPV for
the medium and the low gas content coals as observed in Figure 6.32 and Figure 6.33
would occur at higher injection rates, thus increasing the relative NPV. However, the
decrease in permeability should not affect the overall finding that for low prices
Storage-ICBM in high gas content coals is most economic while for high prices the
profitability of Storage-ICBM in high and low gas content coals becomes comparable.
The economic injection rate ranges for the three gas content levels are highlighted in
Figure 6.35 which shows that for the High Price Regime Storage-ICBM is economically
feasible for basically all trialled injection rates. For the Low Price Regime, however, the
feasible injection rate range decreases with decreasing gas content and Storage-ICBM
195
for the low gas content seam is only feasible for injection rates ranging from
approximately 2 – 3 Mt/yr/100 km2.
12.75 - high
Gas content, m 3/t - Price Regime
12.75 - low
7.5 - high
7.5 - low
3.75 - high
3.75- low
uneconomic 0 1 2 3 4 5 6 7 8 9 10
economic
uneconomic
CO2 injection rate, Mt/yr/100km 2
Figure 6.35: Injection rate ranges over which Storage-ICBM is economic for Gc = 12.75 m3/t (Sg =
70%), Gc = 7.5 m3/t (Sg = 40%), and Gc = 3.75 m3/t (Sg = 20%) for the Low and the High Price
Regime.
Effect of seam saturation

For a constant gas content a higher degree of seam saturation is expected to be
detrimental with respect to the profitability of Storage-ICBM. It generally increases the
profitability of CBM as more gas is recovered faster, thus decreasing the gas available
for Storage-ICBM. This is demonstrated in Figure 6.36 which presents the relative NPV
of the S500 spacing for the medium gas content coals (7.5 m3/t) for seam saturations of
40% and 70%. However, this does not imply that CO2-ECBM is less profitable for the
higher saturated seam. It merely demonstrates that CO2 injection is more beneficial
when applied to undersaturated seams where it can significantly enhance and accelerate
recovery than to saturated seams that already exhibit high primary recovery rates.
196
S500-40% - low prices S500-40% - high prices
S500-70% - low prices S500-70% - high prices
1,200
Relative NPV, A$M/100 km 2
1,000
800
600
400
200
0
0 1 2 3 4 5 6
2
CO2 injection rate, Mt/yr/100 km
Figure 6.36: Relative NPV (vertical wells) for 40% and 70% saturated coals (Gc = 7.5 m3/t) for
S500.
6.5 SUMMARY AND APPLICABILITY OF RESULTS

The operating parameters (well type, spacing and number, annual and well injection
rates) yielding the highest NPV for a given set of reservoir properties and CO2 and gas
price combination are summarised in Table 6.6. Table 6.6 also presents the best
operational design representative of current economic conditions, i.e. gas price of
A$4.20/GJ and no price for CO2 (but also no CO2 cost). These results were not further
discussed in this section for two reasons; 1) the NPV was negative for all Storage-
ICBM scenarios; and 2) it is safe to expect that CCS / CO2 storage would only be
carried out if an incentive for storing CO2 applied.
197
Table 6.6: Operating parameters yielding the highest NPV for specified combinations of reservoir
permeability, gas content, and prices.
Well Spacing /
k Gc Price Injection rate Economic?
type Injection well#
1 12.75 Current Hor Hor1-500 / 200 ~1 Mt/yr / 11k m3/d/well No
1 12.75 Low Hor Hor1-250 / 400 ~2.5 Mt/yr / 19k m3/d/well No
1 12.75 High Hor Hor1-150 / 666 ~5 Mt/yr / 22k m3/d/well Yes
10 12.75 Current Ver S500 / 200 ~3 Mt/yr / 44k m3/d/well No
10 12.75 Low Ver S300 / 556 ~8 Mt/yr / 44k m3/d/well Yes
10 12.75 High Ver S300 / 556 ~8 Mt/yr / 44k m3/d/well Yes
100 7.5 Current Ver Hor1-1,000 ~1 Mt/yr / 22k m3/d/well No
S500 / 200, ~5 Mt/yr / 77k m3/d/well,
100 7.5 Low Ver Yes
S750 / 67 ~4 Mt/yr / 131k m3/d/well
Table 6.6 illustrates the following points:
For the same reservoir properties, with increasing CO2 and gas prices, higher
injection rates become favourable.
For the same reservoir properties, with increasing CO2 and gas prices, tighter
well spacings become favourable.
With increasing permeability larger well spacings become favourable.
With increasing permeability vertical wells become favourable.
With decreasing gas content wider spacings become more profitable.
Table 6.6 can be used as a general guide to determine the best operational development
for a field, though the results as they are presented here are only directly applicable
using the same assumptions presented in this thesis. The effect of changes in reservoir
properties is discussed next in section 6.6. Variations in capital and operating costs,
particularly well costs, could also affect the optimum well spacing (see section 6.6).
All results presented in section 6.3 and 6.4 are relative NPVs highlighting the
profitability of Storage-ICBM over the best primary recovery case. The profitability of
198
Storage-ICBM strongly depends on the profitability of CBM. For example, if in this
analysis primary recovery economics were to be better than predicted, the profitability
of Storage would decrease. If costs were cheaper than estimated here, the economic life
of CBM would extend and leave less gas in place available for Storage-ICBM. The
economic feasibility of Storage-ICBM would also decrease if production could not
occur unconstrained, but was limited by contractual obligations or demand. However,
this would also affect CBM, but probably to a lesser degree.
6.6 QUALITATIVE DISCUSSION OF OTHER FACTORS

AFFECTING THE ECONOMIC FEASIBILITY OF
STORAGE-ICBM
In addition to reservoir permeability and gas content other coal properties also affect the
economic feasibility of CO2 storage in coal. A qualitative discussion of the effect of
fracture opening pressure, coal swelling, Langmuir isotherm, depth to coal, and seam
thickness is presented and the findings are summarised in Table 6.7. Selected economic
parameters are also discussed. These are well costs, cost of compression, and the
discount rate.
6.6.1 FRACTURE OPENING PRESSURE
In this thesis fracture opening pressure is estimated as 16,000 kPa so that a maximum
tolerable reservoir pressure of 15,000 kPa is specified. Injection rates that cannot be
maintained at a constant rate at or below this pressure over the life of a project are not
considered. This implies that if fracture opening pressure and thus maximum tolerable
reservoir pressure were higher, the maximum injection rates as a function of
permeability presented in Figure 6.4, section 6.3.2 – Effect of permeability on injection
rates would rise.
Higher fracture opening pressures could be feasible for seams located at greater depth,
since overburden pressure generally increases with depth. When a price is associated
with CO2 injection and storage, higher injection rates would improve the economics of
lower permeability reservoirs as demonstrated in section 6.3.4 and 6.3.5. For the
199
medium permeability coals (0.06 mD) the point at which vertical wells become
preferable over horizontal wells would be delayed. The impact would be less significant
for high permeability reservoirs (more than 1 mD) for which the high injection rates
resulted in very short breakthrough times.
Conversely, the maximum injection rate would decrease if fracture opening pressure
was lower, which is likely to be applicable for shallower coal seams. Again, this would
affect reservoirs of low permeability significantly more than high permeability
reservoirs. Annual injection rates would have to decrease or more wells would be
needed – both resulting in a decrease in profitability. However, Figure 6.18 shows that
even if the annual injection rate was halved, CO2-ECBM / Storage-ICBM in low
permeability coal could still be profitable for the High Price Regime.
6.6.2 COAL SWELLING AND COMPRESSIBILITY
Coal swelling associated with the adsorption of CO2 and coal compressibility affect the
maximum CO2 injection rate as these factors determine the reservoir permeability.
Higher coal swelling and stress than modelled here would decrease reservoir
permeability, thus lowering the maximum injection rate as well as gas production rates.
As the swelling strain is a linear function and rises with increasing adsorbed gas, the
degree of CH4 related swelling would also be affected (as long as the swelling strain is
not a result of a change in CO2 Langmuir isotherm). When during primary recovery
CH4 desorbs from the coal the increase in matrix shrinkage would result in higher
permeabilities and increased gas production. This would make the application of
Storage-ICBM less beneficial.
For coals exhibiting lower swelling strain and / or stress reservoir permeability would
decrease less during CO2 injection. Primary recovery rates would decrease and CO2
injection and enhanced recovery rates would increase if swelling was lower. Thus, the
profitability of Storage-ICBM would increase.
200
6.6.3 CH4 ISOTHERM AND SEAM SATURATION
The CH4 isotherm affects the initial gas content and the level of seam saturation. For a
seam of constant saturation the gas content increases when the CH4 Langmuir volume
increases. For a seam of constant gas content the seam saturation decreases with
increasing Langmuir volume. The effects of this were investigated in section 6.4. For
the same gas content, the application of Storage-ICBM is more beneficial for the more
undersaturated seam. Higher gas content at constant seam saturation increases the
economic viability of both CO2-ECBM and Storage-ICBM as more gas is available for
recovery.
6.6.4 CO2 ISOTHERM
A higher CO2 Langmuir volume increases the storage capacity for a constant reservoir
volume. Furthermore, more CO2 can be injected with the same number of wells
implying higher possible injection rates and higher storage related revenues. However,
gas recovery enhancement would be slower because more moles of CO2 are required to
displace one mole of CH4. Depending on the respective gas and CO2 prices there could
be trade-offs associated with an increase in CO2 Langmuir volume due to the gas
recovery delay. Although, the higher the CO2 price the more profitable are large CO2
sorption capacities. Reservoir permeability is also affected by CO2 adsorption and
decreases when the adsorbed content increases (assuming the linear swelling / gas
content relationship) due to increased coal swelling. This adversely affects injection and
gas recovery rates. A lower CO2 Langmuir volume results in less CO2 stored, earlier
breakthrough, but also faster gas recovery and a smaller decrease in initial permeability.
Whether or not an increase in CO2 Langmuir volume is beneficial with respect to

Storage-ICBM economics will depend on several factors – initial reservoir permeability,
swelling strain, price of gas, and price of CO2. It is likely that changes in the CO2
isotherm will affect the optimum injection rate – lower injection rates will be better for
smaller CO2 Langmuir volumes, while larger Langmuir volumes will require higher
annual injection rates.
If CO2 was a cost rather than a revenue stream, a higher CO2 Langmuir volume would
decrease the profitability of Storage-ICBM.
201
6.6.5 DEPTH TO COAL
The depth to coal affects the overburden pressure which subsequently affects fracture
opening pressure. Shallower coals would be expected to have lower fracture opening
pressures, but are generally known to have higher permeabilities as a result of the
smaller overburden pressure. The first would decrease maximum injection rates, the
latter increases them. Furthermore, assuming that coal seams generally exhibit
hydrostatic pressure conditions, a change in depth can affect the gas in place as with
increasing reservoir pressure more gas is adsorbed.
6.6.6 SEAM THICKNESS
Seam thickness does not affect reservoir permeability, but it does affect the available
gas in place, the volumetric gas flow, and the CO2 storage capacity. More gas could be
recovered and more CO2 injected for the same well number. A thicker seam enables
higher CO2 injection rates and the optimum injection rate would increase and, because
of the higher gas in place, tighter well spacings would become more profitable.
Assuming the cost of injecting CO2 is less than the revenue for the CO2 injected, the
profitability will improve with increasing seam thickness.
However, many seams are not vertically continuous and the net thickness consists of a
number of individual thinner seams. For vertical wells that does not present a great
difficulty as it only means several zones have to be completed rather than just one. For
horizontal wells, though, it could mean that multi-lateral wells are required to intercept
all target coals. This would significantly increase well costs. Particularly the economic
feasibility CO2-ECBM / Storage-ICBM in low permeability reservoirs (less than 0.1
mD) would decrease as horizontal wells are necessary to inject significant quantities of
CO2. The effect would be amplified because for the low permeability coals CO2-ECBM
is equivalent to Storage-ICBM.
202
Table 6.7: Reservoir properties affecting the profitability of Storage-ICBM and their consequences.
Property Direction of Impact on Storage-ICBM

change
Permeability Up Higher injection rates possible, but also higher primary
recoveries early CO2 breakthrough, lower
incremental recoveries with increasing prices relative
profitability of Storage-ICBM will decrease
Down Injection rate limited, but primary recoveries lower
higher incremental recoveries with increasing prices
relative profitability of Storage-ICBM will grow
Coal swelling Up Decreases permeability during CO2 injection lowers
injection and gas recovery rates; increases primary
recovery rates decreases profitability
Down Increases permeability higher injection and gas
recovery rates possible; lower primary recovery rates
increases profitability
Fracture Up Higher injection rates possible increases profitability
opening of lower permeability coals
pressure Down Injection rate limited more wells and/or horizontal
wells necessary decrease in profitability
Seam Up See CH4 isotherm – Down profitability decreases
saturation Down See CH4 isotherm – Up profitability increases
CH4 isotherm Up Saturation = constant more gas in place Storage-
ICBM profitability increases;
Gas content = constant saturation decreases
Storage-ICBM profitability increases
Down Saturation = constant less gas in place Storage-
ICBM profitability decreases;
Gas content = constant saturation increases
Storage-ICBM profitability decreases
CO2 isotherm Up Storage capacity increases, injection rates increase, gas
recovery is slower, permeability decreases if price
for CO2 then profitability likely to increase
Down Storage capacity decreases, injection rates decrease, gas
recovery is faster, initial permeability decreases less
if price for CO2 then profitability likely to decrease
Seam Up Profitability increases (if net price for CO2)
thickness Down Profitability decreases (if net price for CO2)
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6.6.7 WELL COSTS
Lower well costs would generally be assumed to improve the economics of Storage-
ICBM. However, they would also improve the economics of primary recovery. If
primary recovery reserves are increased, less gas is available for Storage-ICBM.
However, lower well costs are still expected to have a predominantly positive effect on
Storage-ICBM economics as gas recovery is not expected to be the only source of
revenue. Low well costs allow more wells to be drilled, thus increasing recovery and
annual injection rates. For higher well costs wider well spacings would become
increasingly favourable.
If the costs of horizontal wells were to decrease in comparison to vertical wells due to
further advancements in well technologies, the preference of vertical wells over
horizontal wells in high and medium permeability reservoirs (greater than 1 mD) would
decrease. For low permeability reservoirs (less than 0.1 mD) lower well costs would
significantly improve the profitability of Storage-ICBM as such reservoirs require tight
well spacings. Similarly, higher well costs would make Storage-ICBM in low
permeability coal significantly less attractive.
6.6.8 COMPRESSION COSTS
Changes in injection rate result in changes in compression costs. The more CO2 is
injected annually, the higher is the initial capital expenditure and the on-going operating
costs. This implies that an increase in compression costs would decrease the
profitability of each Storage-ICBM scenario. It could also result in lower optimum
injection rates. Lower compression costs on the other hand would make Storage-ICBM
more profitable and increase the relative profitability of high injection rates over lower
injection rates.
204
6.6.9 DISCOUNT RATE
The discount rate affects which well spacing and operational design is the most
economic. A high discount rate rewards production that occurs early during project life,
thus favouring tighter well spacings. Typically, applying a higher discount rate (here:
real discount rate 7%) would mean the present value of both CBM and CO2-ECBM
would decrease. However, if significant negative net cash flows occur towards the end
of a project, the NPV may increase for a higher discount rate. Because of the nature of
CO2-ECBM (i.e. accelerated gas recovery), it can be expected that while the overall
profitability of CO2-ECBM is likely to decrease, the relative profitability of Storage-
ICBM will increase when the discount rate increases.
6.7 CONCLUSIONS
The objective of this chapter was to establish screening criteria to enable identification
of target coals for economic Storage-ICBM and to determine the most effective means
of applying Storage-ICBM for given reservoir parameters and economic conditions. The
effect of reservoir permeability and gas content / gas saturation on the operational
design of Storage-ICBM was investigated and the effect of other reservoir properties on
the economic viability of Storage-ICBM was discussed.
As a consequence of the analysis being carried out on a comparative basis, all NPVs
presented are relative NPVs highlighting the profitability of Storage-ICBM over the
best primary recovery case. This means no assessment was performed as to which case
has the highest absolute NPV, but the focus was to determine the reservoirs to which the
application of Storage-ICBM adds the most value. It can be seen from the primary
recovery sections that the coals with favourable properties such as high gas content and
high permeability show the highest NPVs for CBM. However, this is generally one of
the reasons why they are not necessarily the prime candidates for CO2-ECBM.
Here, under the Low Price Regime with a net CO2 price of A$10/t and a gas price of
A$5/GJ for Storage-ICBM to be economically viable the minimum reservoir
permeability should not be less than 0.1 mD and the gas content should not be below
3.75 m3/t. When high prices apply (net CO2 price A$40/t, gas price A$8/GJ) even for
205
resulting reservoir permeabilities in the order of 0.01 mD does Storage-ICBM indicate
economic potential.
6.7.1 SCREENING CRITERIA FOR ECONOMIC STORAGE-ICBM
The primary finding of the analysis presented in this chapter is counterintuitive - high
permeability reservoirs are not necessarily the best candidates for CO2-ECBM. The
favourable permeability for Storage-ICBM is inversely related to CO2 prices and even
more so gas prices. Primary recovery from high permeability coal is already highly
profitable and leaves little incremental gas in place. Higher injection rates are possible,
however, they result in increasingly early CO2 breakthrough. Furthermore, the
application of Storage-ICBM is more beneficial to undersaturated than to saturated
reservoirs due to the lower reserves recovered during primary recovery. The relative
benefit of Storage-ICBM is greater for coal reservoirs that are less economic to start
with.
For reservoirs that are not economic without the incentives provided for CO2 storage the
injection of CO2 could potentially transform an unprofitable primary recovery project
into an economically sustainable CO2-ECBM project. This was demonstrated for the
low permeability and the low gas content / highly undersaturated seams. A further
benefit of this would be the exploitation of an energy resource that may have otherwise
remained untapped and thus contributes to a nation’s energy independence.
6.7.2 PRELIMINARY OPERATING GUIDELINES
An optimum injection rate exists, but varies as a function of prices and reservoir
properties, though for a constant well spacing the highest possible injection rate is
generally the most profitable. Only for coals with a permeability over 6 mD this is not
always the case.
The analysis shows that independent of the gas content vertical wells are favourable
when the reservoir permeability does not fall below 1 mD. Since for primary recovery
horizontal wells were indicated to yield the highest NPV, replacing horizontal wells
with vertical wells constitutes considerable savings in capital expenditure as vertical
206
wells are less than a quarter of the cost of horizontal wells in this analysis. Lower initial
capital investments also assist in decreasing project risk.
For permeabilities between 0.1 and 1 mD the favourable well type is a function of CO2
and gas prices. Vertical wells exhibit better economics when higher injection rates are
necessary, while horizontal wells are better for lower injection rates. For a reservoir
permeability of less than 0.1 mD horizontal wells are necessary to store significant
quantities of CO2. It was observed that the arrangement of the horizontal wells is of high
importance and for the same well number project economics can be maximised by
selection of the most appropriate well pattern. A distance as short as possible between
producer-producer and injector-injector has a larger impact than the distance between
producer-injector.
The intermediate well spacing of S500 is economic across a wide range of injection
rates and price regimes. However, with decreasing permeability tighter well spacings
are necessary to store considerable quantities of CO2 and thus these become
increasingly more economic. This applies to both vertical and horizontal wells.
The operational parameters are not largely affected by a change in gas content / gas
saturation; only when prices are low and the gas content decreases significantly does a
wider spacing (S750) become more profitable than the intermediate spacing S500.
In the case of vertically discontinuous seams that require multi-lateral wells to access
the target coals, the relative profitability of Storage-ICBM compared to primary
recovery would further improve for medium and high permeability coal reservoirs and
make vertical wells more favourable. The profitability of Storage-ICBM in low
permeability seams would decrease, though, as more well are needed to intercept the
different seams.
Exhausting the storage capacity of a reservoir rather than abandoning injection at the
time of breakthrough would improve the economics of Storage-ICBM when the CO2
revenue exceeds the costs of CO2 storage.
207
7 INCORPORATING UNCERTAINTY INTO THE
ECONOMIC ASSESSMENT OF STORAGE-ICBM
7.1 INTRODUCTION
The previous analyses presented in this thesis were performed deterministically. A
deterministic analysis describes a certain outcome representative of a specific set of
parameters; it allows definition of best and worst case scenarios, but it does not offer
any information about the likelihood with which these are to occur. Due to the
heterogeneous nature of coal seams, each reservoir property is associated with a
significant degree of uncertainty. Furthermore, economic parameters are also subject to
uncertainty; for example due to economic conditions, changes in legislation (i.e. a
carbon tax), and technological advancements. There are various approaches for taking
account of this uncertainty in simulation; one widely used approach is Monte Carlo
simulation. Monte Carlo simulation is a probabilistic process during which key
reservoir inputs are selected and varied simultaneously within a range of values. The
ranges are usually defined based on knowledge about the reservoir or comparable
reservoirs [Schepers et al., 2010].
The objective of this chapter is the identification of the the conditions under which
Storage-ICBM has the highest probability of being financially sustainable and the
establishment of minimum requirements for economic Storage-ICBM. To achieve this,
a methodology is developed that can be applied to evaluate uncertainty associated with
the economics of CO2 storage in coal seams. The methodology is demonstrated through
application to the Spring Gully CBM field described in Chapter 3. The method involves
stochastic treatment of key uncertain variables integrated into reservoir simulation and
economic analyses. The effect of permeability, CO2 Langmuir volume, and the CO2
price and the gas price on Storage-ICBM economics is investigated in detail. The Monte
Carlo approach enables the assignment of confidence levels to specific outcomes such
as the NPV of Storage-ICBM, the quantity of CO2 injected, incremental CBM recovery,
and the specific cost of CO2 avoided. Thus, risk becomes quantifiable. Minimum
requirements for economically sustainable Storage-ICBM are established with respect
to reservoir permeability, gas content, and CO2 Langmuir volume as a function of CO2
and gas prices.
208
7.2 METHODOLOGY
SIMEDWin has a Monte Carlo simulation functionality which allows the description of
some reservoir parameters by probability distributions. These are Langmuir volume and
pressure, gas content or saturation level, reservoir permeability, as well as geo-
mechanical properties of the coal. However, in this analysis only gas content,
permeability, and CO2 Langmuir volume are associated with uncertainty. This is to limit
the number of realisations required. Because Monte Carlo simulation uses a statistical
representation of parameters, the more parameters are varied, the more realisations are
necessary to obtain a statistically representative conclusion on the effect of model inputs
on model outputs. Since both primary and enhanced recovery scenarios have to be
modelled, the computational effort is high and a very large number of simulations
would not be practical with respect to time. Alternatively, the number of grid blocks
could be limited, but that would considerably affect the accuracy of the simulation.
Thus, based on the sensitivity analysis in Chapter 5 and the results presented in Chapter
6, to reduce the number of realisations required, six parameters are changed as part of
the Monte Carlo simulation performed in this chapter. These are the reservoir properties
permeability, gas content, and the CO2 isotherm, represented by the CO2 Langmuir
volume, and the economic parameters CO2 price, gas price, and CO2 compression costs.
In the Monte Carlo analysis, random samples of the three uncertain reservoir properties
are generated and then used with the reservoir simulator to generate realisations of the
primary and the enhanced drainage process. As the economics of Storage-ICBM are the
difference between the economics of ECBM and CBM (as defined in Chapter 4),
SIMEDWin was modified to sample the same sequence for both recovery scenarios.
This means that the same combination of reservoir property values for the primary and
the enhanced case was used to enable evaluation of the effect of CO2 injection. For both
the CBM and the ECBM scenario 500 simulation runs were performed (total number of
simulations: 1,000) and each simulation output represents one realisation. The
realisations of gas recovery and CO2 injection rates are inputs for the economic model
that was described in Chapter 4. Within the economic model the key properties CO2
price, gas price, and CO2 compression costs are represented through probability
distributions. Analogous to Chapter 6, the injection of CO2 is considered a revenue
stream, not a cost. All other economic assumptions are those as described in Chapter 4.
209
Combining the simulation realisations with the uncertainty in reservoir parameters,
realisations for the NPV of Storage-ICBM are generated.
To establish probability distributions for permeability, gas content, and the CO2
Langmuir isotherm representative of Spring Gully coals, reservoir data was compiled
from publically available well reports, journal articles, and research reports. The
economic parameters treated as uncertain were the CO2 price, the electricity price, and
CO2 compression costs. Their respective probability distributions were derived using
data from the European ETS [EXAA, 2012] and the Australian Market Operator
[AEMO, 2012].
7.2.1 RESERVOIR MODEL
The reservoir model is the same as presented in Chapter 3, except for permeability, gas
content, and the CO2 Langmuir volume which are randomly sampled for this analysis
from their respective probability distributions. The reservoir model uses the 500 x 500
m2 vertical well spacing that was demonstrated to be profitable over a wide range of
reservoir properties and gas and CO2 prices (see Chapter 6) and is also the spacing
originally employed at Spring Gully [Edgar, 2005].
7.2.2 OPERATIONAL DESIGN
In the approach used here, the operational design such as well spacing and injection
pressure are not altered during Monte Carlo simulation. Injection commences after 5
years of primary recovery and the bottomhole pressure is increased from 2,000 kPa up
to 13,000 kPa within the first year of injection. The production well is controlled by a
bottomhole pressure of 200 kPa after initial pressure drawdown through water
production.
210
7.3 INPUT DISTRIBUTIONS
7.3.1 RESERVOIR PROPERTIES
The probability distributions for the reservoir properties permeability, gas content, and
CO2 Langmuir volume were derived using data from a coal properties database. The
database was constructed using properties published in publically available literature. It
contains properties measured and estimated for coal reservoirs worldwide, including
China, USA, and Australia. When possible, the probability distributions were derived
using coal properties from the Bowen Basin, Queensland. However, to establish a
distribution for the CO2 Langmuir volume, data from basins around the world had to be
used, as insufficient Bowen Basin or Australian data was available to construct a
meaningful distribution.
Correlations have been observed between some reservoir properties. For example,
permeability tends to decrease with depth due to the increasing overburden pressure.
Similarly, the coal gas content typically rises with depth as the higher reservoir
pressures and temperatures result in a greater sportive capacity. However, no general
correlation between gas content and permeability can be established as the local
variability in permeability is often so great that it is difficult to capture trends, even
within the same basin.
A relationship exists between the adsorptive capacity of the coal towards CH4 and CO2.
Laboratory experiments show that medium to high rank coals can generally adsorb
approximately twice as much CO2 as CH4 by volume [Puri and Yee, 1990]. Faiz et al.
[2007] found that for lower rank sub-bituminous and brown coals the CO2:CH4 ratio can
even exceed a ratio of 10:1. However, this is the result of lower rank coals exhibiting
lower CH4 sorption capacities and does not imply that the volumetric storage capacity
for CO2 increases. This indicates that while the CH4 sorptive capacity is affected by
rank, the CO2 sorptive capacity is not [Reeves et al., 2005].
Without detailed reservoir specific knowledge it is impossible to establish representative

correlations between reservoir parameters. Thus, in the subsequent analysis the reservoir
properties are treated as being independent.
211
Permeability
Permeability is a reservoir property that varies more than any other parameter as a result
of the heterogenic nature of the fracture system of coal [Zuber, 1996]. Within the same
basin it can vary by several orders of magnitude. While it changes as a function of
effective stress and thus generally decreases with depth, the local variability in
permeability is so great that it is difficult to capture trends, particularly when the
analysed data extends over different regions within the same basin. This is indicated in
Figure 7.1 which presents permeability measurements from different regions as a
function of burial depth. The data was compiled using Bowen and Sydney Basin well
reports obtained through the databases provided by the Queensland Department of
Employment, Economic Development and Innovation [QLD DEEDI, 2010] (database:
QDEX) and the New South Wales Department of Primary Industries [NSW DPI, 2010I]
(database: DIGS) and other publications [Enever et al., 1995; Esterle et al., 2006].
While for two Bowen Basin data sets permeability appears to decrease with increasing
depth, for the Northern Bowen Basin no particular trend could be identified. For the
Sydney Basin permeability appears to rise with increasing depth. Thus, it is concluded
that while effective stress affects permeability locally, the effects are negligible in
comparison to the great variability in initial permeability within the seam, the reservoir,
and the basin. Based on this, for the Monte Carlo simulation study, permeability is not
assumed to be a function of depth.
Sydney Basin Bow en Basin Northern Bow en Basin Bow en Basin
1,000
Log Permeability, mD
100
10
0
0 200 400 600 800 1,000 1,200
Depth, m
Figure 7.1: Measurements of permeability with respect to depth for different Australian coal
regions / basins [Enever et al., 1995; Esterle et al., 2006; QLD DEEPI, 2010; NSW DPI, 2010].
212
As no specific data is available for the Spring Gully prospect, data collected throughout
the Bowen Basin is used to establish a distribution of coal permeability. The data ranges
from permeabilities as low as 0.001 mD to as high as 400 mD. The different
permeability classes and the corresponding probabilities are presented in Figure 7.2.
0.30
0.25
Probability
0.20
0.15
0.10
0.05
0.00
Permeability classes, mD
Figure 7.2: Classes of permeability within the Bowen Basin and their corresponding probabilities.
Based on the available data, the distribution of permeability in the Bowen Basin is best
described by a lognormal distribution with a mean of 0.98 and a standard deviation of
3.68 (corresponding to a mean of 2,366 mD and a standard deviation of 2,099,365 mD
in normal space), which is presented in Figure 7.3. The input distribution is truncated at
a minimum permeability of 0.001 mD and a maximum permeability of 1,000 mD which
means no samples outside this range will be generated.
213
Log Permeability k, mD
Frequency / Probability Density Function 0.001 0.01 0.1 1 10 100 1000

12
10 Actual
Lognormal
8
0
9
9
9
9
99
.9
.9
09
.9
9.
.0
-9
99
-0
.0
-0
-9
-0
-9
1
1
01
0.
10
0
1
00
0.
10
0.
Permeability k, mD
Figure 7.3: Histogram and probability density function for Bowen Basin permeability. The best fit
for the data is a lognormal distribution with m = 2,366 mD and s = 2,099,365 mD (in normal space).
Gas content
Gas content is known to be a function of depth, i.e. gas content generally exhibits an
increase with increasing burial depth. This is a result of the rise in the coal’s sorption
capacity with increasing reservoir pressure as discussed in section 2.2.2. Figure 7.4
presents gas content as a function of depth for four Australian coal regions compiled
using data published by Enever et al. [1996], Esterle et al. [2006], Saghafi et al. [2008],
and well reports obtained from the NSW DPI [2010] and the QLD DEEDI [2010]. The
Bowen Basin data is used to establish the distribution of the gas content for the Spring
Gully field. However, the data in Figure 7.4 only presents gas contents up to a depth of
500 m, whereas the average depth at Spring Gully is quoted as 800 m. This implies that
a distribution generated from the Bowen Basin data sets presented in Figure 7.4 would
be a significant underestimate of the actual gas content. Thus, the depth – gas content
relationship is used to extrapolate the data to deeper reservoirs. This can be done by
converting the gas content to seam saturation. The process is described below.
214
Bow en Basin Northern Bow en Basin Surat Basin Hunter Valley
18
Gas content, m /t 16
14
3
12
10
8
6
4
2
0
0 100 200 300 400 500 600
Depth, m
Figure 7.4: Gas content as a function of depth for four Australian coal regions [Enever et al., 1996;
Esterle et al., 2006; Saghafi et al., 2008; NSW DPI, 2010; QLD DEEDI, 2010].
Seam saturation is expected to be independent of depth, but in combination with

reservoir pressure and isotherm data can be used to calculate the initial gas content. This
is demonstrated by Eq. (7.1). Here, to use Eq. (7.1) it is assumed that reservoir pressure
is a function of depth, i.e. reservoir pressure is equal to hydrostatic pressure. For
example, at a depth of 200 m the reservoir pressure would be approximately 2,000 kPa.
Eq. (7.1) implies that the gas content will increase with rising reservoir pressure (that is,
depth).
VL ⋅ PRe s
Gc ,init = ⋅ SG
PL + PRe s (7.1)
Gc,init is the initial gas content, VL is the Langmuir volume, PL is the Langmuir pressure,
PRes is the reservoir pressure, and SG is the gas saturation.
Eq. (7.1) shows that to determine the initial gas content, isotherm data is necessary.
Thus, probability distributions for both CH4 Langmuir volume and pressure have to be
established as well. These are also derived from Bowen Basin data [Laxminarayana and
Crosdale, 1999; QLD DEEDI, 2010]. Langmuir volume and pressure are best described
by a normal distribution with a mean of 31.88 m3/t and a standard deviation of 9.38 m3/t
and a lognormal distribution with a mean of 7.42 and a standard deviation of 0.17
(corresponding to m = 1,695 kPa and s = 286 kPa in normal space) respectively. The
distributions are presented in Figure 7.5 and Figure 7.6.
215
3
CH4 Langmuir Volume, m /t
Frequency / Probability Density Function

12 16 20 24 28 32 36 40 44 48
0.12
0.1 Actual
Normal
0.08
0.06
0.04
0.02
0
- .99
- .99
- 99
- 99
- .99
- .99
- .99
- .99
- 99
- 99
- .99
- .99
- 99
- .99
- .99
- 99
- 4 99
99
18 17 .
20 19 .
30 29 .
32 31 .
38 37 .
44 43 .
46 45 .
7.
14 13
16 15
22 21
24 23
26 25
28 27
34 33
36 35
40 39
42 41
-
12
3
CH4 Langmuir Volume, m /t
Figure 7.5: Histogram and probability density function representative of Bowen Basin CH4
Langmuir volume. The best fit for the data is a normal distribution of m = 31.88 m3/t and s = 9.38
m3/t (in normal space).
CH4 Langmuir Pressure, kPa

1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600

0.0025
Actual
0.002
Lognormal
0.0015
0.001
0.0005
0
12 - 1 9
13 - 1 9
14 - 1 9
15 - 1 9
16 - 1 9
17 - 1 9
9
9
20 - 1 9
21 - 2 9
22 - 2 9
23 - 2 9
24 - 2 9
25 - 2 9
-2 9
9
00 09
00 19
00 29
00 39
00 49
00 59
00 69
00 79
00 89
00 99
00 09
00 19
00 29
00 39
00 49
59
11 - 1
18 - 1
19 - 1
00
10
CH4 Langmuir Pressure, kPa

Figure 7.6: Histogram and probability density function representative of Bowen Basin CH4
Langmuir pressure. The best fit for the data is a lognormal distribution of m = 1,695 kPa and s =
286 kPa.
216
To generate a distribution for seam saturation, the probability distributions for CH4
Langmuir volume and pressure were randomly sampled. These random samples are
used to calculate the gas content at saturation for each data point presented in Figure 7.4
applying Eq. (7.1). To use Eq. (7.1) depth is converted to reservoir pressure by
assuming hydrostatic equilibrium. Having determined the theoretically maximum gas
content at reservoir pressure, for the same isotherm the degree of saturation can be
determined using the corresponding data point from Figure 7.4 and inserting in Eq. (7.2)
below. The results can then be compiled to construct a probability distribution for gas
saturation.
Gc ,init Gc ,init
SG = =
 VL ⋅ PHydrostat  Gc , sat
 
P +P 
 L Hydrostat  (7.2)
Gc,sat is the gas content of the fully saturated coal seams and PHydrostat is the hydrostatic
pressure (assumed to represent reservoir pressure).
Figure 7.7 illustrates the procedure. All sample results that exceed a gas saturation of
100% are rejected. The resulting distribution is presented in Figure 7.8. It is assumed
that the data is normally distributed with a mean of 43.49% and a standard deviation of
26.70%.
STEP 1
PL,x
PL,CH4
+ Condition:
VL,x Eq. (6) SG,x ≤ 1 SG,x
TRUE
SG
VL,CH4
+ FALSE
Gc,init = f(D)
{PRes = f(D)}
Figure 7.7: Flow diagram describing the generation of the gas saturation probability distribution.
217
Gas saturation, %
Frequency / Probability density function

0 10 20 30 40 50 60 70 80 90 100
0.045
0.04 Actual
0.035 Normal
0.03
0.025
0.02
0.015
0.01
0.005
0
10 - 9 9
15 - 14 99
20 - 19 .99
25 - 24 .99
30 - 29 .99
35 - 34 .99
40 - 39 .99
45 - 44 .99
50 - 49 .99
55 - 54 .99
60 - 59 .99
65 - 64 .99
70 - 69 .99
75 - 74 .99
80 - 79 .99
85 - 84 .99
90 - 89 .99
95 - 94 .99
- 9 .99
99
5 4.9
9.
.
-
0
Gas saturation, %
Figure 7.8: Histogram and probability density function for gas saturation. The best fit for the data
is a normal distribution with m = 43.49% and s = 26.70%.
To generate the distribution for gas content, the probability distributions for CH4
Langmuir volume and pressure and seam saturation were randomly sampled and used in
Eq. (7.1) to calculate the corresponding gas content. Because seam saturation is
described by a normal distribution, negative saturation samples are possible. However,
these are rejected so that no negative gas content samples are obtained. The gas content
is calculated at different depths. The average depth at Spring Gully was estimated as
800 m with the depth ranging from approximately 500 m to 1,100 m. This is
incorporated in the distribution by repeating the process illustrated in Figure 7.9 for the
depths 500 m, 800 m, and 1,100 m (represented by hydrostatic reservoir pressures of
5,000 kPa, 8,000 kPa, and 11,000 kPa respectively). For each depth, 100 gas content
samples are generated. The resulting distribution for gas content is therefore
representative of a depth range of 500 m to 1,100 m.
218
STEP 2
PL,x
PL,CH4
+ Condition:
VL,x Eq. (5) Gc,x > 0 Gc,x
TRUE
Gc
VL,CH4
+
SG,x FALSE
Repeat 100x for

PRes = 5,000, 8,000, 11,000 kPa.
SG
Figure 7.9: Flow diagram describing the generation of the probability distribution for gas content.
The input distribution for gas content used for the Monte Carlo simulation at Spring
Gully is normally distributed with a mean of 10.59 m3/t and a standard deviation of 5.55
m3/t (Figure 7.10). This is also in reasonable agreement with the in Chapter 3 assumed
average gas content of 12.75 m3/t. The lognormal distribution was not suitable as it
underestimates the probability of a low gas sample while it significantly overestimates
the probability of a fully saturated seam. The maximum gas content based on the CH4
Langmuir isotherm and the reservoir pressure is 18.75 m3/t. Similarly, the minimum gas
content is assumed to be 0.1 m3/t. Therefore, the input distribution is truncated at these
extreme values.
219
3
Gas content, m /t
Frequency / Probability Density Function 0 5 10 15 20 25 30 35

0.1
0.09
0.08 Actual
0.07 Normal
0.06
0.05
0.04
0.03
0.02
0.01
0
-2 9
4 99
6 99
8 99
-1 9
-1 9
-1 9
-1 9
9
- 2 99
-2 9
-2 9
-2 9
-2 9
-3 9
-3 9
- 3 99
99
.9
10 .9
12 0. 9
14 2. 9
16 4. 9
18 6. 9
22 0. 9
24 2. 9
26 4. 9
28 6. 9
30 8. 9
32 0. 9
.
20 18.
34 2.
4.
-0
-4
-6
-8
-
0
2
3
Gas content, m /t
Figure 7.10: Histogram and probability density function for gas content representative for a depth
range of 500 to 1,100 m. The best fit for the data is a normal distribution with m = 10.59 m3/t and s
= 5.55 m3/t.
CO2 isotherm
The CO2 isotherm in combination with reservoir pressure determines the maximum
theoretical CO2 storage capacity. The maximum theoretical storage capacity is the
maximum volume of gas the coal can adsorb at given reservoir conditions. Variability in
the isotherm is included in the Monte Carlo simulation to assess the economic risk
associated with the uncertainty in CO2 storage potential. Here, variations in the CO2
isotherm are achieved by sampling the CO2 Langmuir volume. Changes in Langmuir
volume have a significantly larger effect on the shape of the isotherm than changes in
Langmuir pressure. This was illustrated in Chapter 5, section 5.3.
In comparison to the large volume of data available for CH4 isotherms, CO2 isotherm
data is limited. Henceforth, the probability distribution for CO2 Langmuir volume is
constructed based on global data, spanning the Sydney Basin, Australia, the Huntly
coalfield, New Zealand, the San Juan Basin, USA, the Appalachian Basin, USA, the
Powder River Basin, USA, the Warrior Basin, USA, as well as coals from British
220
Columbia, Canada, and Hokkaido, Japan [Fujioka, 2006; Pratt et al., 1989; Reeves et
al., 2005; Ryan and Richardson, 2004; Wold et al., 2006; Zarrouk and Moore, 2009].
The best fit distribution for the available data is a lognormal distribution with a mean of
3.62 m3/t and a standard deviation of 0.38 m3/t (Figure 7.11, corresponding to a mean of
40.34 m3/t and a standard deviation of 15.91 m3/t in normal space). The input
distribution is truncated at VL,CO2 = 14.6 m3/t (probability of VL,CO2 being less than 14.6
m3/t lower than 0.65%) and VL,CO2 = 78.5 m3/t (probability of VL,CO2 being higher than
78.5 m3/t less than 2.6%) as these were the most extreme values found in the reviewed
data.
3
CO2 Langmuir Volume, m /t
10 20 30 40 50 60 70 80
0.035
Actual
0.03
Lognormal
0.025
0.02
0.015
0.01
0.005
0
-1 9
-2 9
-2 9
-3 9
-3 9
-4 9
-4 9
-5 9
-5 9
-6 9
-6 9
-7 9
-7 9
99
9
20 . 9
25 4. 9
30 9. 9
35 4. 9
40 9. 9
45 4. 9
50 9. 9
55 4. 9
60 9. 9
65 4. 9
70 9. 9
75 4. 9
4.
9.
9
-1
10
15
3
CO2 Langmuir Volume, m /t
Figure 7.11: Histogram and probability density function for CO2 Langmuir volume. The best fit for
the data is a lognormal distribution with m = 40.34 m3/t and s = 15.91 m3/t (normal space).
7.3.2 ECONOMIC PARAMETERS
The economic input parameters are CO2 price, gas price, and CO2 compression costs.
CO2 compressors were identified to be the cost factors that the economics of Storage-
ICBM are most sensitive to (see Chapter 5), while Chapter 6 highlighted that CO2 and
gas prices are likely to decide over the economic viability of a Storage-ICBM project.
221
All of these parameters are associated with a significant degree of uncertainty, but
particularly the price of CO2. This is because the Australian Government only recently
(July 2012) assigned a price to CO2 in form of a carbon tax.
Generally, a degree of correlation exists between the different economic input

parameters. For example, when prices are high, costs are also often observed to be high;
during periods of high gas prices the cost of well drilling or gas compression is also
very likely to rise. Similarly, increasing CO2 prices are expected to lead to higher
energy prices. This was observed in many European countries during the first phase of
the European ETS [Reinaud, 2007] as the generators passed on some or all of their costs
incurred by the ETS to consumers. Such correlations can be considered in the Monte
Carlo simulation by assigning correlation coefficients that reflect these relationships.
However, the relationships between different input parameters are rarely perfectly
correlated (i.e. when the value of one input increases, the other input either always
increases or always decreases in which case the correlation would be perfectly positive
or perfectly negative respectively), but can be very complex. Thus, no further
investigation is performed here as it is beyond the scope of this thesis. In this study the
input parameters are treated as being independent, though some degree of correlation is
likely to exist.
CO2 price
Analogous to Chapter 6, for the operator of CO2-ECBM the injection of CO2 is
considered to be a revenue stream, not a cost. This is discussed in detail in Chapter 6,
section 6.3.1. The probability distribution for the net CO2 price received by the operator
is based on the carbon credits of the European ETS [EEXA, 2012]. Prices are converted
from Euro (EUR) to Australian Dollar (A$) using a conversion rate of EUR0.6/A$. This
is the long term exchange rate. However, from 2009 onwards a continuous appreciation
of the Australian Dollar compared to the Euro could be observed as indicated in Figure
7.12 which shows the Australian dollar in comparison to the Euro and the US Dollar
(US$) [RBA, 2012]. Thus, an exchange rate of EUR0.75/A$ is also used which means
for each European carbon credit two Australian prices are generated. Ideally, the
exchange rates would be described by probability distributions as well. However, to
222
limit the number of uncertain parameters for the aforementioned reasons (section 7.2)
this is refrained from.
1.1
1.0
0.9
Australian Dollar
0.8
0.7
0.6
0.5
0.4
0.3 US$
0.2 EUR
0.1
0.0
Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan-
1999 2001 2003 2005 2007 2009 2011 2013
Figure 7.12: Historical exchange rates Australian Dollar to Euro (EUR) and US Dollar (US$) from
Jan 1999 (year of introduction of the Euro as a traded currency) to June 2012 [RBA, 2012].
To construct the probability distribution for the CO2 price, European ETS data for the
period July 2005 to August 2011 is used and converted applying the two exchange rates
described above. However, the European ETS experienced a period of extremely low
CO2 credits (lower than EUR1) in 2007. An extensive over-allocation of permits lead to
a collapse in the price of carbon, i.e. companies had more permits than they required for
compliance with the ETS. This is reflected in the distribution of the carbon credit
presented in Figure 7.13 which indicates that the distribution cannot be approximated by
either a normal, lognormal, triangle, or uniform distribution.
223
CO2 Credit, A$/t
Frequency / Probability Density Function 0 10 20 30 40 50

0.2
0.18
Actual
0.16
Normal
0.14
Lognormal
0.12
0.1
0.08
0.06
0.04
0.02
0
9
9
99
-2 9
24 . 99
28 . 99
32 . 99
-3 9
40 . 99
44 . 99
-4 9
52 . 99
99
.9
.9
.9
20 7. 9
36 3. 9
48 5. 9
3.
3.
-1
-5
-9
9
-1
-1
-2
-2
-3
-4
-4
-5
0
8
12
16
CO2 Credit, A$/t

Figure 7.13: Histogram and probability density function of carbon credits of the European ETS for
July 2005 till December 2010 converted to Australian dollars using an exchange rate of EUR0.6/A$
[EEXA, 2010].
To enable representation of the data by a mathematical model, 2007 data is removed

from the distribution. This assumes that the price crash during 2007 was a transitory
effect and not representative of the normal range of behaviour. The resulting
distribution without 2007 data is shown in Figure 7.14 which can be approximated by a
normal distribution with a mean of A$26.69/t and a standard deviation of A$10.56/t.
The normal distribution is truncated at A$0.03/t which is the minimum value of the data
reviewed (excluding 2007 data).
224
CO2 Price, A$/t
0 10 20 30 40 50
Frequency / Probability Density Function 0.07
Actual
0.06
Normal
0.05
0.04
0.03
0.02
0.01
0
9
99
20 . 99
24 . 99
28 . 99
32 . 99
36 . 99
40 . 99
44 . 99
48 . 99
99
.9
.9
.9
3.
9.
-1
-5
-9
5
-1
-1
-2
-2
-2
-3
-3
-4
-4
-4
0
8
12
16
CO2 Price, A$/t

Figure 7.14: Histogram and probability density function of Australian CO2 price data based on the
EU ETS (in nominal terms) exclusive of 2007 data [EEXA, 2010; RBA 2011].
Gas prices
The distribution for the gas price is derived based on Australian average monthly data
available from the Australian Energy Market Operator [AEMO, 2012] and US average
monthly data available from the US Energy Information Administration [EIA, 2012].
Including data from two different markets is an attempt to capture potential drastic
changes in gas prices. For example, US gas prices have been historically higher than in
Australia as demonstrated in Figure 7.15. However, during the Global Financial Crisis
(GFC) the US gas price dropped from more than US$10/GJ to about US$4/GJ until it
stabilised at approximately US$5/GJ. At the end of 2011 the price fell further, reaching
a minimum early 2012 at below US$2/GJ. It has since recovered to more than US$3/GJ
in early 2013.
Australian gas prices, on the other hand, are expected to increase noticeably in the near
future as a result of large-scale liquefied natural gas (LNG) projects in Queensland
which enable the export of coalbed methane gas overseas. These projects are scheduled
to come online in 2014/2015. Long term prices of A$7/GJ are estimated, which is
225
double the current spot price (Chambers, The Australian, 2011). The spot price is the
price for gas delivered to a zonal hub, thus it is inclusive of (some) transmission costs.
In Asia, the spot price of LNG was approximately US$16/GJ at the end of 2012.
12
AU gas price
Gas price, A$/GJ / U$/GJ
10
US gas price
0
Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan-
04 05 06 07 08 09 10 11 12
Figure 7.15: Nominal historic Australian and US gas prices since 2004 [AEMO, 2012; EIA, 2012].
Based on future oil prices, domestic economic development, and the Australian
emissions target the Gas Market Review published by the Queensland DEEDI (2011)
predicts three future (2010 - 2030) gas price scenarios which are presented in Figure
7.16. In the high scenario the gas prices rise to more than A$8/GJ by 2015, whereas the
medium scenario estimates prices of more than A$5/GJ, and for the low scenario a gas
price around A$5/GJ is forecasted.
226
9
7
Price, A$/GJ-
4 Low
Medium
3
High
2
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Year
Figure 7.16: New contracted gas prices, Queensland aggregate, 2010-2030, in 2011 real terms
(modified from QLD DEEDI [2011]).
To capture future conditions and potential changes in prices, data from both the
Australian and the US gas market are used to construct the probability distribution for
gas prices. As shown in Figure 7.12, the US$/A$ exchange rate has exhibited significant
fluctuations over the last decade. To account for this, two different exchange rates are
used to convert US prices to Australian prices - US$0.75/A$ and US$1/A$. Therefore,
the ratio of US data to Australian data is 2:1, meaning the higher US prices have a larger
weighting in an attempt to simulate the higher price forecasts for the Australian market.
The resulting gas price distribution is presented in Figure 7.17. It is best described by a
normal distribution with a mean of A$5.57/GJ and a standard deviation of A$2.86/GJ
and is truncated at a minimum gas price of A$2/GJ (probability of the gas price being
less than A$2/GJ is 10.6%).
227
Gas price, A$/GJ
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
0.18
0.16
Actual
0.14
Normal
0.12
0.10
0.08
0.06
0.04
0.02
0.00
9
9
9
9
9
9
9
9
9
9
-1 9
-1 9
-1 9
-1 9
99
.9
.9
.9
.9
.9
.9
.9
.9
.9
.9
11 . 9
12 1. 9
13 2. 9
14 3. 9
4.
-0
-1
-2
-3
-4
-5
-6
-7
-8
-9
0
-1
0
1
2
3
4
5
6
7
8
9
10
Gas price, A$/GJ

Figure 7.17: Histogram and probability density function of gas prices. The data is best fitted by a
normal distribution with m = A$5.57/GJ and s = A$2.86/GJ.
CO2 compression
As indicated in Chapter 4 and 5, CO2 compression costs make up a significant share of
the overall costs of Storage-ICBM. The extent to which compression adds to the
economics of storage depends predominately on two factors; 1) the compression work
required to achieve injection pressure; and 2) the price of fuel to power the compressor.
In this analysis CO2 injection is set to occur at a bottomhole pressure of 13,000 kPa.
Thus, compression to this pressure is performed. However, the weight of the CO2 within
the wellbore can significantly contribute to the bottomhole pressure as the bottomhole
pressure is the sum of the injection pressure and the hydrostatic pressure from the CO2
column in the wellbore (the so called holdup pressure). Assuming compression to
bottomhole pressure underestimates the contribution of the holdup pressure and
overestimates the injection pressure. For example, in their paper introducing a model to
calculate non-isothermal flow of CO2 in injection wellbores, Lu and Connell [2008]
determined a holdup pressure of 7.3 MPa contributing to a bottomhole pressure of 13.8
228
MPa. This means a CO2 injection pressure of only 6.5 MPa was required -
corresponding to 47% of the bottomhole pressure.
However, prediction of the pressure contribution from the CO2 in the wellbore is very
complex requiring some unique processes not considered by existing approaches
including those specifically designed for CO2 flow [Lu and Connell, 2008]. Thus, in this
chapter the CO2 injection pressure is treated as uncertain. Based on the example
provided by Lu and Connell a range of 40% - 100% of the bottomhole pressure (13,000
kPa) is used to represent the injection pressure which is uniformly distributed as
indicated in Figure 7.18. A variation of the injection pressure affects the compression
work needed which in turn affects the size of the compressor and thus the capital and
the operating costs. This is the method used to simulate compression cost variations.
Furthermore, the compression operating costs are also affected by the above described
variability in gas prices.
0.018
Probability Density Function
0.016
0.014
0.012
0.01
0.008
0.006
0.004
0.002
0
0 20 40 60 80 100 120
% of BHP
Figure 7.18: The probability density function of the uniform distribution used to describe
variations in the CO2 injection rate as a percentage of bottomhole pressure (BHP) to represent
variations in compression costs.
229
7.4 MONTE CARLO RESULTS
7.4.1 ANALYSIS OF INPUT AND OUTPUT DISTRIBUTIONS
The previous section described the derivation of the distributions used for the Monte
Carlo simulation. The number of realisations and thus the number of random samples
generated for each parameter is specified as 500. However, with respect to reservoir
properties, not all of the 500 combinations resulted in successful realisations; that is
simulations could be terminated prematurely due to a computational error or because of
very long run times (more than 3 days). These unsuccessful realisations could have been
caused by a range of effects, for example operating conditions that are not appropriate
for a specific combination of reservoir properties. 283 out of the 500 attempted
realisations were successful. To understand the reasons for the very large number of
simulations that were rejected and to assess if the new input distributions are still
representative, the distribution of the input parameter values is compared to the
distribution of the parameter values that led to successful realisation. For this analysis,
the parameter values that returned successful realisations are referred to as output
parameters xout, while the input parameters are xin.
With respect to permeability it is indicated in Figure 7.19 that the probability

distribution of the output permeability (kout) appears to exhibit a higher frequency of
low permeability values than the input distribution for permeability (kin). This implies
that larger permeability values had a higher chance of leading to failed simulation runs.
However, comparing the average permeability from the input and the output
distributions highlights that the average permeability has increased from 61.50 mD for
kin to 99.86 mD for kout (see Table 7.1). While the output data distribution has a larger
fraction of samples in the permeability range of 0.001 to 0.005 mD, it also has more
samples between 10 and 1,000 mD, but fewer permeability samples in the range of
0.005 to 10 mD. Thus, the average permeability increased for kout.
230
12
Probability Density Function 10

k in
8
k out
0
0.0001 0.01 1 100
Log Permeability k, mD
Figure 7.19: Comparison of input and output distribution for permeability. The average
permeability increased from 61.50 mD to 101.73 mD.
Table 7.1: Comparison of minimum, maximum, and average property values for the input and the
output distributions for permeability, gas content, and CO2 Langmuir volume.
IN OUT
Parameter
MIN MAX AVERAGE MIN MAX AVERAGE
k, mD 0.0013 998.91 61.50 0.0013 998.91 99.86
Gc, m3/t 0.80 18.62 10.15 1.65 18.62 11.18
VLCO2, m3/t 14.81 77.30 38.75 14.81 77.30 38.13
For the seam gas content the output distribution Gcout exhibits a higher proportion of
property values between 8 and 12 m3/t compared to the input distribution Gcin. This is
demonstrated in Figure 7.20. The input distribution shows a more even spread of gas
content values. This indicates that smaller gas content values were more likely to result
in failed simulation runs, thus increasing the average gas content from 10.15 for Gcin to
11.18 m3/t (see Table 7.1) for Gcout. The minimum sampled gas content of the input
distribution was 0.8 m3/t and for the output distribution it is 1.65 m3/t, implying that gas
content samples below 1.65 m3/t resulted in failed simulation runs. The maximum gas
content was the same for both distributions at 18.62 m3/t (cut-off defined for the input
distribution was 18.75 m3/t – representing a 100% saturated seam).
231
0.12

gc in
0.1 gc out
0.08
0.06
0.04
0.02
0
0 2 4 6 8 10 12 14 16 18 20
Gas content, m3/t
Figure 7.20: Comparison of input and output distribution for gas content. The average gas content
increased from 10.15 m3/t to 11.18 m3/t.
Comparing the input and the output distribution describing the CO2 Langmuir volume
in Figure 7.21 strongly indicates that this property did not affect the success of a
simulation. Minimum and maximum sample values are the same for both distributions
and the average CO2 Langmuir volume only decreased by 0.62 m3/t from 38.75 m3/t for
VLCO2in to 38.13 m3/t for VLCO2out. This is summarised in Table 7.1. The change in
average Langmuir volume is expected to be a result of the failed simulation runs caused
by the reservoir properties permeability and / or gas content.
0.045
0.04
0.035
VLCO2 in
0.03 VLCO2 out
0.025
0.02
0.015
0.01
0.005
0
0 10 20 30 40 50 60 70 80 90 100 110
VL,CO2, m3/t
Figure 7.21: Comparison of input and output distribution for the CO2 Langmuir volume. The
average CO2 Langmuir volume stayed approximately the same.
232
The analysis highlighted the differences and similarities in the input and output
distributions for the three reservoir properties permeability, gas content, and CO2
Langmuir volume. These are to be taken into consideration when interpreting the
subsequent results.
7.4.2 DISTRIBUTION OF THE NPV OF STORAGE-ICBM
A table listing each realisation of the NPV of Storage-ICBM and the corresponding
input parameters (permeability, gas content, CO2 Langmuir volume, CO2 price, gas
price, and compression factor) is presented in the Appendix organised in order of
ascending permeability. The subsequent findings and analyses presented are based on
the results in this table.
The distribution of the NPV of Storage-ICBM is presented in Figure 7.22 which

highlights that most project NPVs are in the range of A$M-499 to A$M0/100 km2. This
is the most likely range of the NPV. The lowest NPV recorded was A$M-1,775/100
km2 and the highest A$M1,400/100 km2. The cumulative probability is presented in
Figure 7.23. The average NPV of the distribution is A$M-55/100 km2. The distribution
has a 90% probability (P90) that the NPV is above A$M-824/100 km2, a 50%
probability (P50) that the NPV is greater than A$M-77/100 km2, and a 10% probability
(P10) that it is more than A$M518/100 km2. The probability that the NPV of Storage-
ICBM is positive is approximately 43%.
233
0.0009
0.0008
0.0007
0.0006
Frequency
0.0005
0.0004
0.0003
0.0002
0.0001
0
-0
0
-- 0
0
0
-4 0
01 00
50 50
99 200
50
- 9 10 0
50
50
0
99
-1
--
-1 - -1
-1
-
--
1
99
1
9
9
49
49
10
-2
-1
2
NPV Storage-ICBM, A$M/100 km
Figure 7.22: Distribution of the NPV of Storage-ICBM.
0.0
P10
0.1
Cumulative probability
0.2
0.3
0.4
0.5 P50
0.6
0.7
0.8
P90
0.9
1.0
-2,000 -1,000 0 1,000 2,000
NPV Storage-ICBM, A$M/100 km2
Figure 7.23: Cumulative probability of the NPV of Storage-ICBM showing P10, P50, and P90
confidence levels.
Because of the shape of the curve of the cumulative distribution of the NPV it was not
possible to fit a function describing the distribution of the NPV of Storage-ICBM
mathematically. This is a result of the comparatively small number of samples used
(283 samples).
234
7.4.3 SENSITIVITY TO INPUT PARAMETERS
The sensitivity of the NPV of Storage-ICBM to the individual input parameters is

quantified using the Spearman rank correlation coefficient. The Spearman coefficient is
a non-parametric measure of the statistical dependence of two variables. It assesses how
well the relationship between two variables can be described using a monotonic
function. This means the input and the output variable can be perfectly correlated even
if the relationship is not linear. This is the difference between the commonly used
Pearson correlation coefficient which measures the linear dependence between two
variables. The Spearman correlation coefficient has been used by several researches in
the statistical analysis of production data [Campozana et al., 1999; Soeriawinata and
Kelkar, 1999; Roadifer et al., 2003]. The Spearman correlation coefficient can be
determined using Eq. (7.3) in which x is the rank of the input variable and y is the
corresponding rank of the output variable.
ρ ( X ,Y ) = ∑ ( x − x )( y − y ) (7.3)
∑(x − x ) ∑( y − y )
2 2
The sensitivity of the NPV of Storage-ICBM to the reservoir properties permeability,

gas content, and CO2 Langmuir volume and to the economic parameters CO2 price, gas
price, and CO2 compression factor expressed by the Spearman coefficient is presented
in Figure 7.24. Figure 7.24 shows that out of all tested parameters permeability has the
largest effect on the economics of Storage-ICBM, followed by the CO2 Langmuir
volume, and the CO2 compression factor. The NPV of Storage-ICBM is least sensitive
to the gas price.
235
Permeability
CO2 Langmuir volume
CO2 compression factor
CO2 price
Gas content
Gas price
-0.7 -0.6 -0.5 -0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4
Sensitivity to input parameters

Figure 7.24: Sensitivity of the NPV of Storage-ICBM to the different input parameters.
The effect of permeability on the NPV of Storage-ICBM is very strong with a Spearman
coefficient of -0.54. A Spearman coefficient of 1 implies that the higher the value of the
input parameter, the larger will be the value of the output parameter. Similarly, a
Spearman coefficient of -1 means that increasingly lower values of the input parameter
result in increasingly higher values of the output parameter. Thus, the negative value
relating permeability and NPV indicates that the NPV has a tendency to increase with
decreasing permeability. This is contrary to the common expectation that project
economics increase with increasing permeability. However, it was already demonstrated
in the previous chapter (Chapter 6) that higher permeabilities can be less beneficial with
respect to Storage-ICBM economics than lower permeabilities due to the higher initial
reserves already recovered in primary recovery and the early CO2 breakthrough at the
producer. The effect of permeability on Storage-ICBM economics will be investigated
in more detail in section 7.4.4.
The Spearman coefficient describing the sensitivity of the NPV of Storage-ICBM to the
CO2 Langmuir volume is positive at 0.34. This means when the Langmuir volume
increases, the NPV has a tendency to do so as well. An increase in CO2 Langmuir
volume corresponds to an increase in the maximum theoretical CO2 storage capacity
and thus to higher CO2 related revenues. However, the storage capacity is also affected
236
by reservoir permeability which can significantly limit the quantities injected into the
coal seams.
The NPV of Storage-ICBM has a tendency to increase when the costs of CO2
compression decrease and a low tendency to increase with rising gas content.
Interestingly, the Spearman coefficient describing the sensitivity of the NPV of Storage-
ICBM to the gas price and the CO2 price is negative, though the very low values (lower
than -0.1) indicate that these parameters only weakly affect the NPV of Storage-ICBM.
The negative values imply that the NPV is more likely to decrease than to increase
when the CO2 price or the gas price increases. This is unexpected and therefore will be
examined further in section 7.4.8.
7.4.4 EFFECT OF RESERVOIR PROPERTIES ON THE NPV OF

STORAGE-ICBM
Permeability
The NPV of Storage-ICBM as a function of permeability is presented in Figure 7.25. It
illustrates that for permeabilities below 0.1 mD CO2 storage is not economically viable.
The minimum permeability yielding a positive NPV was determined as 0.29 mD for this
sample distribution. With increasing permeability Storage-ICBM becomes increasingly
more economic and for a permeability range of 1 to 100 mD three quarters (76%) of
Storage-ICBM realisations are profitable. Above a permeability of 100 mD Storage-
ICBM becomes increasingly less economic again and only one quarter (23%) of
realisations have positive NPVs. This indicates that the ideal permeability with respect
to Storage-ICBM ranges from 1 mD to 100 mD. Below 0.1 mD the permeability is so
low that CO2 injection is significantly impacted and the cumulative quantities injected
over the project life are negligible. This is demonstrated in Figure 7.26 which shows the
annual and the cumulative CO2 injected as a function of reservoir permeability.
237
1,500
2
NPV Storage-ICBM, A$M/100 km 1,000
500
0
0.001 0.01 0.1 1 10 100 1000
-500
-1,000
-1,500
-2,000
Figure 7.25: NPV of Storage-ICBM as a function of reservoir permeability.
140
Average annual CO2 injected, Mt/y
120
Cumulative CO2 injected, Mt
100
CO2 injected
80
60
40
20
0
0.001 0.01 0.1 1 10 100 1000
Figure 7.26: Annual (blue) and cumulative (green) CO2 injected as a function of permeability.
238
To further highlight the observations from Figure 7.25 the cumulative probability of the
NPV of Storage-ICBM for six different permeability classes is presented in Figure 7.27.
The permeability classes are:
k = 0.001 - 0.01 mD
k = 0.01 - 0.1 mD
k = 0. 1 - 1 mD
k = 1 - 10 mD
k = 10 - 100 mD
k = 100 - 1,000 mD
Because the total sample size of 283 is divided into six different permeability classes,
the sample number in a class can be small. Thus, the probability distributions in Figure
7.27 are coarse. Despite the coarseness, Figure 7.27 clearly confirms two things;
Storage-ICBM is not viable for reservoir permeabilities below 0.1 mD (no positive
NPVs were recorded) and it has the highest chance of economic success for
permeabilities between 1 and 100 mD (70% for permeabilities between 1 mD and 10
mD and 78% for permeabilities between 10 mD and 100 mD). For permeabilities above
100 mD the likelihood of a positive NPV is only 23%, which is similar to that of the
permeability class of 0.1 to 1 mD (17%). However, the spread of the distribution is
significantly larger for the permeability class 100 to 1,000 mD and ranges from
A$-1,775/100 km2 up to A$M1,084/100 km2. In comparison, for the permeability class
of 0.1 to 1 mD the distribution of NPVs is relatively narrow ranging from A$-242/100
km2 to A$M330/100 km2. The high frequency of negative NPVs for the high
permeability scenarios (above 100 mD) does not mean that primary recovery is not
economic; it implies that primary recovery is more economic than enhanced recovery
and thus the injection of CO2 would not add financial value.
239
1.0
k = 0.001 - 0.01
0.9 k = 0.01 - 0.1
0.8 k = 0.1 - 1
k = 1 - 10
0.7 k = 10 - 100
k = 100 - 1000
0.6
0.5
0.4
0.3
0.2
0.1
0.0
0
0
00
0
0
00
50
50
0
-5
,0
,5
,0
1,
1,
-2
-1
-1
2
NPV Storage-ICBM, A$M /100 km
Figure 7.27: Cumulative probability of the NPV of Storage-ICBM for the six different permeability
classes.
CO2 Langmuir volume

In section 7.4.3 it was established that the CO2 Langmuir volume has the second largest
effect on Storage-ICBM economics as it determines the maximum theoretical storage
capacity of the coal. However, its impact is less pronounced than that of permeability.
The NPV of Storage-ICBM as a function of CO2 Langmuir volume is presented in
Figure 7.28. The plot indicates that a trend exists for which realisations with a Langmuir
volume of greater 35 m3/t have a 20% higher probability of yielding positive project
economics than realisations with CO2 Langmuir volumes below 35 m3/t (53% positive
NPVs compared to 33% positive NPVs).
240
2,000
2
1,500
1,000
500
0
0 10 20 30 40 50 60 70 80
-500
-1,000
-1,500
-2,000
3
CO2 Langmuir volume, m /t
Figure 7.28: The NPV of Storage-ICBM as a function of CO2 Langmuir volume. The plot indicates
that the probability of a positive NPV is higher for realisations with CO2 Langmuir volumes above
35 m3/t.
The practical CO2 storage capacity is largely determined by the seam permeability and
thus permeability can override the maximum theoretical storage capacity which is
defined by the CO2 isotherm and the reservoir pressure. This is indicated in Figure 7.29
in which two trends can be observed: 1) the cumulative CO2 injected increases with
increasing CO2 Langmuir volume; 2) the cumulative CO2 injected is insensitive to
increases in CO2 Langmuir volume. For the cases for which the cumulative CO2
injected is insensitive to the CO2 Langmuir volume, it is most likely that injection was
limited by reservoir permeability and thus the theoretical storage capacity was not
relevant. Therefore, the NPV of Storage-ICBM is more sensitive to the reservoir
permeability than to the CO2 Langmuir volume (see Figure 7.24).
241
140
Cumulative CO 2 injected, Mt
120
100
80
60
40
20
0
0 20 40 60 80
3
CO2 Langmuir volume, m /t
Figure 7.29: Cumulative CO2 injected as a function of CO2 Langmuir volume.
7.4.5 SENSITIVITY TO THE CO2 INJECTED
The NPV of Storage-ICBM as a function of the cumulative CO2 injected is presented in

Figure 7.30. It highlights that the NPV of Storage-ICBM is not a linear function of the
CO2 injected. Initially, with rising quantities of CO2 injected the percentage of
realisations with a positive NPV increases until it plateaus at about 30 Mt. However, the
spread in NPV is still becoming noticeably larger. While larger quantities of CO2
injected can result in higher Storage-ICBM NPVs, they can also result in significantly
lower NPVs. This implies that for the realisations that inject large quantities of CO2 the
economic risk increases.
242
1,500
2
NPV Storage-ICBM, A$M/100 km 1,000
500
0
0 20 40 60 80 100 120 140
-500
-1,000
-1,500
-2,000
Figure 7.30: The NPV of Storage-ICBM as a function of the cumulative CO2 injected in Storage-
ICBM.
Figure 7.30 indicates that for projects that inject and store less than 10 Mt of CO2 over
their project life, the NPV of Storage-ICBM is negative. The project life is defined by a
maximum run time of 57 years or until the CO2 breakthrough concentration at the
production well is achieved (breakthrough concentration defined as 7% CO2 in the
produced gas – see Chapter 4). According to Figure 7.31, 20% of the realisations inject
10 Mt of CO2 or less. These cases are not profitable. The first positive NPV is recorded
for a cumulative quantity of CO2 injected of approximately 14 Mt. For a range of
cumulative CO2 injected between 30 and 100 Mt the probability of a realisation with a
positive NPV is approximately 63%. Figure 7.31 indicates that approximately 60% of
realisations fall into this range. For a range of 60 -70 Mt of CO2 injected (about 8%
probability) the probability of a positive NPV is 70%. For 100 Mt of CO2 injected, and
more, the probability of a positive NPV of Storage-ICBM decreases to 40%. However,
only 1% of realisations were found to inject that much CO2. The highest quantity of
CO2 injected was determined as 124 Mt, the minimum was only 0.64 Mt.
243
0.0
P10
0.1
Cumulative probability 0.2
0.3
0.4
P50
0.5
0.6
0.7
0.8
0.9 P90
1.0
0 20 40 60 80 100 120
Figure 7.31: Cumulative probability of the cumulative CO2 injected in Storage-ICBM showing P90
(2.64 Mt of CO2), P50 (40 Mt of CO2), and P10 (79 Mt CO2) confidence levels.
7.4.6 SENSITIVITY TO INCREMENTAL RECOVERY
The dependence of the NPV of Storage-ICBM on incremental gas recovery is

demonstrated in Figure 7.32. Realisations for which the cumulative recovery is less than
for the corresponding primary recovery case (i.e. negative incremental recovery) have
less than 13% chance of being economically viable. The probability of producing less
than or the same quantity of gas than during primary recovery is approximately 20%.
This is demonstrated in Figure 7.33. 90% of cases have incremental recoveries of more
than -2.74 Bm3, 50% recover more than 0.88 Bm3 incrementally, and 10% recover more
than 5.17 Bm3 of incremental gas (Figure 7.33).
If incremental recovery exceeds 2 Bm3 the NPV of Storage-ICBM is highly likely to be

positive (85% probability) (Figure 7.32). The probability of the incrementally recovered
gas exceeding 2 Bm3 is approximately 40% (Figure 7.33).
244
2,000
2
1,500
1,000
500
0
-8 -6 -4 -2 0 2 4 6 8
-500
-1,000
-1,500
-2,000
3
Incremental CBM recovery, Bm
Figure 7.32: NPV of Storage-ICBM as a function of incremental gas recovery.
0.0
0.1
0.2 P10
0.3
0.4
0.5
P50
0.6
0.7
0.8 P90
0.9
1.0
-8 -6 -4 -2 0 2 4 6 8
Incremental CBM recovery, Bm3
Figure 7.33: Cumulative probability of incrementally recovered gas during Storage-ICBM showing
P90 (-2.74 Bm3), P50 (0.88 Bm3), and P10 (5.17 Bm3) confidence levels.
245
7.4.7 THE SPECIFIC COST OF CO2 AVOIDED IN STORAGE-ICBM
The cumulative probability of the specific cost of CO2 avoided in Storage-ICBM is

presented in Figure 7.34. To determine the specific cost of CO2 avoided no incentives
for storing CO2 are included in the analysis. This means the CO2 price is set to zero.
However, no CO2 purchase cost is included either, thus showing only the cost of
Storage-ICBM, not CCS. The CO2 avoided calculations are based on the NGCC power
station described in the Spring Gully case study in Chapter 4.
1.0
0.9
0.8
P90
0.7
0.6
0.5
0.4
P50
0.3
0.2
0.1
P10
0.0
-100 0 100 200 300 400 500
Cost of Storage-ICBM, A$/t CO2 avoided

Figure 7.34: Cumulative probability of the specific cost of CO2 avoided in Storage-ICBM showing
P10 (A$-0.17/t), P50 (A$35.64/t), and P90 (A$305.60/t) confidence levels.
Figure 7.34 shows that the probability that the specific cost is negative is approximately
10% (P10). This means for 10% of the cases Storage-ICBM is profitable without any
external incentives provided for the injection of CO2. The minimum specific cost
obtained is A$-55.27/t of CO2 avoided. This implies that the indirect revenue resulting
from each tonne of CO2 avoided in Storage-ICBM is A$55.27/t which reflects the
revenue from incremental methane recovery. The maximum specific cost of Storage-
ICBM was determined as A$2,197.42/t of CO2 avoided, though 80% of specific costs
are less than A$100/t and only 3% exceed A$1,000/t of CO2 avoided. Figure 7.35 shows
246
that the most likely specific cost of Storage-ICBM is in the range of A$10/t – A$19.9/t.
50% of the specific costs are less than A$35.64/t of CO2 avoided and 90% of the costs
are below A$305.60/ t.
0.02
0.018
0.016
0.014
Frequency
0.012
0.01
0.008
0.006
0.004
0.002
0
- .9
- .9
.9
- .9
- .9
- .9
.9
- .9
- .9
.9
- 9 .9
.9
40 9.9
70 9.9
.9
9 0
10 -10
-1 - -4
13 109
16 139
19 169
22 199
25 229
28 259
35 289
50 399
65 549
80 699
95 849
99
10 - 79
-1
-4
-
9
-
9.
9.
0
-4
Cost of Storage-ICBM, A$/t CO2 avoided

Figure 7.35: Histogram of the specific cost of CO2 avoided in Storage-ICBM up to a cost of
A$1,000/t.
7.4.8 THE EFFECT OF THE CO2 PRICE AND THE GAS PRICE
In section 7.4.3 it was observed that the CO2 price and the gas price only have a very
small effect on the NPV of Storage-ICBM and that the Spearman coefficient is negative
(–0.07 and -0.02 respectively). To investigate this, the NPV of Storage-ICBM is
presented with respect to the CO2 price in Figure 7.36 and as a function of gas price in
Figure 7.37. No significant relationships can be derived from the plots. This confirms
the findings from section 7.4.3 that the NPV of Storage-ICBM is largely insensitive to
the CO2 price and the gas price. As the NPV is slightly more sensitive to the CO2 price
than to the gas price, the subsequent analysis is performed with respect to CO2 prices
only, but the findings apply to gas prices as well.
247
2,000
2
1,500
1,000
500
0
0 10 20 30 40 50 60
-500
-1,000
-1,500
-2,000
CO2 price, A$/t
Figure 7.36: NPV of Storage-ICBM as a function of the CO2 price.
2,000
2
1,500
1,000
500
0
-500 0 2 4 6 8 10 12 14 16
-1,000
-1,500
-2,000
Gas price, A$/GJ

Figure 7.37: NPV of Storage-ICBM as a function of the gas price.
To further investigate the effect of the CO2 price on the economics, the NPV of Storage-
ICBM is analysed with respect to three fixed CO2 prices. This means no random
samples are generated for the CO2 price from the probability distribution described in
248
section 7.3.2. The prices are: A$0/t, A$23/t, and A$50/t. The price of A$0/t is used to
highlight the economics of Storage-ICBM in the absence of any incentive for storing
CO2. The CO2 price of A$23/t is representative of the Australian carbon tax as of 2012.
The price of A$50/t corresponds approximately to the maximum sample value recorded
for the CO2 price during the Monte Carlo simulation. The resulting probability
distributions are presented in Figure 7.38.
0.0
P10
0.1
NPV
0.2
CO2 = A$0/t
0.3
CO2 = A$23/t
0.4 CO2 = A$50/t
0.5
P50
0.6
0.7
0.8 P90
0.9
1.0
-4,000 -3,000 -2,000 -1,000 0 1,000 2,000
NPV Storage-ICBM, A$M/100 km2
Figure 7.38: Cumulative probability distribution for the NPV of Storage-ICBM for three fixed CO2
prices: A$0/t (grey), A$23/t (blue), and A$50/t (green) in comparison to the NPV obtained using the
normally distributed CO2 prices (black).
Figure 7.38 highlights that the probability that the NPV of Storage-ICBM is positive
increases with increasing CO2 price. In the absence of an external incentive for the
injection of CO2, the probability that the NPV is positive is 10% (P10). This was
already determined by analysing the distribution of the specific cost of CO2 avoided in
section 7.4.7.
For the scenario for which the CO2 price is representative of the carbon tax of A$23/t,
the probability of a positive NPV is approximately 42%. There is a 90% (P90)
probability that the NPV is higher than A$M-934/100 km2, 50% of the cases have a
NPV of more than A$M-110/100 km2 (P50), and for 10% of the cases the NPV exceeds
A$M400/100 km2 (P10). These results are comparable to those obtained through the
249
generation of random samples for the CO2 price (see Figure 7.38 for a comparison).
This observation is not surprising as the CO2 price of A$23/t is similar to the mean of
the CO2 price distribution of A$26.69/t.
For the high CO2 price of A$50/t a 60% possibility of a positive economic outcome was
determined (i.e. NPV below zero). 90% of the cases have a NPV of more than A$M-
360/100 km2 and 50% have a NPV of more than A$M201/100 km2. Figure 7.38 shows
that the upside (i.e. the maximum NPV achieved) is noticeably higher when the CO2
price increases and the downside (i.e. the minimum NPV obtained) is smaller.
The analysis demonstrates that consistently higher CO2 prices do increase both the
average NPV as well as the probability of a positive NPV. However, other parameters
(mostly permeability) have the potential to override the benefits of a higher CO2 price.
Thus, under those circumstances the CO2 price becomes comparatively insignificant
which results in the NPV of Storage-ICBM being relatively insensitive to the CO2 price.
As gas recovery is also predominantly affected by reservoir permeability, the same
applies for the gas price to which the NPV of Storage-ICBM was found to be even less
sensitive. The subsequent analysis of critical reservoir property values provides further
information on the effect of CO2 prices and gas prices on Storage-ICBM economics.
7.4.9 CRITICAL RESERVOIR PROPERTY VALUES FOR STORAGE-ICBM
The economic feasibility of Storage-ICBM is a function of both reservoir properties and

economic parameters. Less favourable reservoir properties require higher CO2 prices to
be economic, whereas seams with very favourable properties for Storage-ICBM can
tolerate the absence of external incentives. To improve the understanding of the
minimum reservoir property requirements, the NPV is analysed with respect to input
data. Critical values for the uncertain reservoir properties permeability, gas content (and
corresponding seam saturation), and CO2 Langmuir volume are established. The
minimum critical value is defined as the minimum value of a property for which a
positive NPV of Storage-ICBM was recorded. Similarly, the maximum critical value is
defined as the maximum value of a property for which a positive NPV was recorded.
For the analysis presented in this chapter, using the randomly sampled CO2 prices and
gas prices, the minimum permeability required to obtain a positive NPV is determined
250
as 0.29 mD. The lowest gas content for which a positive NPV was recorded for Storage-
ICBM was 2.59 m3/t (corresponding to a seam saturation of 13.81%) and the minimum
CO2 Langmuir volume was 15.79 m3/t. Maximum critical values did not apply.
However, critical reservoir property values are likely to be a function of costs and
prices. Thus, in this section they are analysed with respect to the CO2 prices from
section 7.4.8 (gas price and compression costs are randomly sampled from the relevant
distributions presented in section 7.3.2) and the gas prices from Chapter 6 (A$5/GJ and
A$8/GJ) in addition to a low gas price of A$3/GJ and a high gas price of $16/GJ
representative of current Asian LNG spot prices (CO2 price and compression costs are
randomly sampled from the relevant distributions presented in section 7.3.2) .The
results are summarised in Table 7.2.
Table 7.2: Critical values for the reservoir properties permeability, gas content, and CO2 Langmuir
volume for the randomly sampled CO2 and gas prices, for three fixed CO2 prices, and for four fixed
gas prices.
With randomly
CO2 price Gas Price
Reservoir property sampled CO2 prices
and gas prices A$0/t A$23/t A$50/t A$3/GJ A$5/GJ A$8/GJ A$16/GJ
Minimum permeability, mD 0.29 0.34 0.29 0.26 0.29 0.29 0.29 0.29
Maximum permeability, mD n/a 27.81 366.52 n/a n/a 373.13 373.13 373.13
Minimum gas content, m3/t 2.59 9.04 5.91 1.65 1.95 1.95 1.95 5.01
Maximum gas content, m 3/t n/a n/a n/a n/a n/a n/a n/a n/a
Minimum seam saturation, % 13.81 48.22 31.5 8.78 10.43 10.43 10.43 26.7
Maximum seam saturation, % n/a n/a n/a n/a n/a n/a n/a n/a
Minimum CO2 Langmuir volume, m3/t 15.79 15.79 15.79 15.79 15.79 15.79 15.79 15.79
Maximum CO2 Langmuir volume, m 3/t n/a 50.41 n/a n/a n/a n/a n/a n/a
Table 7.2 indicates that the minimum permeability required to make Storage-ICBM
economic decreases when the CO2 price increases. For the CO2 price of A$0/t the
minimum economic permeability was recorded as 0.34 mD which decreases to 0.29 mD
for the CO2 price of A$23/t. For the CO2 price of A$50/t the minimum permeability is
slightly lower at 0.26 mD. This could imply that a minimum permeability exists below
which CO2 storage in coal seams will not be economically feasible for a practical range
of economic parameters and that the minimum permeability is largely insensitive to CO2
prices.
A maximum permeability was defined for the two lower price scenarios (i.e. A$0/t,
A$23/t). For the CO2 price of A$0/t no positive NPV was recorded above a permeability
251
of 27.81 mD. For the CO2 price of A$23/t the maximum permeability was determined
as 366.52 mD. For the high CO2 price of A$50/t a maximum critical permeability did
not apply; positive NPVs were recorded for permeabilities of greater 900 mD
(maximum permeability value of the distribution: 1,000 mD). A maximum critical
permeability exists, because the performance of primary recovery improves when the
permeability increases. Thus, the injection of CO2 becomes less effective. Also, higher
permeabilities facilitate early CO2 breakthrough at the production well, leading to
abandonment of the project and potentially lower volumes of gas recovered and CO2
stored. Therefore, a maximum critical permeability exists for the two lower CO2 prices
of A$0/t and A$23/t. If the CO2 price is sufficiently high, this can compensate for the
reduced quantities of gas recovered and CO2 stored during Storage-ICBM in high
permeability reservoirs.
The critical permeability for Storage-ICBM is largely insensitive to the gas price. For
gas prices ranging from A$3/GJ to A$16/GJ the minimum permeability is 0.29 mD - the
same as for the fixed CO2 price of A$23/t. The maximum permeability was determined
as 373.13 mD for gas prices ranging from A$5/GJ to A$16/GJ. Only for a gas price of
A$3/GJ did no maximum critical permeability apply. The combination of higher gas
prices and higher permeabilities improves the profitability of primary recovery to that
degree that the injection of CO2 would not add any value.
The change in the minimum gas content requirements as a function of CO2 price is
significantly more pronounced than the change in the minimum permeability required.
In the absence of a CO2 price the lowest gas content for which a positive NPV was
recorded was 9.04 m3/t which corresponds to a seam saturation of 48.22%. This
decreased to 5.91 m3/t (seam saturation 31.5%) for a CO2 price of A$23/t and 1.65 m3/t
(seam saturation 8.78%) for the high CO2 price of A$50/t. The gas content of 1.65 m3/t
was also the lowest sample value of the successful realisations (see Table 7.1). With
respect to gas prices, the minimum critical gas content is only affected by the very high
gas price of A$16/GJ. For gas prices ranging from A$3/GJ to A$8/GJ the minimum
critical gas content is determined as 1.95 m3/t, which corresponds to a minimum critical
seam saturation of 10.43%. For the gas price of A$16/GJ, however, the minimum
critical gas content increases to 5.01 m3/t (seam saturation of 26.7%). This is a result of
primary recovery becoming increasingly more profitable when gas prices rise. For the
low gas content of 1.95 m3/t primary recovery is unlikely to be economic, but Storage-
252
ICBM still has the potential to be profitable due to the revenues obtained from CO2
injection and storage. If primary recovery is not financially viable, all gas in the
reservoir is available for Storage-ICBM as primary recovery would not be performed.
However, for higher gas prices primary recovery does become viable and, as a
consequence, the profitability of Storage-ICBM decreases. The CO2 related incentives
may not be sufficient anymore to ensure that the NPV of Storage-ICBM is higher than
that of primary recovery. Only when the gas content increases to more than 5 m3/t does
the combination of CO2 prices and recovery enhancement again have the potential to
yield economic outcomes favourable over those of primary recovery for the high gas
price of A$16/GJ. A maximum critical gas content did not apply.
The minimum critical CO2 Langmuir volume of 15.79 m3/t is not affected by changes in
CO2 prices or gas prices. A maximum critical CO2 Langmuir volume only exists in the
absence of a CO2 price (maximum critical CO2 Langmuir volume of 50.41 m3/t for a
CO2 price of $0/t). The CO2 Langmuir volume defines the theoretical storage capacity
of a coal reservoir. If there is no price associated with the injection of CO2 lower
adsorptive capacities towards CO2 are preferable as injection related costs are less and
recovery enhancement occurs faster. Gas recovery is affected by the CO2 Langmuir
volume to that degree that the effects of CO2 injection are felt sooner when the CO2
Langmuir volume is low and observed later when the CO2 Langmuir volume is high.
The analysis showed that higher CO2 prices lower the minimum critical property values
and increase the maximum critical values whereas higher gas prices can increase the
minimum critical values. Thus, higher gas prices will not necessarily lower the
threshold for Storage-ICBM to become economically viable, but the presence of a CO2
price will.
It is important to note that the critical values are only valid for the vertical wells
assumed in this analysis. Using horizontal wells for injection and production could
notably improve the critical values, particularly for permeability. This was indicated in
Chapter 6 in which it was demonstrated that significant quantities of CO2 could be
stored in low permeability reservoirs through the application of horizontal wells.
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7.5 DISCUSSION
The analysis showed that the results obtained with the methodology presented here were
affected by two issues. The first is a technical issue that resulted in a large number of
simulation runs to fail (217 out of 500). This was reflected in the distributions of the
parameters gas content and permeability. A comparison between all inputs and the
inputs that yielded successful realisations demonstrated that deviations existed in the
distribution of these two properties. The deviations affect the output distribution of the
NPV of Storage-ICBM. However, despite the differences the distributions were still
very similar and the analysis was continued.
Another consequence of the limited number of successful realisations is the small

sample size leading to relatively coarse output distributions. Also, the number of
realisations (283) is small in comparison to the number of uncertain variables defined
(6). Still, the mean of the output distribution should be largely unaffected by this as the
limited sample size generally only implies that the low probability events are poorly
sampled so that inaccuracies increase there while the mean remains approximately the
same.
The second issue is associated with the operational design of the Monte Carlo
simulation. The Monte Carlo analysis incorporates variability in reservoir properties and
economic parameters. Generally, the operational design would be adjusted if the
parameter assumptions changed. Tight reservoirs would require a larger number of
wells than high permeability reservoirs to extract gas in commercial quantities.
Furthermore, the CO2 injection pressure would be adjusted as a function of the reservoir
permeability. In this analysis injection is performed at maximum bottomhole pressure of
13,000 kPa. This is necessary for the very low permeability scenarios, though the high
permeability scenarios would benefit from lower injection pressures. This was indicated
in Chapter 6 where for the initial permeability of 100 mD the highest trialled injection
rate was in many cases not the most profitable option. In the Monte Carlo simulation the
operating parameters cannot be adjusted to suit the changing reservoir properties. As a
consequence, most realisations (78%) that have reservoir permeabilities of 100 mD or
more exhibited negative NPVs.
The bottomhole pressure was selected as an operating parameter as it proved difficult to

determine an injection rate that was suitable over the large range of reservoir
254
permeabilities. Choosing an injection rate too high resulted in failed simulation runs for
the low permeability realisations (even if the rate was increased slowly over a
considerable period of time), but selecting low injection rates would result in the storage
capacity of realisations with high permeabilities to be significantly underutilised.
Therefore, in the end and after many failed trials, bottomhole pressure was chosen as the
controlling parameter. This also had downsides, as described above, but resulted in
more simulation runs being completed successfully and improved utilisation of the CO2
storage capacity. In practice the controlling parameter would be adjusted to suit
reservoir conditions. Therefore, the problems associated with the controlling parameter
are a result of the large range of the input parameters permeability and gas content.
7.6 CONCLUSIONS
This chapter introduced a methodology that incorporates uncertainty in reservoir
properties and economic parameters into the economic assessment of Storage-ICBM.
The method was demonstrated using the Spring Gully case study as an example.
The results of the Monte Carlo simulation show that permeability is a key reservoir
property that will define the technical and economic success of Storage-ICBM. While
the maximum theoretical CO2 storage capacity was also found to have a noticeable
impact on the NPV of Storage-ICBM, the analysis indicated that it can be overridden by
reservoir permeability. Due to the large impact of permeability, the NPV of Storage-
ICBM at Spring Gully was found to be relatively insensitive to the parameters CO2
price, gas price, and gas content.
Critical values were established for the reservoir properties permeability, gas content
(seam saturation), and CO2 Langmuir volume as a function of CO2 and gas prices. The
findings strongly indicated that below a permeability of 0.1 mD Storage-ICBM is not
economic, even for a CO2 price as high as A$50/t. It was also observed that the CO2
price did not appear to have a significant impact on the minimum requirements for
reservoir permeability as the minimum critical permeability only decreased from 0.34
mD for a CO2 price of A$0/t to 0.26 mD for a CO2 price of A$50/t. Maximum critical
permeabilities of 27.81 mD and 366.52 mD were established for a CO2 price of A$0/t
and A$23/t respectively. For a CO2 price of $50/t a maximum critical permeability did
not apply.
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The minimum critical permeability of 0.29 mD was not affected by changes in the gas
price. The maximum critical permeability was determined as 373.13 mD for gas prices
ranging from A$5/GJ to A$16/GJ. For the lower gas price of A$3/GJ a maximum
critical permeability did not apply.
The minimum gas content requirements changed notably as a function of the CO2 price.
For the high price of A$50/t a low gas content of 1.65 m3/t (corresponding to a seam
saturation 8.78%) was sufficient for Storage-ICBM to be economically viable, while in
the absence of a CO2 price the gas content had to be as high as 9.04 m3/t (seam
saturation of 48.22%).
With respect to gas prices, the minimum critical gas content was only affected by the
very high gas price of A$16/GJ. For gas prices ranging from A$3/GJ to A$8/GJ the
minimum critical gas content was determined as 1.95 m3/t (seam saturation of 10.43%).
For the gas price of A$16/GJ, however, the minimum critical gas content increased to
5.01 m3/t (seam saturation of 26.7%).
The minimum critical CO2 Langmuir volume of 15.79 m3/t is not affected by changes in
CO2 prices or gas prices. A maximum critical CO2 Langmuir volume only exists in the
absence of a CO2 price (CO2 price = A$0/t, maximum critical CO2 Langmuir volume =
50.41 m3/t).
These specific observations are only valid for the vertical wells assumed in this study.
Critical values for permeability and the effect of the CO2 price are likely to increase
through the application of horizontal wells that allow larger quantities of CO2 to be
injected. On a general level, the analysis demonstrated that higher CO2 prices decrease
the minimum critical property values and increase the maximum critical values. Gas
prices, on the contrary, where found to have the potential to increase minimum critical
values. Thus, higher gas prices will not necessarily lower the threshold for Storage-
ICBM to become economically viable, but the presence of a CO2 price will. Based on
the findings presented in this study the following requirements to maximise the
probability of an economic Storage-ICBM project were also identified;
permeability between 1 and 100 mD

CO2 Langmuir volume greater 35 m3/t
cumulative CO2 injected between 30 and 100 Mt
incremental recovery more than 2,000 Mm3
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If the Storage-ICBM project injects less than 10 Mt of CO2 or recovers less gas than
during primary recovery the probability of a positive NPV is zero or very low. These
observations can also be applied as screening criteria for economic Storage-ICBM.
This list of requirements highlights again the importance of permeability as both the
cumulative CO2 injected and the incremental recovery are functions of reservoir
permeability. The optimum permeability range is limited to 100 mD. However, if the
injection rate was to be adjusted as a function of reservoir permeability, the number of
realisations with permeabilities of 100 mD and higher that are economically viable
(currently 22%) could improve significantly.
One of the objectives of this chapter was to demonstrate a methodology that

incorporates uncertainty into the analysis of Storage-ICBM economics. In the analysis
presented here the results obtained with this method were affected by two issues; one
technical in nature the other a design feature. Problems in selecting an operational
design for the Monte Carlo simulation that is appropriate for a large number of reservoir
properties proved difficult and indicated that Monte Carlo simulation is more easily
applied to single wells or an area of known similar geology rather than a large well
field.
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8 CONCLUSIONS
This thesis investigates the economic feasibility of CO2 storage in coal reservoirs in an
Australian and a more general context. The objective is the identification of screening
criteria for economic Storage-ICBM. This was accomplished through the development
of a methodology that integrates reservoir simulation with techno-economic modelling
for the assessment of Storage-ICBM economics, the identification of the reservoir
properties to which the economics of Storage-ICBM are most sensitive, the
establishment of preliminary operating guidelines, and probabilistic analyses to
establish the conditions that provide CO2 storage in coal with the highest possibility of
economic success.
The findings of this thesis indicate that without a financial incentive for the injection
and storage of CO2, carbon capture and storage in coal is not likely to be economically
viable. Only a number of Storage-ICBM projects will be able to afford to pay a (small)
price for CO2, whereas for most projects an additional incentive has to be provided to
make CO2 storage profitable. Higher gas prices can improve the viability of Storage-
ICBM, but they also improve primary recovery economics. Thus, higher gas prices will
not necessarily drive the commercial development of Storage-ICBM. In this thesis in
the initial analyses current economic conditions are assumed to assess the financial
viability of CO2 storage in coal. This means the CO2 injected is treated as a cost to the
storage operator equivalent to current CO2 capture costs. Later, to establish screening
criteria for Storage-ICBM, the assumption that the operator receives a revenue per tonne
of CO2 injected and stored is applied. This is based on the assumption that large scale
CCS will only be applied if the mitigation of GHG emissions effectively saves or earns
money compared to the business-as-usual scenario.
The integrated methodology enables the assessment of Storage-ICBM economics

through comparative analysis of both the primary and enhanced recovery process. A
method that clearly highlights the impact of CO2 injection is essential to avoid
overestimates of the effect of CO2 injection. This also presents a crucial step in enabling
objective comparison between different storage sinks. The methodology was
demonstrated through application to the Spring Gully CBM field in the Bowen Basin in
Queensland, Australia as an example case study. In the analysis current economic
conditions were assumed to show the cost of Storage-ICBM. This means the CO2
258
injected is treated as a cost to the storage operator equivalent to current CO2 capture
costs. No incentive is provided for the injection and storage of CO2. The case study
demonstrated that if no distinction occurred between Storage-ICBM and CO2-ECBM
the specific cost of CO2 avoided in CCS would be significantly underestimated. With
current capture costs CO2 storage in the high permeability, high gas content Spring
Gully CBM field is not economically viable, but the estimated cost of CO2 of A$72.35/t
would have to decrease by approximately 90% for CCS-ICBM at Spring Gully to break
even.
To identify the properties with the highest impact on the economics of Storage-ICBM,
sensitivity analysis was performed. The analysis found that the economic parameter to
which the economics of Storage-ICBM are most sensitive is the cost of compression
due to the high energy requirements to compress CO2. For the Spring Gully case study
CO2 compression contributed more than 80% to the total cost of Storage-ICBM when
the cost of purchasing CO2 was excluded. The reservoir property with the highest
impact on Storage-ICBM is reservoir permeability for which significant changes in the
specific cost of Storage-ICBM were observed for permeabilities below 10 mD (decrease
from more than A$600/t to less than A$-2/t for a permeability increase from 0.1 mD to
10 mD), though for permeabilities above 10 mD the changes were much less (decrease
from A$-2.7/t to A$-13.9/t for a permeability increase from 10 mD to 1,000 mD). Gas
content was determined to be the second most important reservoir property. Here, the
specific cost decreased from A$6/t to A$-20/t for a rise in gas content from 3.75 m3/t to
18.75 m3/t. The large variability in permeability in comparison to the variability in gas
content is the main reason for permeability having such a large effect on CO2 storage
economics. Reservoir permeability can define the technical and financial success of
Storage-ICBM and thus, it is the key parameter for establishing screening criteria for
economic Storage-ICBM.
Based on the analyses performed as part of this thesis it was found that the relative
benefit of Storage-ICBM can be greater for coal reservoirs that are less economic to
start with. Applying the assumption that the operator receives a revenue per tonne of
CO2 injected and stored, high permeability coal seams are not necessarily the best
candidates for CO2-ECBM. High permeability reservoirs enable high flow rates and
thus exhibit higher production rates than low permeability coals. While CO2 storage in
such coal reservoirs is more likely to be economically viable, when prices are
259
sufficiently high (here: CO2 price A$40/t, gas price: A$8/GJ) the application of Storage-
ICBM to low permeability coal seams (k = 1 mD) can add considerably more value to a
CO2-ECBM project than its application to high permeability coal seams (k = 100 mD).
Primary recovery from high permeability coals is already very profitable and leaves
comparatively little incremental gas in place. Similarly, the application of Storage-
ICBM to undersaturated coal reservoirs can improve project economics more than its
application to saturated reservoirs as recovery from the undersaturated seams is less
profitable to start with.
While the application of Storage-ICBM can add more value to coal reservoirs with
reservoir properties generally considered less favourable when gas and CO2 prices are
high, the first commercial Storage-ICBM projects are likely to be those for which the
threshold to economic viability is the lowest. To assist in identifying such reservoirs
three sets of guidelines were established; a) requirements to maximise the probability of
an economic Storage-ICBM project; b) minimum requirements for key reservoir
properties as a function of gas and CO2 prices; and c) preliminary operating guidelines.
The results of the probabilistic analyses lead to the identification of the following
requirements that provide basic ‘rules of thumb’ for maximising the probability of an
economic Storage-ICBM project;
reservoir permeability between 1 and 100 mD
CO2 Langmuir volume greater 35 m3/t
cumulative CO2 injected between 30 and 100 Mt/100 km2
incremental recovery more than 2,000 Mm3/100 km2
Further:
if the Storage-ICBM project injects less than 10 Mt/100 km2 of CO2 or recovers
less gas than during primary recovery the probability of a positive NPV is very
low.
Minimum requirements specific to the vertical wells assumed in this thesis were
established for the reservoir properties permeability, gas content, and CO2 Langmuir
volume as a function of CO2 and gas prices.
In the absence of a CO2 price, the reservoir permeability could be as low as 0.3
mD for Storage-ICBM to still be economically viable.
260
Neither the CO2 price nor the gas price appeared to have a significant impact on
the minimum requirement for reservoir permeability as the permeability only
decreased from 0.34 mD for a CO2 price of A$0/t to 0.26 mD for a CO2 price of
A$50/t. For the range of gas prices evaluated from A$3/GJ to A$16/GJ the
minimum permeability did not change at all.
The effect of the CO2 price on the minimum gas content requirement is
significant; in the absence of a CO2 price the gas content had to be as high as
9.04 m3/t while it decreased to 1.65 m3/t for a CO2 price of A$50/t.
The minimum gas content of 1.95 m3/t is insensitive to gas prices of A$8/GJ or
less, but increases to 5.01 m3/t for the high gas price of A$16/GJ.
This highlights that CO2 prices can compensate for the lack of available gas,
whereas gas prices increase the profitability of primary recovery and thus
decrease the profitability of Storage-ICBM.
A minimum CO2 Langmuir volume of 15.79 m3/t was determined. The CO2
Langmuir volume was not affected by changes in CO2 prices or gas prices.
In general:
higher CO2 prices decrease the minimum requirements for a reservoir property
while higher gas prices have the potential to increase the minimum
requirements.
higher gas prices will not necessarily lower the threshold for Storage-ICBM to
become economically viable, but the presence of a CO2 price will.
To provide Storage-ICBM with the highest chances of success, a suitable operational

design has to be applied which considers the site specific coal properties and economic
parameters.
Generally, the highest possible injection rate for a given well number is the most
profitable.
Vertical wells are more economic than horizontal wells for Storage-ICBM in
high permeability coals (k = 100 mD), but horizontal wells are generally the
only economically feasible option for low permeability coals (k = 1 mD).
The well spacing is affected by reservoir permeability, gas content, and CO2 and
gas prices. For high prices tight well spacings are favourable whereas for lower
prices wide spacings become increasingly beneficial, though it was found that
261
the well spacing of 500 x 500 m2 performed best over a large range of
operational variable combinations.
The lower the permeability, the tighter the well spacing needs to be to produce
gas and inject CO2 in economic quantities.
The findings in this thesis highlight that permeability is the key factor that is likely to
determine the feasibility of CO2-ECBM. More research into how to improve the
economic viability of low permeability reservoirs is warranted. Permeability anisotropy
and reservoir layering also have to be considered in this context. Possible means of how
to overcome the issue of low permeability are the application of more advanced
horizontal well models or the injection of flue gas (N2 / CO2 mixture) which is known to
increase reservoir permeability. While the latter limits the storage capacity for CO2, it
could still be a viable option. However, the analysis also demonstrated that under
certain economic conditions (high CO2 prices and gas prices) and with the appropriate
operational design, the injection of CO2 can add more value to low than to high
permeability reservoirs as these generally exhibit poorer primary recovery economics.
The consideration of a large number of reservoir and operational parameters for the
parametric study was too computationally expensive to be performed in this thesis. A
means to enable more comprehensive studies is the application of design of experiments
techniques which can significantly reduce the number of simuation runs required. Thus,
to add more value to the analysis by being able to consider more apects of the CO2-
ECBM process this approach should be applied in the future.
In this analysis it was assumed that CO2 is a net revenue, i.e. a positive income stream is
associated with the injection and storage of CO2. However, if CO2 was to constitute a
net cost, the objective would be to maximise the gas produced per tonne of CO2
injected. Such optimisation should be the subject of further research as this different
objective is likely to affect the coal properties most suited for CO2 storage in coal.
The high costs of CO2 compression were identified as a key contributor to the costs of
Storage-ICBM. The optimisation of compression requirements could achieve
considerable cost savings and is an aspect that not only applies to CO2 storage in coal,
but to other CO2 injection scenarios as well. The weight of the CO2 column within the
wellbore can significantly contribute to the bottomhole pressure. Therefore, assuming
262
compression to bottomhole pressure underestimates the contribution of the CO2 column
and overestimates the injection pressure. Prediction of the pressure contribution from
the CO2 in the wellbore is very complex and thus not commonly performed. Due to the
high relevance of this issue and its complexity detailed research on this issue should be
performed in future work.
The objective of this thesis was to establish preliminary screening criteria for economic
Storage-ICBM. However, the thesis also provides a tool to assess the economic
feasibility of CO2 storage in coal seams and the level of uncertainty associated with it.
The results presented deliver insight into the economics of CO2 storage in coal in an
Australian and also a more general context while providing a starting point for
screening for coal reservoirs that are likely candidates for economic CO2 storage.
263
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APPENDIX - REALISATIONS FROM THE MONTE
CARLO ANALYSIS
291
A 1: NPV of Storage-ICBM, ECBM, CBM, specific cost of CO2 avoided and breakeven gas price as a function of CO2 Langmuir volume, gas content, CO2 price, gas price,
and CO2 compression for the permeability classes k = 0.001 – 0.0099 mD and k = 0.01 – 0.099 mD.
INPUTS OUTPUTS
RESERVOIR PROPERTIES ECONOMIC PARAMETERS NPVs NPV STORAGE-ICBM - f(CO2 PRICE) SPEC COST BREAKEVEN GAS PRICE
Specific cost of
Langmuir CH4 gas CO2 Gas CO2 compressor NPV Storage- CO2 Price = CO2 Price = CO2 Price = CO2 Price = MC
Permeability NPV ECBM NPV CBM CO2 stored - CO2 CO2 Price = 0
volume CO2 content price price power factor ICBM A$0/t A$23/t A$50/t Price
price = $0/t
Class # mD m 3/t m 3/t A$/t A$/GJ MW A$MM/100km 2 A$MM/100km 2 A$MM/100km 2 A$M/100 km2 A$M/100 km 2 A$M/100 km 2 A$/t A$/GJ A$/GJ
1 0.0013 50.16 15.59 35.80 11.23 0.96 -219 -219 0 -224 -220 -216 1,466.62 29.83 29.75
2 0.0014 33.93 9.10 42.41 5.57 0.46 -221 -221 0 -224 -222 -219 2,192.42 76.43 76.43
3 0.0015 47.30 17.23 23.46 7.52 0.97 -117 -212 -95 -118 -114 -110 774.68 7.73 32.22
4 0.0016 23.40 15.11 26.03 3.29 0.56 -219 -219 0 -220 -217 -214 1,752.47 29.18 33.15
k = 0.001 - 0.0099 mD
5 0.0018 43.32 5.30 38.61 2.74 0.82 -218 -218 0 -223 -221 -218 2,197.42 -3,070.52 -3,125.60
6 0.0022 34.37 9.67 31.33 6.41 0.59 -217 -217 0 -222 -218 -214 1,516.68 49.07 49.00
7 0.0025 59.75 16.07 33.45 9.50 0.89 -112 -212 -100 -123 -118 -111 532.97 25.27 25.20
8 0.0026 40.17 2.95 23.46 8.36 0.62 -194 -194 0 -200 -198 -195 1,865.13 -1,583.14 -1,603.43
9 0.0035 55.80 10.65 21.61 6.75 0.49 -210 -210 0 -223 -217 -211 954.97 28.74 28.69
10 0.0045 19.44 16.49 42.41 2.59 0.75 -217 -217 0 -220 -218 -214 1,772.79 23.67 25.11
11 0.0049 67.15 9.55 20.63 3.54 0.63 -219 -219 0 -224 -219 -214 1,059.25 28.33 28.28
12 0.0052 49.87 15.09 33.45 6.16 0.89 -112 -211 -99 -123 -116 -108 410.13 18.50 16.13
13 0.0058 49.16 6.66 29.07 2.59 0.73 -217 -217 0 -226 -221 -215 1,044.65 NR -2,838.75
14 0.0083 34.79 5.62 30.47 11.23 0.55 -220 -220 0 -227 -222 -216 971.18 -1,104.86 -1,140.89
15 0.0090 30.63 14.63 37.33 8.67 0.67 -112 -206 -94 -119 -112 -103 384.80 9.52 22.45
16 0.0097 44.71 9.55 29.63 3.88 0.93 -221 -221 0 -227 -219 -210 663.76 NR 28.34
17 0.0098 31.34 15.96 23.75 5.40 0.74 -115 -215 -100 -122 -115 -107 404.55 16.05 13.95
18 0.0105 25.54 3.70 30.47 8.89 0.95 -213 -213 0 -218 -213 -208 1,044.60 -765.19 -788.44
19 0.0111 63.41 11.48 23.75 2.89 0.90 -210 -210 0 -225 -215 -202 485.96 16.67 16.62
20 0.0122 23.25 16.67 26.59 5.05 0.88 -106 -183 -76 -113 -107 -100 418.96 9.96 9.90
21 0.0178 27.25 13.07 19.93 3.16 0.40 -113 -213 -100 -125 -115 -105 310.77 10.06 17.24
22 0.0197 32.32 8.39 14.22 14.05 0.85 -220 -220 0 -229 -219 -207 530.78 NR NR
23 0.0215 60.83 14.27 43.12 9.92 0.75 -96 -193 -97 -129 -114 -97 198.24 12.51 12.41
24 0.0230 38.21 18.56 35.80 9.92 0.61 -115 -182 -67 -121 -111 -100 285.16 NR NR
25 0.0246 43.57 8.99 32.52 2.59 0.45 -221 -221 0 -233 -220 -204 414.24 NR -2,384.06
26 0.0262 26.64 10.98 36.17 2.08 0.63 -213 -213 0 -224 -213 -200 473.58 15.42 15.34
27 0.0276 65.97 12.59 29.07 7.79 0.81 -121 -217 -96 -136 -119 -99 181.16 9.91 9.85
k = 0.01 - 0.099 mD
28 0.0285 47.92 11.26 26.86 14.05 0.73 -113 -213 -100 -129 -114 -96 196.26 9.70 NR
29 0.0295 34.17 18.19 15.83 8.89 1.00 -113 -179 -67 -127 -116 -102 251.48 NR NR
30 0.0301 18.56 17.21 19.21 12.57 0.91 -112 -159 -47 -128 -118 -106 292.21 NR NR
31 0.0330 35.87 11.81 24.05 8.89 0.62 -210 -210 0 -230 -215 -199 373.23 9.92 9.87
32 0.0338 36.55 3.81 28.79 5.32 0.40 -218 -218 0 -229 -218 -205 491.42 -339.87 -361.45
33 0.0351 36.55 10.05 23.75 5.74 0.66 -119 -219 -99 -129 -115 -98 205.36 14.42 NR
34 0.0377 20.98 9.98 24.34 7.17 0.54 -216 -216 0 -230 -217 -202 405.34 NR NR
35 0.0408 18.31 10.12 27.41 5.83 0.96 -101 -200 -99 -127 -113 -97 215.26 14.95 14.89
36 0.0409 53.99 16.91 36.54 10.07 0.49 -103 -196 -93 -131 -113 -92 165.46 NR 4.43
37 0.0433 30.24 15.17 25.47 3.54 0.76 -116 -202 -87 -131 -114 -94 178.98 6.50 6.44
38 0.0459 52.23 11.34 38.17 9.92 0.88 -211 -211 0 -236 -217 -194 280.33 10.52 10.44
39 0.0459 14.81 12.91 23.75 5.32 0.98 -105 -205 -100 -125 -110 -92 190.02 5.45 5.39
40 0.0493 29.09 11.51 26.03 4.68 0.97 -124 -221 -97 -128 -111 -91 175.88 8.85 8.80
41 0.0510 16.61 14.95 43.12 7.17 0.78 -121 -196 -75 -132 -115 -95 182.68 NR NR
42 0.0729 40.02 6.02 36.93 9.50 0.52 -228 -228 0 -243 -225 -204 305.66 -265.49 -303.52
43 0.0767 20.00 7.50 41.16 3.88 0.63 -214 -214 0 -240 -221 -200 301.61 -476.75 -552.96
44 0.0770 38.60 10.23 35.45 5.74 0.77 -124 -222 -98 -140 -119 -94 152.08 NR NR
45 0.0804 30.45 9.71 41.16 7.09 0.68 -227 -227 0 -237 -216 -192 262.83 NR 12.12
and CO2 compression for the permeability classes k = 0.1 – 0.99 mD.
INPUTS OUTPUTS
Specific cost of
price = $0/t
Class # mD 3 3 A$/t A$/GJ MW 2 2 2 2 2 2
m /t m /t A$MM/100km A$MM/100km A$MM/100km A$M/100 km A$M/100 km A$M/100 km A$/t A$/GJ A$/GJ
46 0.1207 33.16 8.31 27.69 10.58 0.49 -220 -220 0 -250 -225 -196 231.19 -425.06 -483.81
47 0.1230 38.50 11.51 25.47 6.41 0.58 -187 -187 0 -247 -218 -184 195.49 5.39 5.33
48 0.1239 17.23 8.83 19.21 6.92 0.95 -220 -220 0 -242 -214 -181 197.12 -339.96 -377.32
49 0.1265 48.60 11.25 27.14 6.50 0.99 -119 -204 -85 -162 -131 -95 121.19 5.77 5.71
50 0.1301 57.04 17.78 34.75 12.57 0.59 -96 -192 -97 -142 -110 -72 101.11 NR NR
51 0.1401 32.62 11.81 35.10 7.61 0.92 -104 -200 -97 -147 -116 -79 108.83 4.87 4.49
52 0.1554 25.85 15.28 43.89 4.49 0.95 -87 -188 -101 -138 -100 -54 82.54 NR NR
53 0.1758 36.60 11.03 33.45 8.47 0.84 -130 -227 -97 -154 -119 -79 102.41 5.30 5.22
54 0.2149 55.11 7.16 20.96 7.61 0.74 -212 -212 0 -268 -232 -190 170.44 -179.76 -206.46
55 0.2224 29.64 10.66 22.86 12.57 0.80 -84 -181 -98 -149 -111 -65 88.87 5.12 5.07
56 0.2289 48.95 9.04 35.10 3.77 0.68 -242 -242 0 -257 -218 -173 153.10 -322.85 -420.54
57 0.2628 37.09 18.62 9.63 10.07 0.97 -64 -97 -34 -104 -51 10 45.52 18.05 21.68
58 0.2653 51.28 11.39 21.61 5.57 0.92 -105 -191 -86 -168 -123 -70 85.69 3.93 3.88
59 0.2785 19.89 8.10 35.80 2.59 0.56 -227 -227 0 -256 -212 -161 135.04 -129.14 -177.65
60 0.2854 32.62 10.83 32.52 7.43 0.89 -137 -206 -69 -184 -139 -85 93.33 4.43 4.36
61 0.2924 16.71 16.29 37.74 9.01 0.93 49 54 6 -17 48 124 5.93 1.99 9.19
62 0.3183 34.10 9.98 34.75 7.79 0.77 -116 -215 -99 -157 -112 -58 79.16 5.40 5.32
k = 0.1 - 0.99 mD
63 0.3363 18.98 18.57 39.55 6.33 0.83 330 538 208 197 279 375 -55.27 0.66 4.29
64 0.3499 35.11 15.63 18.05 12.57 0.93 -118 -178 -60 -142 -78 -3 51.19 2.86 NR
65 0.3550 39.12 15.36 32.52 4.19 0.97 -84 -150 -65 -159 -98 -26 60.03 NR 2.47
66 0.3723 52.63 10.90 31.63 2.89 1.00 -123 -219 -97 -170 -117 -55 73.65 -2,133.06 -2,938.53
67 0.3836 33.99 5.16 9.63 8.17 0.43 -195 -195 0 -263 -224 -178 155.10 -133.88 -143.24
68 0.3993 34.63 11.24 15.83 4.87 0.60 -200 -200 0 -261 -205 -139 106.76 3.32 3.28
69 0.4005 43.25 11.62 27.14 5.23 0.45 -93 -190 -97 -167 -111 -44 67.90 3.08 3.02
70 0.4400 33.78 9.84 27.14 7.79 0.69 -157 -242 -86 -182 -127 -62 75.91 4.93 4.87
71 0.4529 31.18 9.91 31.92 12.57 0.71 -120 -219 -99 -163 -106 -39 65.51 4.74 4.67
72 0.5031 55.22 10.98 23.75 9.50 0.43 -164 -261 -97 -178 -116 -42 65.55 3.41 3.35
73 0.5153 31.42 17.63 25.19 5.74 0.50 119 221 102 1 95 206 -0.17 2.69 8.43
74 0.5280 25.10 15.76 27.14 8.89 0.81 88 126 38 -11 87 203 2.56 1.88 9.37
75 0.6374 41.80 11.07 37.33 4.96 1.00 -99 -142 -43 -222 -149 -63 69.71 2.93 2.85
76 0.6539 58.59 9.58 26.03 5.91 0.79 -95 -183 -88 -201 -131 -49 66.03 4.65 4.59
77 0.6897 36.21 11.18 24.91 11.23 0.70 -86 -170 -85 -185 -107 -15 54.51 2.64 2.59
78 0.7357 24.38 11.64 31.92 9.77 0.72 -77 -150 -73 -167 -74 35 41.30 NR NR
79 0.7680 44.80 7.36 37.33 4.39 0.98 -214 -214 0 -289 -222 -142 98.47 -61.24 -102.84
80 0.7742 60.25 8.23 28.52 4.30 0.86 -24 -122 -99 -193 -120 -34 60.64 -81.85 -122.41
81 0.7748 34.73 16.76 18.45 8.27 0.78 62 91 29 -55 61 196 10.87 3.91 9.00
82 0.8466 38.82 16.58 28.24 6.08 0.52 4 -18 -21 -96 19 154 19.23 1.20 10.76
83 0.8583 29.08 15.33 30.19 5.66 0.91 233 267 34 4 132 282 -0.79 0.89 7.58
84 0.8616 19.24 13.59 9.63 6.25 0.80 267 324 58 69 188 328 -13.37 6.00 8.57
85 0.9007 50.80 10.08 31.33 6.75 0.66 -128 -211 -83 -209 -125 -27 57.35 3.38 3.31
86 0.9062 26.42 11.15 34.75 5.32 0.98 -35 -55 -20 -192 -90 29 43.34 NR 3.40
293
and CO2 compression for the permeability classes k = 1 – 9.99 mD.
INPUTS OUTPUTS
Specific cost of
price = $0/t
3 3 2 2 2 2 2 2
Class # mD m /t m /t A$/t A$/GJ MW A$MM/100km A$MM/100km A$MM/100km A$M/100 km A$M/100 km A$M/100 km A$/t A$/GJ A$/GJ
87 1.01 51.84 9.11 31.92 2.89 0.73 -57 -153 -95 -192 -106 -4 51.02 -90.99 -161.46
88 1.05 27.26 18.44 7.04 6.92 0.81 455 659 204 77 257 468 -9.86 2.65 3.72
89 1.10 15.79 14.06 29.91 4.87 0.55 187 241 53 88 205 342 -17.20 1.09 6.21
90 1.16 27.65 12.57 18.05 8.57 0.97 121 89 -32 -107 24 177 18.83 8.10 21.39
91 1.22 69.42 5.66 26.86 3.77 0.47 -187 -187 0 -325 -236 -132 84.16 -42.29 -66.33
92 1.22 29.95 16.91 22.86 4.09 0.70 391 549 158 130 304 509 -17.15 0.60 4.14
93 1.30 19.76 5.33 34.42 4.49 0.73 -149 -149 0 -273 -172 -54 62.25 -20.28 -49.27
94 1.32 38.72 15.73 30.47 2.89 0.76 145 169 24 -58 91 266 8.95 0.77 8.60
95 1.42 24.67 14.47 22.86 4.78 0.91 224 245 21 24 187 379 -3.36 0.90 5.40
96 1.48 27.10 10.53 37.33 4.09 0.92 -14 -102 -89 -162 -29 126 28.11 2.20 4.25
97 1.48 34.20 11.26 21.29 10.23 0.89 -62 -108 -46 -187 -58 94 33.25 NR NR
98 1.49 24.19 11.09 15.83 6.00 0.51 102 9 -93 -143 -4 159 23.69 11.38 26.61
99 1.54 27.25 17.81 46.91 9.12 0.84 -18 43 61 -37 172 418 4.08 -0.57 3.53
100 1.74 33.15 5.14 25.47 9.12 0.50 -138 -138 0 -267 -173 -63 65.48 -35.82 -60.27
101 1.99 40.81 11.15 29.63 9.12 0.42 10 -83 -92 -175 -28 145 27.39 9.25 NR
102 2.08 19.75 15.44 18.45 4.30 0.93 403 644 241 172 348 554 -22.54 1.77 4.79
103 2.26 40.29 18.05 33.77 12.14 0.95 95 131 36 -144 100 385 13.58 0.22 5.89
104 2.28 49.88 9.33 16.77 11.49 0.85 -128 -225 -97 -218 -77 88 35.64 -91.24 -137.15
105 2.28 23.60 6.78 19.21 12.57 0.51 -20 -110 -90 -225 -97 52 40.56 6.59 6.55
106 2.51 36.76 17.23 33.77 7.61 0.60 516 1,027 511 234 489 787 -21.23 0.08 4.69
107 2.69 24.45 10.21 34.42 6.58 0.48 262 218 -43 -107 68 274 14.06 1.84 17.57
108 2.75 29.73 17.04 24.34 3.54 0.62 353 813 459 234 493 796 -20.80 0.49 4.02
109 2.77 25.26 10.49 26.59 9.50 0.88 109 22 -87 -140 42 257 17.63 1.67 14.11
k = 1 - 9.99 mD
110 2.87 31.63 10.43 22.25 9.37 0.75 241 200 -41 -99 91 315 11.96 1.73 16.81
111 3.16 55.16 9.12 25.75 8.27 0.82 -73 -113 -39 -284 -114 86 38.43 2.59 2.53
112 3.20 39.66 9.53 41.16 9.12 0.74 -122 -190 -67 -207 -24 193 25.97 68.22 2.53
113 3.81 30.17 14.87 19.93 9.77 0.98 201 197 -4 -83 186 501 7.10 0.60 4.10
114 4.08 28.72 9.73 19.93 7.17 0.82 315 263 -52 -123 92 344 13.18 2.34 15.32
115 4.27 40.90 14.17 28.52 9.63 0.77 466 760 293 228 508 836 -18.79 0.42 5.81
116 4.58 22.31 15.42 32.83 8.36 0.50 288 775 488 24 259 536 -2.32 0.53 7.95
117 5.59 25.55 17.78 33.77 11.23 0.43 493 1,881 1,388 12 315 670 -0.91 0.35 10.44
118 5.75 45.89 10.97 50.24 6.41 0.49 179 195 16 -105 170 494 8.80 -6.77 14.71
119 5.98 48.55 9.39 20.28 8.17 0.44 -30 -59 -29 -178 84 391 15.64 1.84 43.64
120 6.17 46.16 14.67 26.31 6.50 0.75 429 603 173 -13 327 727 0.91 0.21 6.05
121 6.23 28.06 15.74 27.97 3.16 0.73 622 1,295 674 176 485 849 -13.08 0.48 6.25
122 6.50 35.45 16.99 50.24 11.49 0.62 518 1,272 754 191 562 997 -11.85 -1.86 5.02
123 6.78 49.25 16.16 26.31 8.07 0.82 588 776 188 -116 266 714 7.00 0.03 6.63
124 6.82 38.66 9.78 26.86 7.70 0.73 -47 -132 -85 -190 96 431 15.30 1.27 12.65
125 7.33 26.86 15.93 26.86 2.08 0.82 166 320 154 -254 54 417 18.96 0.57 8.90
126 7.38 22.62 9.08 23.16 7.17 0.76 213 177 -36 -151 83 357 14.84 1.95 15.91
127 7.90 48.94 15.71 20.63 8.27 0.58 706 1,209 503 50 450 919 -2.90 0.49 6.77
128 7.94 26.88 13.51 42.41 6.92 0.65 22 177 155 -45 253 603 3.44 -0.73 6.15
129 7.95 50.73 7.79 12.26 5.91 0.48 214 116 -98 -249 36 371 20.07 NR NR
130 8.18 46.19 9.09 36.17 6.00 0.97 -14 -94 -80 -225 82 442 16.85 -4.35 26.54
131 8.54 37.60 16.04 30.47 6.66 0.65 737 1,337 600 187 595 1,073 -10.57 -0.38 4.74
132 9.17 34.19 15.09 48.34 8.57 0.49 626 678 52 -189 184 622 11.63 -2.01 5.52
133 9.55 41.73 8.55 36.93 10.58 0.84 509 460 -49 -167 155 532 11.94 -4.94 18.97
134 9.55 52.82 6.61 20.28 6.92 0.80 108 108 0 -373 -70 285 28.35 4.20 4.16
135 9.76 22.51 10.22 22.55 7.09 0.46 456 449 -7 -140 117 420 12.52 1.42 10.17
136 9.84 73.88 10.33 27.97 7.00 0.43 215 250 36 -271 82 497 17.64 -0.91 198.42
137 9.89 43.38 8.60 33.45 2.89 0.54 -84 -163 -80 -186 147 538 12.82 2.92 15.34
294
INPUTS OUTPUTS
Specific cost of
price = $0/t
3 3 2 2 2 2 2 2
138 10.03 63.63 8.07 36.54 6.33 0.67 276 221 -56 -262 73 467 17.98 177.36 NR
139 10.08 15.90 18.51 34.42 3.03 0.98 -1,185 408 1,593 -1,354 -1,143 -895 147.42 NR NR
140 10.50 50.41 12.35 28.52 3.42 0.86 489 733 243 65 466 937 -3.73 -0.71 8.19
141 10.75 36.42 10.97 22.55 13.15 0.42 451 575 123 142 499 917 -9.19 0.97 6.28
142 11.00 33.87 15.04 17.64 4.30 0.51 835 1,741 906 375 773 1,241 -21.62 0.92 5.67
143 11.02 47.53 8.35 34.75 7.98 0.62 209 130 -79 -224 125 536 14.77 -6.00 24.62
144 11.09 52.90 14.31 26.59 13.15 0.59 357 617 260 -74 371 894 3.81 -0.36 7.62
145 11.20 45.21 14.87 24.05 5.83 0.98 270 413 143 -151 297 823 7.76 0.21 6.23
146 11.78 32.72 18.28 42.41 7.17 0.85 212 556 344 -286 174 713 14.31 -0.65 7.33
147 12.41 41.57 15.94 8.47 11.79 0.75 372 886 514 7 472 1,019 -0.33 3.04 5.81
148 12.46 41.89 10.55 9.63 11.49 0.83 266 276 10 -62 331 791 3.61 3.09 7.06
149 12.65 39.67 9.76 27.41 4.59 0.72 428 356 -72 -208 167 606 12.76 -0.21 8.94
150 12.83 20.60 16.63 42.41 6.75 1.00 -570 456 1,025 -822 -526 -178 63.84 0.35 NR
151 13.56 35.08 6.71 17.64 8.27 0.85 359 264 -94 -211 116 500 14.85 3.42 24.96
152 13.74 37.23 9.30 43.12 8.17 1.00 475 446 -28 -112 257 691 6.97 -5.00 8.83
153 14.33 37.18 8.48 40.06 3.77 0.49 360 260 -100 -223 144 576 13.96 -5.34 9.84
154 14.47 36.88 5.98 19.21 9.77 0.86 275 210 -65 -226 105 495 15.69 4.74 69.67
155 14.57 39.12 5.16 41.16 4.19 0.53 -94 -94 0 -371 -39 351 25.72 -97.36 11.17
156 14.62 23.41 8.62 19.93 5.05 0.44 -162 -184 -21 -188 88 411 15.69 3.77 16.19
157 15.00 41.48 7.77 14.79 3.42 0.91 326 311 -15 -57 323 770 3.46 2.20 13.34
158 15.68 39.37 9.04 53.23 8.78 0.41 354 408 54 36 432 897 -2.07 -9.21 9.35
159 17.49 26.79 10.62 41.16 6.50 0.91 553 875 321 73 400 785 -5.09 -1.07 10.54
160 17.53 29.02 6.20 20.63 7.26 0.71 57 -27 -84 -218 99 472 15.82 3.88 29.05
161 17.59 68.25 8.34 16.31 11.49 0.70 392 360 -33 -267 204 756 13.05 1.79 57.40
162 19.11 49.19 7.36 20.28 4.30 0.45 500 484 -16 -139 300 816 7.27 1.62 20.29
k = 10 - 39.99 mD
163 19.43 66.62 12.38 27.41 5.14 0.81 127 185 58 -266 288 939 11.04 -1.76 12.55
164 20.01 30.43 10.56 14.22 10.58 0.43 554 732 179 -66 303 736 4.11 4.46 10.10
165 21.06 24.89 17.51 27.69 7.79 0.60 -869 1,464 2,333 -1,187 -798 -342 70.19 NR NR
166 21.16 41.49 7.77 28.24 6.92 0.47 433 462 29 -42 387 890 2.23 -1.59 13.83
167 21.39 33.56 13.96 32.83 6.75 0.58 177 318 141 -332 113 636 17.16 0.10 9.22
168 21.84 36.74 10.18 27.69 7.17 0.72 491 789 298 261 693 1,199 -13.91 -0.17 7.75
169 22.52 52.25 5.65 14.79 7.17 0.68 279 180 -99 -316 137 670 16.03 48.77 507.66
170 22.59 31.30 11.99 17.64 2.43 0.59 532 1,252 720 244 650 1,127 -13.79 2.91 9.16
171 23.37 22.78 14.73 36.93 5.32 0.83 -764 529 1,293 -1,124 -806 -432 81.28 NR 0.30
172 23.55 28.63 3.59 24.91 8.36 0.46 -95 -95 0 -415 -97 277 29.99 -7.20 -76.74
173 23.61 52.79 11.56 43.12 5.49 0.51 347 445 98 -186 365 1,012 7.76 -5.28 8.93
174 24.42 60.01 11.63 26.03 7.88 0.71 1,219 1,408 189 -127 454 1,137 5.02 -1.62 9.91
175 24.59 43.43 9.60 15.83 8.17 0.94 642 654 12 -185 296 860 8.86 1.55 9.69
176 24.70 36.57 8.70 35.80 7.61 1.00 323 255 -68 -279 143 638 15.22 -2.70 10.97
177 25.05 37.71 13.76 30.76 7.17 1.00 662 1,299 637 53 554 1,142 -2.45 -0.39 7.30
178 25.21 16.68 12.00 19.21 10.40 0.67 -149 -48 101 -567 -282 52 45.79 NR 0.50
179 26.06 59.09 6.19 24.62 7.00 1.00 -16 -65 -48 -333 179 781 14.95 -9.12 233.03
180 27.00 41.05 5.50 36.93 7.00 0.87 317 264 -53 -213 223 734 11.24 -16.65 37.30
181 27.16 30.83 13.47 27.41 8.78 0.73 331 1,347 1,017 -280 128 607 15.77 2.93 23.80
182 27.21 47.70 10.22 17.64 9.24 0.94 900 1,123 223 114 654 1,289 -4.84 0.91 7.61
183 27.81 38.18 12.79 42.41 12.14 0.91 474 1,177 703 134 628 1,208 -6.25 -2.24 8.18
184 33.43 51.30 15.21 13.62 3.42 0.70 802 1,804 1,002 -117 527 1,282 4.17 3.03 10.87
185 34.15 28.96 5.86 24.91 9.12 0.87 290 207 -82 -361 -3 418 23.18 4.19 113.66
186 34.72 35.48 3.45 23.75 13.15 0.97 5 5 0 -481 -77 398 27.38 -7.04 -75.57
187 35.52 33.05 5.01 43.12 3.16 0.58 488 411 -77 -289 118 596 16.34 -21.74 46.59
188 35.68 23.36 10.37 18.45 12.14 0.66 17 151 134 -570 -237 154 39.39 243.62 453.73
189 36.26 32.17 13.24 13.62 6.66 0.83 600 1,355 755 -290 176 724 14.31 9.07 16.79
190 37.61 23.46 4.76 23.75 9.77 0.46 -211 -211 0 -460 -143 229 33.36 6.62 NR
191 38.76 69.54 11.81 24.34 4.59 0.84 969 1,511 542 -78 649 1,502 2.48 -1.83 12.65
192 39.70 34.85 17.81 39.07 8.36 0.63 194 1,570 1,377 -528 43 714 21.27 -0.10 28.38
193 39.75 43.82 10.98 33.13 3.65 0.48 553 620 68 -340 216 868 14.08 -1.46 11.02
194 39.81 37.56 8.30 32.22 11.23 0.40 187 164 -23 -303 184 756 14.33 -1.41 12.53
295
INPUTS OUTPUTS
Specific cost of
price = $0/t
Class # mD m 3/t m 3/t A$/t A$/GJ MW A$MM/100km 2 A$MM/100km 2 A$MM/100km 2 A$M/100 km2 A$M/100 km 2 A$M/100 km 2 A$/t A$/GJ A$/GJ
195 41.70 59.06 9.03 24.05 3.77 0.82 561 614 53 -240 419 1,192 8.38 -2.00 13.60
196 43.20 41.13 5.42 40.06 4.87 0.91 509 457 -52 -277 218 799 12.88 -19.42 36.55
197 46.51 41.26 5.91 15.32 5.49 0.52 99 32 -67 -266 248 852 11.89 3.21 19.95
198 46.66 24.82 10.17 18.45 2.59 0.76 -415 -208 207 -615 -240 201 37.68 45.58 83.46
199 50.39 28.94 13.13 11.49 5.23 0.40 384 1,405 1,021 -512 -26 545 24.23 19.19 27.67
200 51.13 55.32 13.39 25.47 6.50 0.43 1,022 1,828 805 -178 554 1,412 5.59 -0.45 12.55
201 55.61 36.29 14.20 42.41 3.03 0.40 303 644 340 -497 107 816 18.92 -1.18 12.59
202 56.97 51.05 9.28 43.89 8.17 0.61 361 604 243 -76 579 1,349 2.68 -7.80 11.18
203 61.56 49.91 5.64 44.76 3.77 0.69 488 416 -72 -324 306 1,046 11.82 -24.06 23.07
k = 40 - 99.99 mD
204 62.30 62.57 16.32 26.03 5.74 0.91 836 2,038 1,202 -313 546 1,555 8.37 -0.64 15.19
205 63.38 59.56 9.48 39.07 4.19 0.85 667 923 256 -250 504 1,389 7.63 -7.59 16.17
206 64.51 30.68 9.65 32.83 7.00 0.41 367 527 160 -368 128 711 17.06 0.50 13.77
207 64.65 24.34 16.11 17.64 4.19 0.71 -631 -339 292 -1,267 -850 -360 69.89 NR NR
208 64.81 33.39 11.41 38.17 6.50 0.98 12 259 248 -414 141 792 17.16 -0.74 12.23
209 70.91 28.80 13.25 17.21 4.09 0.63 -416 154 570 -965 -495 57 47.19 NR 0.26
210 71.58 23.97 6.74 20.63 3.99 0.91 -10 11 21 -648 -291 127 41.82 1.59 1.55
211 78.45 55.81 8.82 29.63 5.91 0.60 609 666 57 -356 408 1,304 10.72 -3.75 13.52
212 78.78 34.12 8.83 32.83 6.41 0.79 -305 -218 87 -544 -27 579 24.20 0.78 26.77
213 79.06 37.40 6.30 37.74 4.49 0.46 270 230 -40 -421 126 768 17.72 -5.04 22.14
214 79.43 30.58 14.65 36.17 5.14 0.88 -902 -204 697 -1,101 -559 77 46.73 NR 0.33
215 79.92 41.18 7.94 36.93 4.39 0.57 156 186 30 -405 201 913 15.38 -3.52 15.91
216 85.44 48.20 3.84 18.45 6.00 0.81 468 468 0 -617 14 755 22.48 -513.92 -2,902.48
217 88.48 44.67 14.54 33.45 10.78 0.86 518 1,423 905 -516 215 1,074 16.23 -0.43 19.47
218 91.73 70.93 12.33 27.14 5.32 0.51 1,400 1,920 521 -517 423 1,526 12.66 -2.00 26.92
219 97.43 38.45 17.33 29.63 9.77 0.43 -568 550 1,117 -1,277 -629 131 45.34 NR 0.30
296
INPUTS OUTPUTS
Specific cost of
price = $0/t
3 3 2 2 2 2 2 2
220 105.49 19.75 13.27 38.17 3.77 0.85 -829 -457 372 -1,446 -928 -321 64.25 NR NR
221 108.26 42.11 1.95 29.35 10.23 0.54 -385 -385 0 -776 -207 460 31.39 8.13 -20.64
222 110.45 25.43 13.94 22.25 8.89 0.82 -915 -659 257 -1,302 -864 -350 68.40 0.26 NR
223 113.20 33.97 2.34 18.45 2.26 0.91 -415 -415 0 -709 -234 323 34.36 -8.29 -24.96
224 114.06 50.22 7.45 34.75 6.33 0.81 794 804 11 -484 240 1,090 15.37 -6.11 22.54
225 114.98 21.54 14.88 36.17 13.15 0.93 -1,343 104 1,447 -2,065 -1,459 -748 78.42 NR NR
226 120.17 33.83 12.36 37.33 8.78 0.82 -642 -532 110 -982 -432 214 41.07 NR 0.26
227 128.26 51.47 10.97 24.34 7.70 0.49 456 1,356 899 -321 494 1,451 9.05 0.34 19.19
228 129.22 22.30 3.72 25.19 10.78 0.99 -484 -484 0 -636 -332 26 48.06 -16.74 -38.51
229 140.59 35.03 8.53 27.69 5.23 0.68 409 614 205 -705 -121 564 27.78 6.51 61.18
230 141.25 65.86 13.39 21.93 3.03 0.70 258 511 253 -709 305 1,497 16.08 0.04 28.68
231 150.12 43.97 8.09 14.22 3.65 0.91 446 558 112 -649 40 850 21.65 16.39 37.60
232 152.39 59.65 11.10 25.19 4.87 0.82 -279 -98 182 -804 82 1,122 20.87 0.37 51.71
233 156.78 51.89 14.43 27.14 5.57 0.56 822 1,726 904 -1,032 -231 709 29.63 NR 0.47
234 169.47 21.63 15.15 48.34 3.03 0.81 -1,594 -208 1,385 -2,637 -1,812 -842 73.45 NR 0.20
235 178.79 22.41 7.57 8.47 7.88 0.57 -823 -584 239 -1,191 -858 -468 82.41 0.64 0.62
236 195.54 28.00 12.72 19.93 4.96 0.60 -1,132 -145 987 -1,798 -1,291 -695 81.51 NR 0.21
237 197.19 28.33 2.59 25.47 9.92 0.57 76 76 0 -839 -390 136 43.01 -5.41 -26.89
238 206.64 61.53 15.49 16.31 7.79 0.62 1,084 2,160 1,076 -894 178 1,437 19.18 13.07 53.76
239 224.04 34.15 13.29 29.35 6.66 0.66 -156 169 325 -1,402 -618 303 41.13 35.38 116.31
240 224.53 31.15 10.18 20.96 8.36 0.84 -309 499 809 -1,238 -587 177 43.75 NR NR
241 225.10 29.03 8.19 17.64 6.08 0.72 -599 167 766 -1,136 -565 106 45.75 NR NR
242 240.02 26.12 13.17 38.17 7.00 0.67 -1,734 293 2,027 -2,314 -1,697 -973 86.29 0.28 0.19
243 263.41 34.77 7.64 31.92 6.66 0.81 -634 -180 453 -1,277 -676 29 48.88 0.59 0.52
244 284.01 42.97 16.59 31.04 6.16 0.40 -732 533 1,265 -1,677 -700 446 39.50 6.88 6.38
245 285.76 46.48 13.83 41.16 5.32 0.70 -742 72 815 -1,342 -496 497 36.49 10.00 NR
246 292.30 46.66 5.46 31.33 7.70 0.46 -40 -96 -55 -973 -242 616 30.62 4.35 1.23
247 303.16 25.63 10.61 43.12 3.88 1.00 -1,329 -719 609 -1,794 -1,247 -605 75.47 NR 0.24
k = 100 - 999.99 mD
248 306.66 45.69 7.51 24.91 3.99 0.52 406 539 133 -1,055 -250 695 30.15 31.57 157.92
249 310.46 25.89 14.89 43.89 7.52 0.55 -1,653 1,766 3,419 -2,987 -2,096 -1,050 77.08 0.27 NR
250 312.36 42.30 17.17 24.34 7.43 0.75 -854 1,168 2,022 -2,153 -1,417 -553 67.31 NR 0.20
251 326.54 65.06 8.86 22.25 10.58 0.46 219 383 164 -1,001 65 1,317 21.59 0.41 169.13
252 337.50 31.07 15.11 26.03 9.63 0.60 -1,011 1,308 2,319 -2,479 -1,696 -777 72.83 NR NR
253 360.27 44.83 1.65 19.93 7.98 0.89 -490 -490 0 -1,055 -300 585 32.16 -7.71 -33.76
254 366.52 77.30 14.50 23.75 3.29 0.69 982 2,111 1,129 -1,198 145 1,723 20.51 62.79 0.91
255 373.13 57.31 12.99 40.06 7.79 0.64 -41 250 291 -1,379 -278 1,013 28.82 -1.61 318.46
256 373.56 24.11 4.16 16.77 8.27 0.50 -414 -466 -52 -977 -457 154 43.20 -227.11 -363.20
257 389.65 41.47 12.35 17.64 5.40 0.51 36 621 584 -1,397 -476 605 34.89 162.40 323.80
258 389.78 24.22 9.89 24.62 3.03 0.94 -1,563 -588 974 -1,977 -1,375 -667 75.48 NR NR
259 397.84 25.65 7.06 28.52 10.23 0.71 -695 -185 510 -1,579 -1,116 -572 78.43 NR NR
260 398.95 63.49 12.30 22.25 4.39 0.69 129 872 744 -1,277 -154 1,164 26.16 NR 1.22
261 405.34 63.35 18.62 18.45 10.40 0.60 -956 647 1,604 -1,739 -602 734 35.17 NR 0.29
262 407.80 31.90 10.08 36.17 6.58 0.88 -1,668 -165 1,503 -2,413 -1,835 -1,155 95.91 0.32 NR
263 432.89 39.31 13.57 9.63 5.05 0.93 -1,466 -493 972 -2,096 -1,381 -542 67.46 NR NR
264 452.50 32.05 14.68 31.04 5.49 0.81 -1,068 -336 733 -2,103 -1,235 -216 55.73 NR NR
265 479.39 20.15 10.31 48.34 3.16 0.42 -415 -108 307 -2,737 -1,734 -556 62.75 0.31 0.21
266 486.66 35.03 9.37 40.59 12.14 0.45 -1,467 -203 1,263 -2,425 -1,828 -1,128 93.45 NR NR
267 495.25 31.53 12.21 30.76 7.88 0.77 -1,355 89 1,445 -2,217 -1,464 -579 67.68 NR NR
268 500.86 31.78 12.13 7.04 8.67 0.54 -1,139 -128 1,011 -2,128 -1,381 -505 65.55 NR 0.18
269 513.37 54.08 8.85 34.42 7.79 0.67 147 416 269 -1,617 -730 311 41.94 NR NR
270 514.48 29.63 6.84 38.61 6.83 0.83 -824 -372 452 -1,797 -1,278 -669 79.63 0.54 0.46
271 576.20 37.80 8.94 30.47 10.58 0.81 -1,311 -915 397 -1,839 -1,207 -466 66.98 NR NR
272 642.84 32.70 6.57 23.46 9.77 0.62 -1,090 -877 213 -1,696 -1,123 -451 68.09 -380.83 -631.04
273 694.85 32.10 4.23 22.55 9.37 0.60 -1,234 -1,127 107 -1,639 -1,123 -517 73.04 -30.36 -51.49
274 761.17 30.27 14.03 14.79 7.79 0.83 -1,412 -504 908 -2,869 -1,683 -289 55.62 0.21 0.17
275 765.98 48.26 7.79 37.74 5.66 0.62 -464 -46 418 -1,689 -691 480 38.93 4.18 0.35
276 778.22 32.26 7.14 41.76 11.23 0.60 -839 -714 125 -1,791 -1,149 -394 64.12 NR NR
277 813.99 30.34 12.96 48.34 11.49 0.62 -1,668 -373 1,295 -3,062 -1,959 -665 63.87 0.30 NR
278 844.59 54.08 8.49 29.07 5.49 0.85 -197 736 932 -2,022 -934 342 42.77 0.34 0.36
279 874.13 33.15 11.10 41.16 7.98 0.41 -769 464 1,234 -2,581 -1,670 -601 65.18 NR NR
280 967.40 15.78 7.28 19.93 2.89 0.90 -4,707 -4,153 554 -5,710 -3,829 -1,620 69.80 -53.93 -82.49
281 984.60 60.61 10.47 35.45 2.26 0.52 -165 225 390 -2,186 -928 550 39.95 NR 0.20
282 986.86 34.12 14.43 18.45 8.36 0.66 -1,775 -1,319 455 -3,062 -1,784 -283 55.10 0.23 0.18
283 998.91 44.61 4.39 41.76 7.52 0.70 160 263 103 -1,841 -889 229 44.48 4.19 0.96
297
A 7: CO2 injected, gas recovery, and project life as a function of CO2 Langmuir volume, gas content, CO2 price, gas price, and CO2 compression for the permeability
classes k = 0.001 – 0.0099 mD and k = 0.01 – 0.099 mD.
INPUTS OUTPUTS
RESERVOIR PROPERTIES ECONOMIC PARAMETERS CO2 INJECTED CH4 RECOVERY PROEJCT LIFE
Langmuir CH4 gas CO2 Gas CO2 compressor Cum CO2 Average CO2 Primary Enhanced Incremental Project life
Permeability Gas in Place Project life CBM
volume CO2 content price price power factor injected injected recovery recovery recovery Storage-ICBM
Class # mD m3/t m3/t A$/t A$/GJ MW Mt Mt/yr MMm3 MMm 3 MMm3 MMm3 years years
1 0.0013 50.16 15.59 35.80 11.23 0.96 0.74 0.01 14,187 0 83 83 0 57
2 0.0014 33.93 9.10 42.41 5.57 0.46 0.66 0.01 8,278 0 29 29 0 9
3 0.0015 47.30 17.23 23.46 7.52 0.97 0.69 0.01 15,681 31 113 82 2 57
4 0.0016 23.40 15.11 26.03 3.29 0.56 0.64 0.01 13,748 0 98 98 0 32
k = 0.001 - 0.0099 mD
5 0.0018 43.32 5.30 38.61 2.74 0.82 0.75 0.01 4,825 0 9 9 0 57

6 0.0022 34.37 9.67 31.33 6.41 0.59 0.99 0.02 8,802 0 34 34 0 24
7 0.0025 59.75 16.07 33.45 9.50 0.89 1.03 0.02 14,620 18 100 82 1 8
8 0.0026 40.17 2.95 23.46 8.36 0.62 0.82 0.02 2,680 0 0 0 0 9
9 0.0035 55.80 10.65 21.61 6.75 0.49 1.25 0.02 9,691 0 43 43 0 29
10 0.0045 19.44 16.49 42.41 2.59 0.75 0.65 0.01 15,008 0 169 169 0 57
11 0.0049 67.15 9.55 20.63 3.54 0.63 1.23 0.02 8,695 0 38 38 0 32
12 0.0052 49.87 15.09 33.45 6.16 0.89 1.38 0.03 13,730 18 105 87 1 8
13 0.0058 49.16 6.66 29.07 2.59 0.73 1.19 0.02 6,056 0 19 19 0 12
14 0.0083 34.79 5.62 30.47 11.23 0.55 1.27 0.02 5,118 0 13 13 0 7
15 0.0090 30.63 14.63 37.33 8.67 0.67 1.44 0.03 13,315 37 129 92 3 50
16 0.0097 44.71 9.55 29.63 3.88 0.93 1.58 0.03 8,688 0 43 43 0 30
17 0.0098 31.34 15.96 23.75 5.40 0.74 1.45 0.03 14,528 26 166 140 1 11
18 0.0105 25.54 3.70 30.47 8.89 0.95 1.15 0.02 3,369 0 4 4 0 17
19 0.0111 63.41 11.48 23.75 2.89 0.90 2.01 0.04 10,445 0 66 66 0 16
20 0.0122 23.25 16.67 26.59 5.05 0.88 1.37 0.03 15,167 124 239 115 10 18
21 0.0178 27.25 13.07 19.93 3.16 0.40 1.98 0.04 11,889 15 120 105 1 7
22 0.0197 32.32 8.39 14.22 14.05 0.85 1.87 0.04 7,639 0 39 39 0 19
23 0.0215 60.83 14.27 43.12 9.92 0.75 2.64 0.05 12,982 31 136 106 2 57
24 0.0230 38.21 18.56 35.80 9.92 0.61 2.03 0.04 16,887 230 304 74 15 36
25 0.0246 43.57 8.99 32.52 2.59 0.45 2.41 0.05 8,184 0 50 50 0 57
26 0.0262 26.64 10.98 36.17 2.08 0.63 2.24 0.04 9,990 0 88 88 0 57
27 0.0276 65.97 12.59 29.07 7.79 0.81 2.97 0.06 11,458 28 108 80 3 21
k = 0.01 - 0.099 mD
28 0.0285 47.92 11.26 26.86 14.05 0.73 2.73 0.05 10,244 8 87 78 1 12

29 0.0295 34.17 18.19 15.83 8.89 1.00 2.52 0.05 16,548 249 309 60 15 7
30 0.0301 18.56 17.21 19.21 12.57 0.91 2.47 0.05 15,657 393 309 -84 33 20
31 0.0330 35.87 11.81 24.05 8.89 0.62 2.80 0.05 10,750 0 104 104 0 12
32 0.0338 36.55 3.81 28.79 5.32 0.40 2.08 0.04 3,470 0 6 6 0 8
33 0.0351 36.55 10.05 23.75 5.74 0.66 2.78 0.05 9,147 11 74 62 1 10
34 0.0377 20.98 9.98 24.34 7.17 0.54 2.79 0.05 9,081 0 73 73 0 8
35 0.0408 18.31 10.12 27.41 5.83 0.96 3.11 0.06 9,207 13 71 59 1 16
36 0.0409 53.99 16.91 36.54 10.07 0.49 3.39 0.07 15,385 96 252 155 4 7
37 0.0433 30.24 15.17 25.47 3.54 0.76 3.54 0.07 13,808 109 220 110 7 9
38 0.0459 52.23 11.34 38.17 9.92 0.88 3.49 0.07 10,315 0 101 101 0 57
39 0.0459 14.81 12.91 23.75 5.32 0.98 3.70 0.07 11,746 18 127 109 1 13
40 0.0493 29.09 11.51 26.03 4.68 0.97 3.37 0.06 10,473 28 114 85 3 57
41 0.0510 16.61 14.95 43.12 7.17 0.78 4.11 0.08 13,603 195 207 12 15 57
42 0.0729 40.02 6.02 36.93 9.50 0.52 3.41 0.07 5,475 0 26 26 0 57
43 0.0767 20.00 7.50 41.16 3.88 0.63 3.85 0.07 6,822 0 40 40 0 57
44 0.0770 38.60 10.23 35.45 5.74 0.77 4.09 0.08 9,312 22 96 73 3 57
45 0.0804 30.45 9.71 41.16 7.09 0.68 4.09 0.08 8,839 0 86 86 0 8
298
classes k = 0.1 – 0.99 mD.
INPUTS OUTPUTS
Class # mD m 3/t m3/t A$/t A$/GJ MW Mt Mt/yr MMm 3 MMm 3 MMm 3 MMm 3 years years
46 0.1207 33.16 8.31 27.69 10.58 0.49 4.77 0.09 7,561 0 67 67 0 57
47 0.1230 38.50 11.51 25.47 6.41 0.58 5.68 0.11 10,475 0 145 145 0 57
48 0.1239 17.23 8.83 19.21 6.92 0.95 6.56 0.13 8,036 0 55 55 0 57
49 0.1265 48.60 11.25 27.14 6.50 0.99 5.71 0.11 10,238 75 139 64 9 57
50 0.1301 57.04 17.78 34.75 12.57 0.59 6.29 0.12 16,183 151 1,082 931 3 14
51 0.1401 32.62 11.81 35.10 7.61 0.92 6.39 0.12 10,747 45 160 114 3 13
52 0.1554 25.85 15.28 43.89 4.49 0.95 8.84 0.17 13,903 54 938 884 1 57
53 0.1758 36.60 11.03 33.45 8.47 0.84 6.88 0.13 10,040 40 144 104 3 57
54 0.2149 55.11 7.16 20.96 7.61 0.74 6.59 0.13 6,515 0 57 57 0 15
55 0.2224 29.64 10.66 22.86 12.57 0.80 8.10 0.16 9,702 42 141 99 3 40
56 0.2289 48.95 9.04 35.10 3.77 0.68 7.22 0.14 8,228 0 100 100 0 57
57 0.2628 37.09 18.62 9.63 10.07 0.97 12.80 0.25 16,947 2,494 4,787 2,293 57 57
58 0.2653 51.28 11.39 21.61 5.57 0.92 8.60 0.17 10,367 98 174 75 8 11
59 0.2785 19.89 8.10 35.80 2.59 0.56 9.85 0.19 7,371 0 56 56 0 8
60 0.2854 32.62 10.83 32.52 7.43 0.89 9.41 0.18 9,855 178 153 -25 21 8
61 0.2924 16.71 16.29 37.74 9.01 0.93 13.81 0.36 14,821 1,511 6,016 4,506 57 9
62 0.3183 34.10 9.98 34.75 7.79 0.77 9.41 0.18 9,081 27 130 103 2 22
k = 0.1 - 0.99 mD
63 0.3363 18.98 18.57 39.55 6.33 0.83 17.03 0.55 16,897 3,960 8,828 4,868 57 15
64 0.3499 35.11 15.63 18.05 12.57 0.93 13.87 0.27 14,221 735 2,739 2,004 32 17
65 0.3550 39.12 15.36 32.52 4.19 0.97 12.99 0.25 13,973 574 2,085 1,511 25 12
66 0.3723 52.63 10.90 31.63 2.89 1.00 10.26 0.20 9,923 51 172 121 3 13
67 0.3836 33.99 5.16 9.63 8.17 0.43 7.60 0.15 4,698 0 24 24 0 57
68 0.3993 34.63 11.24 15.83 4.87 0.60 11.83 0.23 10,232 0 209 209 0 57
69 0.4005 43.25 11.62 27.14 5.23 0.45 11.41 0.22 10,575 66 212 147 3 57
70 0.4400 33.78 9.84 27.14 7.79 0.69 11.51 0.22 8,957 96 133 37 9 25
71 0.4529 31.18 9.91 31.92 12.57 0.71 12.08 0.23 9,015 32 136 103 2 9
72 0.5031 55.22 10.98 23.75 9.50 0.43 12.27 0.24 9,995 60 193 133 3 57
73 0.5153 31.42 17.63 25.19 5.74 0.50 24.10 0.46 16,042 3,196 8,686 5,490 57 10
74 0.5280 25.10 15.76 27.14 8.89 0.81 24.60 0.47 14,338 1,911 8,680 6,770 57 17
75 0.6374 41.80 11.07 37.33 4.96 1.00 14.95 0.29 10,070 487 402 -85 57 10
76 0.6539 58.59 9.58 26.03 5.91 0.79 13.53 0.26 8,718 83 148 65 7 57
77 0.6897 36.21 11.18 24.91 11.23 0.70 16.60 0.32 10,176 177 712 535 10 57
78 0.7357 24.38 11.64 31.92 9.77 0.72 20.75 0.40 10,595 381 3,573 3,192 21 57
79 0.7680 44.80 7.36 37.33 4.39 0.98 13.49 0.26 6,698 0 78 78 0 10
80 0.7742 60.25 8.23 28.52 4.30 0.86 14.21 0.27 7,486 22 111 89 2 57
81 0.7748 34.73 16.76 18.45 8.27 0.78 27.85 0.54 15,254 3,076 8,729 5,652 57 57
82 0.8466 38.82 16.58 28.24 6.08 0.52 26.54 0.51 15,091 2,945 7,613 4,668 57 8
83 0.8583 29.08 15.33 30.19 5.66 0.91 30.82 0.59 13,951 2,230 9,524 7,294 57 57
84 0.8616 19.24 13.59 9.63 6.25 0.80 17.50 0.73 12,369 1,443 4,825 3,382 57 10
85 0.9007 50.80 10.08 31.33 6.75 0.66 16.99 0.33 9,169 151 323 172 11 36
86 0.9062 26.42 11.15 34.75 5.32 0.98 22.44 0.43 10,149 705 3,413 2,708 57 30
299
classes k = 1 – 9.99 mD.
INPUTS OUTPUTS
Class # mD m 3/t m3/t A$/t A$/GJ MW Mt Mt/yr MMm 3 MMm 3 MMm 3 MMm3 years years
87 1.01 51.84 9.11 31.92 2.89 0.73 17.35 0.33 8,287 59 198 139 4 57
88 1.05 27.26 18.44 7.04 6.92 0.81 28.33 1.18 16,783 6,668 11,268 4,600 57 11
89 1.10 15.79 14.06 29.91 4.87 0.55 14.02 1.00 12,797 2,036 4,301 2,265 57 8
90 1.16 27.65 12.57 18.05 8.57 0.97 29.05 0.58 11,436 1,174 6,871 5,697 57 57
91 1.22 69.42 5.66 26.86 3.77 0.47 17.20 0.33 5,147 0 47 47 0 15
92 1.22 29.95 16.91 22.86 4.09 0.70 32.67 0.96 15,388 4,737 11,160 6,422 57 8
93 1.30 19.76 5.33 34.42 4.49 0.73 22.16 0.43 4,846 0 435 435 0 7
94 1.32 38.72 15.73 30.47 2.89 0.76 34.61 0.67 14,314 3,130 9,267 6,137 57 27
95 1.42 24.67 14.47 22.86 4.78 0.91 24.89 1.00 13,168 2,801 7,429 4,628 57 7
96 1.48 27.10 10.53 37.33 4.09 0.92 28.63 0.57 9,584 213 5,089 4,876 9 57
97 1.48 34.20 11.26 21.29 10.23 0.89 28.56 0.55 10,245 859 4,306 3,448 57 37
98 1.49 24.19 11.09 15.83 6.00 0.51 24.43 0.68 10,096 194 4,634 4,440 6 12
99 1.54 27.25 17.81 46.91 9.12 0.84 28.88 1.52 16,204 6,902 10,826 3,924 57 10
100 1.74 33.15 5.14 25.47 9.12 0.50 19.77 0.38 4,674 0 25 25 0 25
101 1.99 40.81 11.15 29.63 9.12 0.42 32.12 0.62 10,149 195 4,312 4,118 6 23
102 2.08 19.75 15.44 18.45 4.30 0.93 19.09 1.91 14,053 5,033 6,342 1,308 57 57
103 2.26 40.29 18.05 33.77 12.14 0.95 49.07 1.23 16,425 7,166 14,085 6,919 57 9
104 2.28 49.88 9.33 16.77 11.49 0.85 29.93 0.58 8,494 73 1,663 1,590 3 14
105 2.28 23.60 6.78 19.21 12.57 0.51 25.42 0.56 6,170 71 1,707 1,636 8 41
106 2.51 36.76 17.23 33.77 7.61 0.60 43.80 1.41 15,675 6,628 12,887 6,259 57 35
107 2.69 24.45 10.21 34.42 6.58 0.48 25.44 1.02 9,289 1,039 4,120 3,081 57 10
108 2.75 29.73 17.04 24.34 3.54 0.62 32.52 2.03 15,503 7,193 10,694 3,501 57 7
109 2.77 25.26 10.49 26.59 9.50 0.88 26.49 1.06 9,548 331 4,539 4,208 11 7
k = 1 - 9.99 mD
110 2.87 31.63 10.43 22.25 9.37 0.75 35.63 0.89 9,489 1,053 6,221 5,167 57 57
111 3.16 55.16 9.12 25.75 8.27 0.82 36.14 0.70 8,301 640 2,253 1,613 57 37
112 3.20 39.66 9.53 41.16 9.12 0.74 40.42 0.78 8,673 786 5,234 4,448 35 12
113 3.81 30.17 14.87 19.93 9.77 0.98 34.15 2.01 13,527 5,277 9,512 4,235 57 57
114 4.08 28.72 9.73 19.93 7.17 0.82 31.90 1.23 8,855 1,106 4,974 3,868 57 10
115 4.27 40.90 14.17 28.52 9.63 0.77 50.21 1.43 12,891 4,260 11,068 6,808 57 7
116 4.58 22.31 15.42 32.83 8.36 0.50 23.43 3.35 14,029 7,168 6,887 -281 57 36
117 5.59 25.55 17.78 33.77 11.23 0.43 29.02 4.84 16,178 10,537 9,755 -782 57 22
118 5.75 45.89 10.97 50.24 6.41 0.49 57.36 1.25 9,986 1,973 8,757 6,784 57 57
119 5.98 48.55 9.39 20.28 8.17 0.44 57.76 1.11 8,548 1,127 7,128 6,001 57 19
120 6.17 46.16 14.67 26.31 6.50 0.75 58.09 1.82 13,354 5,500 11,888 6,388 57 57
121 6.23 28.06 15.74 27.97 3.16 0.73 32.56 3.62 14,322 7,784 9,457 1,673 57 16
122 6.50 35.45 16.99 50.24 11.49 0.62 42.85 3.30 15,460 8,797 12,165 3,368 57 7
123 6.78 49.25 16.16 26.31 8.07 0.82 64.12 2.07 14,706 7,261 13,440 6,178 57 7
124 6.82 38.66 9.78 26.86 7.70 0.73 46.72 1.51 8,900 1,534 6,888 5,354 32 57
125 7.33 26.86 15.93 26.86 2.08 0.82 30.75 4.39 14,492 8,538 8,851 313 57 8
126 7.38 22.62 9.08 23.16 7.17 0.76 25.09 2.28 8,260 1,466 3,138 1,673 57 15
127 7.90 48.94 15.71 20.63 8.27 0.58 62.37 2.31 14,297 7,113 12,824 5,710 57 51
128 7.94 26.88 13.51 42.41 6.92 0.65 31.19 3.47 12,291 5,678 7,589 1,911 57 57
129 7.95 50.73 7.79 12.26 5.91 0.48 63.18 1.22 7,086 74 6,169 6,095 3 45
130 8.18 46.19 9.09 36.17 6.00 0.97 58.11 1.45 8,272 1,303 7,125 5,821 42 8
131 8.54 37.60 16.04 30.47 6.66 0.65 47.99 3.43 14,596 8,134 12,227 4,093 57 18
132 9.17 34.19 15.09 48.34 8.57 0.49 40.77 3.71 13,732 7,374 10,171 2,797 57 57
133 9.55 41.73 8.55 36.93 10.58 0.84 52.54 1.69 7,784 1,213 6,408 5,195 57 57
134 9.55 52.82 6.61 20.28 6.92 0.80 66.71 1.28 6,018 0 5,277 5,277 0 40
135 9.76 22.51 10.22 22.55 7.09 0.46 25.76 3.22 9,300 2,761 4,023 1,262 57 22
136 9.84 73.88 10.33 27.97 7.00 0.43 79.27 1.52 9,397 2,168 7,620 5,453 57 9
137 9.89 43.38 8.60 33.45 2.89 0.54 54.82 1.71 7,824 1,260 6,535 5,275 46 57
300
classes k = 10 – 39.99 mD.
INPUTS OUTPUTS
volume CO2 content price price pow er factor injected injected recovery recovery recovery Storage-ICBM
Class # mD m 3/t m 3/t A$/t A$/GJ MW Mt Mt/yr MMm 3 MMm 3 MMm 3 MMm 3 years years
138 10.03 63.63 8.07 36.54 6.33 0.67 73.80 1.42 7,345 960 6,054 5,093 57 45
139 10.08 15.90 18.51 34.42 3.03 0.98 18.22 9.11 16,843 12,922 5,123 -7,799 57 57
140 10.50 50.41 12.35 28.52 3.42 0.86 65.46 2.18 11,239 4,170 10,328 6,158 57 57
141 10.75 36.42 10.97 22.55 13.15 0.42 44.40 2.61 9,982 3,184 7,598 4,414 57 7
142 11.00 33.87 15.04 17.64 4.30 0.51 42.62 4.26 13,682 7,720 10,599 2,879 57 7
143 11.02 47.53 8.35 34.75 7.98 0.62 60.93 1.74 7,595 1,216 6,638 5,421 51 7
144 11.09 52.90 14.31 26.59 13.15 0.59 68.92 2.55 13,021 6,225 11,972 5,747 57 15
145 11.20 45.21 14.87 24.05 5.83 0.98 59.25 3.12 13,529 7,050 12,129 5,079 57 7
146 11.78 32.72 18.28 42.41 7.17 0.85 45.70 6.53 16,631 11,751 13,974 2,222 57 7
147 12.41 41.57 15.94 8.47 11.79 0.75 53.44 4.11 14,507 8,603 12,412 3,809 57 8
148 12.46 41.89 10.55 9.63 11.49 0.83 53.15 2.53 9,597 2,965 8,097 5,133 57 29
149 12.65 39.67 9.76 27.41 4.59 0.72 49.88 2.49 8,881 2,371 7,176 4,805 57 31
150 12.83 20.60 16.63 42.41 6.75 1.00 26.16 8.72 15,129 11,003 6,012 -4,992 57 57
151 13.56 35.08 6.71 17.64 8.27 0.85 42.87 2.14 6,102 109 3,923 3,814 6 9
152 13.74 37.23 9.30 43.12 8.17 1.00 45.78 2.69 8,465 2,172 6,293 4,122 57 36
153 14.33 37.18 8.48 40.06 3.77 0.49 46.32 2.57 7,713 87 5,743 5,656 2 45
154 14.47 36.88 5.98 19.21 9.77 0.86 45.32 2.06 5,440 505 3,516 3,012 57 14
155 14.57 39.12 5.16 41.16 4.19 0.53 49.82 1.85 4,693 0 3,382 3,382 0 39
156 14.62 23.41 8.62 19.93 5.05 0.44 27.51 3.44 7,844 2,006 3,160 1,155 57 57
157 15.00 41.48 7.77 14.79 3.42 0.91 51.88 2.36 7,073 1,240 5,504 4,264 57 57
158 15.68 39.37 9.04 53.23 8.78 0.41 50.41 2.80 8,228 2,134 6,663 4,528 57 57
159 17.49 26.79 10.62 41.16 6.50 0.91 32.01 4.57 9,663 4,035 5,123 1,088 57 57
160 17.53 29.02 6.20 20.63 7.26 0.71 35.61 2.74 5,638 683 2,770 2,086 29 32
161 17.59 68.25 8.34 16.31 11.49 0.70 90.19 2.20 7,592 1,641 7,208 5,567 57 7
162 19.11 49.19 7.36 20.28 4.30 0.45 63.83 2.55 6,700 1,208 5,821 4,612 57 57
k = 10 - 39.99 mD
163 19.43 66.62 12.38 27.41 5.14 0.81 88.39 3.05 11,270 5,163 10,709 5,546 57 12
164 20.01 30.43 10.56 14.22 10.58 0.43 37.35 4.67 9,611 4,062 5,990 1,927 57 57
165 21.06 24.89 17.51 27.69 7.79 0.60 34.47 11.49 15,932 12,587 8,404 -4,183 57 22
166 21.16 41.49 7.77 28.24 6.92 0.47 53.17 3.13 7,075 1,593 5,628 4,035 57 7
167 21.39 33.56 13.96 32.83 6.75 0.58 44.18 6.31 12,705 7,781 9,668 1,886 57 7
168 21.84 36.74 10.18 27.69 7.17 0.72 46.75 4.25 9,262 3,658 7,025 3,367 57 57
169 22.52 52.25 5.65 14.79 7.17 0.68 68.42 2.53 5,145 31 4,470 4,439 2 57
170 22.59 31.30 11.99 17.64 2.43 0.59 40.00 5.71 10,909 5,774 7,489 1,715 57 15
171 23.37 22.78 14.73 36.93 5.32 0.83 28.20 9.40 13,406 9,659 4,747 -4,912 57 14
172 23.55 28.63 3.59 24.91 8.36 0.46 36.23 2.59 3,264 0 1,094 1,094 0 57
173 23.61 52.79 11.56 43.12 5.49 0.51 70.57 3.92 10,521 4,858 9,738 4,880 57 23
174 24.42 60.01 11.63 26.03 7.88 0.71 79.10 3.77 10,586 4,900 9,862 4,962 57 57
175 24.59 43.43 9.60 15.83 8.17 0.94 56.06 4.00 8,736 3,204 7,247 4,044 57 7
176 24.70 36.57 8.70 35.80 7.61 1.00 45.57 4.14 7,921 2,526 5,505 2,980 57 8
177 25.05 37.71 13.76 30.76 7.17 1.00 50.36 6.30 12,518 7,630 10,256 2,625 57 7
178 25.21 16.68 12.00 19.21 10.40 0.67 25.39 8.46 10,920 6,491 2,828 -3,663 57 24
179 26.06 59.09 6.19 24.62 7.00 1.00 77.53 2.87 5,634 841 5,070 4,229 57 57
180 27.00 41.05 5.50 36.93 7.00 0.87 53.57 3.15 5,001 596 3,805 3,209 57 57
181 27.16 30.83 13.47 27.41 8.78 0.73 38.05 7.61 12,257 7,788 7,338 -450 57 7
182 27.21 47.70 10.22 17.64 9.24 0.94 63.92 4.26 9,304 3,875 8,365 4,490 57 9
183 27.81 38.18 12.79 42.41 12.14 0.91 49.70 6.21 11,643 6,742 9,182 2,441 57 7
184 33.43 51.30 15.21 13.62 3.42 0.70 68.39 6.84 13,839 9,218 12,417 3,199 57 57
185 34.15 28.96 5.86 24.91 9.12 0.87 35.84 4.48 5,337 942 2,092 1,150 48 16
186 34.72 35.48 3.45 23.75 13.15 0.97 46.62 3.33 3,135 0 1,780 1,780 0 57
187 35.52 33.05 5.01 43.12 3.16 0.58 43.85 3.99 4,555 543 2,834 2,290 57 57
188 35.68 23.36 10.37 18.45 12.14 0.66 30.21 7.55 9,439 5,166 3,682 -1,484 57 7
189 36.26 32.17 13.24 13.62 6.66 0.83 43.51 8.70 12,051 7,917 8,396 479 57 57
190 37.61 23.46 4.76 23.75 9.77 0.46 30.67 4.38 4,335 0 1,209 1,209 0 13
191 38.76 69.54 11.81 24.34 4.59 0.84 92.34 5.13 10,747 5,734 10,114 4,380 57 15
192 39.70 34.85 17.81 39.07 8.36 0.63 51.43 12.86 16,203 12,831 12,759 -73 57 57
193 39.75 43.82 10.98 33.13 3.65 0.48 57.54 6.39 9,989 5,267 8,189 2,922 57 8
194 39.81 37.56 8.30 32.22 11.23 0.40 50.30 5.59 7,555 2,804 5,787 2,983 57 26
301
classes k = 40 – 99.99 mD.
INPUTS OUTPUTS
Class # mD m 3/t m3/t A$/t A$/GJ MW Mt Mt/yr MMm 3 MMm 3 MMm 3 MMm 3 years years
195 41.70 59.06 9.03 24.05 3.77 0.82 79.83 4.99 8,222 3,321 7,626 4,304 57 32
196 43.20 41.13 5.42 40.06 4.87 0.91 54.70 4.56 4,931 816 3,701 2,885 57 7
197 46.51 41.26 5.91 15.32 5.49 0.52 55.11 5.01 5,375 1,140 4,100 2,961 57 57
198 46.66 24.82 10.17 18.45 2.59 0.76 34.23 8.56 9,257 5,271 4,383 -888 57 8
199 50.39 28.94 13.13 11.49 5.23 0.40 44.55 11.14 11,944 8,437 8,627 190 57 13
200 51.13 55.32 13.39 25.47 6.50 0.43 77.65 7.77 12,185 7,895 11,483 3,588 57 9
201 55.61 36.29 14.20 42.41 3.03 0.40 56.27 11.25 12,919 9,353 11,412 2,059 57 57
202 56.97 51.05 9.28 43.89 8.17 0.61 68.66 6.87 8,440 4,023 7,311 3,287 57 12
203 61.56 49.91 5.64 44.76 3.77 0.69 68.95 5.75 5,137 1,166 4,525 3,360 57 57
k = 40 - 99.99 mD
204 62.30 62.57 16.32 26.03 5.74 0.91 88.40 9.82 14,847 10,966 14,161 3,195 57 57
205 63.38 59.56 9.48 39.07 4.19 0.85 83.62 6.97 8,626 4,288 8,171 3,883 57 30
206 64.51 30.68 9.65 32.83 7.00 0.41 46.24 9.25 8,785 4,921 6,581 1,660 57 27
207 64.65 24.34 16.11 17.64 4.19 0.71 35.96 17.98 14,658 11,390 6,257 -5,133 30 57
208 64.81 33.39 11.41 38.17 6.50 0.98 51.66 10.33 10,381 6,695 8,678 1,983 57 22
209 70.91 28.80 13.25 17.21 4.09 0.63 41.42 13.81 12,059 8,996 5,704 -3,292 57 19
210 71.58 23.97 6.74 20.63 3.99 0.91 32.21 8.05 6,131 2,318 1,494 -824 57 8
211 78.45 55.81 8.82 29.63 5.91 0.60 79.92 7.99 8,024 3,968 7,580 3,612 57 16
212 78.78 34.12 8.83 32.83 6.41 0.79 48.09 9.62 8,035 4,247 5,308 1,061 57 57
213 79.06 37.40 6.30 37.74 4.49 0.46 53.62 7.66 5,735 1,893 4,476 2,583 57 57
214 79.43 30.58 14.65 36.17 5.14 0.88 48.03 16.01 13,328 10,441 8,087 -2,355 55 57
215 79.92 41.18 7.94 36.93 4.39 0.57 59.34 8.48 7,221 3,294 6,097 2,803 57 57
216 85.44 48.20 3.84 18.45 6.00 0.81 66.20 6.62 3,491 0 2,719 2,719 0 8
217 88.48 44.67 14.54 33.45 10.78 0.86 67.87 13.57 13,230 9,973 11,940 1,967 57 57
218 91.73 70.93 12.33 27.14 5.32 0.51 99.50 9.95 11,221 7,431 10,704 3,273 57 7
219 97.43 38.45 17.33 29.63 9.77 0.43 57.24 19.08 15,774 12,815 10,489 -2,326 46 57
302
classes k = 100 – 999.99 mD.
INPUTS OUTPUTS
RESERVOIR PROPERTIES ECONOMIC PARAMETERS CO 2 INJECTED CH4 RECOVERY PROEJCT LIFE
volume CO2 content price price pow er factor injected injected recovery recovery recovery Storage-ICBM
3 3 3 3 3 3
Class # mD m /t m /t A$/t A$/GJ MW Mt Mt/yr MMm MMm MMm MMm years years
220 105.49 19.75 13.27 38.17 3.77 0.85 44.85 22.43 12,076 9,271 4,232 -5,039 39 57
221 108.26 42.11 1.95 29.35 10.23 0.54 56.35 7.04 1,779 0 593 593 0 57
222 110.45 25.43 13.94 22.25 8.89 0.82 37.58 18.79 12,682 9,611 4,858 -4,754 32 30
223 113.20 33.97 2.34 18.45 2.26 0.91 44.81 7.47 2,130 0 264 264 0 8
224 114.06 50.22 7.45 34.75 6.33 0.81 70.29 10.04 6,777 3,173 5,623 2,451 57 19
225 114.98 21.54 14.88 36.17 13.15 0.93 52.54 26.27 13,542 11,126 6,288 -4,839 42 57
226 120.17 33.83 12.36 37.33 8.78 0.82 48.33 16.11 11,245 7,677 5,332 -2,345 36 57
227 128.26 51.47 10.97 24.34 7.70 0.49 77.30 12.88 9,979 6,683 9,292 2,609 57 13
228 129.22 22.30 3.72 25.19 10.78 0.99 26.37 8.79 3,383 0 39 39 0 56
229 140.59 35.03 8.53 27.69 5.23 0.68 52.56 13.14 7,764 4,603 4,955 352 57 10
230 141.25 65.86 13.39 21.93 3.03 0.70 98.96 14.14 12,189 8,594 11,832 3,238 44 57
231 150.12 43.97 8.09 14.22 3.65 0.91 63.75 12.75 7,364 4,121 5,577 1,456 57 11
232 152.39 59.65 11.10 25.19 4.87 0.82 84.68 14.11 10,097 6,772 8,933 2,161 52 7
233 156.78 51.89 14.43 27.14 5.57 0.56 72.21 18.05 13,130 10,275 9,977 -299 57 57
234 169.47 21.63 15.15 48.34 3.03 0.81 72.22 36.11 13,783 11,412 7,691 -3,720 31 13
235 178.79 22.41 7.57 8.47 7.88 0.57 28.35 14.18 6,892 4,130 681 -3,449 57 7
236 195.54 28.00 12.72 19.93 4.96 0.60 43.58 21.79 11,573 9,148 4,578 -4,569 47 10
237 197.19 28.33 2.59 25.47 9.92 0.57 39.99 10.00 2,357 0 6 6 0 57
238 206.64 61.53 15.49 16.31 7.79 0.62 99.35 19.87 14,100 11,259 13,754 2,495 50 8
239 224.04 34.15 13.29 29.35 6.66 0.66 70.00 23.33 12,096 9,171 10,895 1,724 31 9
240 224.53 31.15 10.18 20.96 8.36 0.84 57.70 19.23 9,265 6,775 6,577 -199 57 57
241 225.10 29.03 8.19 17.64 6.08 0.72 50.27 16.76 7,455 4,824 3,832 -992 57 57
242 240.02 26.12 13.17 38.17 7.00 0.67 53.07 26.54 11,986 9,723 5,690 -4,033 44 10
243 263.41 34.77 7.64 31.92 6.66 0.81 52.41 17.47 6,953 4,307 2,225 -2,081 57 57
244 284.01 42.97 16.59 31.04 6.16 0.40 86.64 28.88 15,095 12,459 14,343 1,884 31 57
245 285.76 46.48 13.83 41.16 5.32 0.70 73.83 24.61 12,583 9,928 8,822 -1,105 41 36
246 292.30 46.66 5.46 31.33 7.70 0.46 65.70 16.43 4,970 1,982 2,184 201 44 7
247 303.16 25.63 10.61 43.12 3.88 1.00 47.13 23.57 9,655 7,287 3,481 -3,806 41 19
k =100 - 999.99 mD
248 306.66 45.69 7.51 24.91 3.99 0.52 72.74 18.19 6,837 4,200 5,528 1,328 57 8
249 310.46 25.89 14.89 43.89 7.52 0.55 76.94 38.47 13,551 11,325 8,616 -2,709 31 57
250 312.36 42.30 17.17 24.34 7.43 0.75 62.30 31.15 15,621 13,130 9,689 -3,441 32 12
251 326.54 65.06 8.86 22.25 10.58 0.46 98.32 19.66 8,065 5,241 7,358 2,117 48 57
252 337.50 31.07 15.11 26.03 9.63 0.60 67.32 33.66 13,746 11,441 8,382 -3,059 32 34
253 360.27 44.83 1.65 19.93 7.98 0.89 69.44 13.89 1,498 0 961 961 0 23
254 366.52 77.30 14.50 23.75 3.29 0.69 124.05 24.81 13,194 10,522 12,917 2,394 45 15
255 373.13 57.31 12.99 40.06 7.79 0.64 99.96 24.99 11,823 8,781 11,543 2,761 29 23
256 373.56 24.11 4.16 16.77 8.27 0.50 45.95 15.32 3,783 1,323 1,296 -27 56 21
257 389.65 41.47 12.35 17.64 5.40 0.51 80.89 26.96 11,242 8,668 10,126 1,458 35 7
258 389.78 24.22 9.89 24.62 3.03 0.94 51.94 25.97 8,999 6,774 3,330 -3,443 43 57
259 397.84 25.65 7.06 28.52 10.23 0.71 39.36 19.68 6,425 4,143 1,092 -3,051 57 16
260 398.95 63.49 12.30 22.25 4.39 0.69 100.80 25.20 11,192 8,584 10,254 1,670 44 57
261 405.34 63.35 18.62 18.45 10.40 0.60 99.14 33.05 16,947 14,222 13,767 -455 28 57
262 407.80 31.90 10.08 36.17 6.58 0.88 49.65 24.83 9,174 6,969 3,254 -3,716 56 7
263 432.89 39.31 13.57 9.63 5.05 0.93 60.95 30.48 12,349 9,897 6,575 -3,322 32 57
264 452.50 32.05 14.68 31.04 5.49 0.81 74.72 37.36 13,363 10,884 8,495 -2,389 20 10
265 479.39 20.15 10.31 48.34 3.16 0.42 88.34 44.17 9,384 6,978 4,282 -2,696 25 12
266 486.66 35.03 9.37 40.59 12.14 0.45 51.13 25.57 8,530 6,332 2,852 -3,479 56 57
267 495.25 31.53 12.21 30.76 7.88 0.77 64.44 32.22 11,115 8,852 5,814 -3,037 34 57
268 500.86 31.78 12.13 7.04 8.67 0.54 64.14 32.07 11,042 8,723 5,732 -2,991 31 9
269 513.37 54.08 8.85 34.42 7.79 0.67 77.94 25.98 8,054 5,497 3,861 -1,636 41 8
270 514.48 29.63 6.84 38.61 6.83 0.83 44.38 22.19 6,223 4,006 1,179 -2,826 57 57
271 576.20 37.80 8.94 30.47 10.58 0.81 53.77 26.89 8,136 5,763 2,703 -3,059 39 55
272 642.84 32.70 6.57 23.46 9.77 0.62 48.90 24.45 5,979 3,694 1,220 -2,474 45 14
273 694.85 32.10 4.23 22.55 9.37 0.60 43.86 21.93 3,854 1,668 203 -1,465 57 57
274 761.17 30.27 14.03 14.79 7.79 0.83 103.23 51.62 12,769 10,460 9,166 -1,294 16 18
275 765.98 48.26 7.79 37.74 5.66 0.62 87.61 29.20 7,089 4,797 5,549 751 42 57
276 778.22 32.26 7.14 41.76 11.23 0.60 55.28 27.64 6,494 4,097 1,815 -2,282 31 55
277 813.99 30.34 12.96 48.34 11.49 0.62 96.02 48.01 11,790 9,537 7,980 -1,556 20 43
278 844.59 54.08 8.49 29.07 5.49 0.85 95.28 31.76 7,730 5,532 6,010 478 47 32
279 874.13 33.15 11.10 41.16 7.98 0.41 78.60 39.30 10,101 7,886 5,726 -2,160 27 26
280 967.40 15.78 7.28 19.93 2.89 0.90 167.28 83.64 6,622 4,481 2,610 -1,870 32 7
281 984.60 60.61 10.47 35.45 2.26 0.52 110.98 36.99 9,524 7,056 8,475 1,419 26 46
282 986.86 34.12 14.43 18.45 8.36 0.66 111.27 55.64 13,127 10,697 9,802 -896 12 12
283 998.91 44.61 4.39 41.76 7.52 0.70 83.96 27.99 3,997 1,847 2,947 1,100 48 8
303

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The Economics of CO2 Storage in Coal Seams with

Enhanced Coalbed Methane Recovery (CO2-ECBM) -

A thesis submitted in fulfilment of the requirements for the degree of

School of Petroleum Engineering

I would like to express my gratitude to my supervisors Guy Allinson, Dianne Wiley,

Brunhild Friederike Johanne Wilhelmine Sander, geb. Warneking

DEDICATION ................................................................................................ iii

LIST OF FIGURES ....................................................................................... x

LIST OF TABLES ......................................................................................... xix

LIST OF ACRONYMS ................................................................................. xxi

NOMENCLATURE ....................................................................................... xxii

PUBLICATIONS ........................................................................................... xxix

1.1 CLIMATE CHANGE AND ITS CONSEQUENCES........................................... 1

1.2 CARBON CAPTURE AND STORAGE .............................................................. 3

1.3 CO2 STORAGE IN COAL SEAMS ..................................................................... 5

1.4 RESEARCH OBJECTIVE & THESIS OUTLINE ............................................... 6

2 LITERATURE REVIEW - CO2 STORAGE IN COAL WITH ENHANCED

2.2 THEORY OF GAS MIGRATION IN COAL ..................................................... 10

2.3 GAS RECOVERY FROM COAL SEAMS ........................................................ 38

2.4 CO2 STORAGE IN COAL SEAMS ................................................................... 44

2.5 THE ECONOMICS OF CO2 STORAGE IN COAL SEAMS ............................ 54

2.6 RESEARCH GAPS ............................................................................................. 59

3 RESERVOIR SIMULATION STUDIES OF CO2 INJECTION INTO COAL

3.1 INTRODUCTION TO SPRING GULLY, BOWEN BASIN ............................. 62

3.2 CONSTRUCTION OF THE RESERVOIR MODEL ......................................... 64

3.3 HISTORY MATCHING OF PILOT PRODUCTION DATA ............................ 76

3.4 SIMULATION OF CO2 STORAGE WITH INCREMENTAL CBM

3.5 SUMMARY & CONCLUSIONS ....................................................................... 92

4 METHODOLOGY TO DETERMINE THE ECONOMICS OF CO2

4.1 MODEL SYSTEM BOUNDARIES ................................................................... 93

4.2 THE COSTS OF CO2 AVOIDED ....................................................................... 95

4.3 CO2 CAPTURE AND ITS COSTS ................................................................... 101

4.4 CO2 STORAGE AND ITS COSTS ................................................................... 105

4.5 BASELINE ASSUMPTIONS FOR THE DCF MODEL.................................. 112

4.6 ECONOMICS OF CCS-ICBM / STORAGE-ICBM AT SPRING GULLY .... 114

4.7 CONCLUSIONS ............................................................................................... 128

5 THE EFFECT OF PARAMETER VARIABILITY ON STORAGE-ICBM

5.1 METHODOLOGY ............................................................................................ 130

5.2 SENSITIVITY TO ECONOMIC PARAMETERS ........................................... 131

5.3 SENSITIVITY TO RESERVOIR PROPERTIES ............................................. 135

5.4 CONCLUSIONS ............................................................................................... 151

6 SCREENING CRITERIA AND PRELIMINARY OPERATING

6.1 INTRODUCTION ............................................................................................. 153

6.2 METHODS AND ASSUMPTIONS ................................................................. 154

6.3 SENSITIVITY TO RESERVOIR PERMEABILITY ....................................... 161

6.4 SENSITIVITY TO GAS CONTENT AND SEAM SATURATION ............... 185

6.5 SUMMARY AND APPLICABILITY OF RESULTS ...................................... 197

6.6 QUALITATIVE DISCUSSION OF OTHER FACTORS AFFECTING THE

6.7 CONCLUSIONS ............................................................................................... 205

7 INCORPORATING UNCERTAINTY INTO THE ECONOMIC

7.1 INTRODUCTION ............................................................................................. 208

7.2 METHODOLOGY ............................................................................................ 209

7.3 INPUT DISTRIBUTIONS ................................................................................ 211

7.4 MONTE CARLO RESULTS ............................................................................ 230

7.5 DISCUSSION .................................................................................................... 254

7.6 CONCLUSIONS ............................................................................................... 255

8 CONCLUSIONS ..................................................................................... 258

9 REFERENCES ....................................................................................... 264

APPENDIX - REALISATIONS FROM THE MONTE CARLO ANALYSIS 291

BHP = Bottomhole pressure

αS = Volumetric shrinkage coefficient (t/m3)

1.1 CLIMATE CHANGE AND ITS CONSEQUENCES