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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Bearcatbob who wrote (125982)11/27/2009 10:28:22 AM
From: Ed Ajootian  Read Replies (1) of 206302
 
BCBob, So do I. Denbury (DNR) has about 130 mmcfd of relatively pure man-made CO2 that is targeted to be tied into their pipeline (see slide 49 of their Analyst Presentation, be patient there's a ton of slides). Although this amount of CO2 would be significant to Denbury its probably only at a "rounding error" level with respect to the total amount of CO2 emitted nationally.

The general rule of thumb is that you need to inject about 10 mcf of CO2 into a typical oil formation to get 1 barrel of oil production. So this 130 mmcfd would allow Denbury to increase their tertiary production by 13,000 bopd, which would represent about a 50% increase of their current production from that source.

The beauty of tieing into man-made CO2 is that it is a supply source that never depletes (theoretically at least).

The only reason why this strategy is working for Denbury is that they already controlled this massive natural source of CO2 over in their Jackson Dome in MS, with something like 6 TCF of supply still remaining there. Over the last decade or so they exploited that source in fields in MS and LA, but they had already pretty much exhausted the availability of cheap, depleted oilfields around there, so they decided to build this long pipeline to TX. The economics of the pipeline are justified even if they don't end up getting a single mcf of man-made CO2 tied into it, since the pipeline is going to open up access to about 100 mmbo of oil that can be recovered from CO2 injection. But the icing on the cake will be getting these man-made CO2 sources tied into the pipeline, which would allow them to then go find more depleted oilfields along the pipeline route to implement tertiary recovery.

Denbury's situation is unique among E&P companies. This is why I agree with you that its very unlikely that CO2 sequestration for use in injecting into oil reservoirs will ever become "massive" in scope.
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