|Re:||THE APPLICATION OF Aurora||)||Disposal Injection Order No. 24|
|Gas, LLC for disposal of Class II||)|
|oil field wastes by underground||)||Nicolai Creek Field|
|injection in the Tyonek Formation,||)||Nicolai Creek Unit No. 5 Well|
|Nicolai Creek Unit No. 5, Section||)|
|19, T11N, R12W, S. M.||)|
|)||June 26, 2002|
IT APPEARING THAT:
1. By correspondence dated February 22, 2002, and received by the Alaska Oil and Gas Conservation Commission ("AOGCC") on February 26, 2002, Aurora Gas, LLC ("Aurora") requested authorization for a disposal order to allow the underground injection of non-hazardous Class II oil field waste fluids into the Tyonek Formation within the Nicolai Creek Unit No. 5 ("NCU #5") well bore. The NCU #5 well is located in the Nicolai Creek Field, Kenai Peninsula Borough, Alaska.
2. Notice of opportunity for public hearing was published in the Anchorage Daily News on March 22, 2002 in accordance with 20 AAC 25.540.
3. The Commission did not receive any protest or a request for a public hearing.
1. Aurora is the operator of the Nicolai Creek Unit. There are no other operators within a one-quarter mile radius of the proposed disposal injection well.
2. The NCU #5 well is a vertical well within Federal lease AA-8426, which is administered by the Bureau of Land Management. Cook Inlet Region Inc. is the surface owner.
3. Aurora proposes to conduct disposal operations in the NCU #5 well between 2000' and 2550' measured depth ("MD").
4. There are no wells within a one-half mile radius of the NCU #5 well.
5. There are no recorded domestic water supply wells within 5 miles of the proposed injection site. The nearest drinking water supply source is Markley's Spring, an artesian spring located in the NW 1/4 of Section 27, T11N, R12W, S.M., which is over 2 1/2 miles southeast of NCU #5. The closest known water well is a 120-foot deep utility water well located at the Nicolai Creek Unit No. 3 ("NCU #3") well site, about 3,230 feet to the east of the NCU #5 well.
6. The proposed disposal interval in the NCU #5 extends from 2000' to 2550' MD and true vertical depth ("TVD"), and is composed of Tyonek Formation sediments. The name Tyonek Formation is used to identify the disposal zone described in this order.
7. The lithologies in the proposed disposal zone consist of permeable very fine to coarse-grained sandstones and conglomerates interbedded with clays and siltstones.
8. Wire line log analytical techniques, which comply with EPA recommended methods as described in "Survey of Methods to Determine Total Dissolved Solids Concentrations," (KEDA Project No. 30-956), were used to characterize formation water salinity in the NCU #5 well. Well log analysis indicates formation salinities within the proposed disposal interval are 10,000 ppm or greater.
9. Laboratory analysis of a produced water sample from equivalent or shallower sands in offset well NCU #3 yielded a value of 10,500 ppm, which confirms the well log analytical results.
10. Approximately 140 net vertical feet of sandstone are present in the proposed disposal interval.
11. The main confining zone is 80'of siltstone and mudstone located between the depths of 1840' and 1925' MD and TVD, which will prevent upward migration of injected fluids into overlying non-exempt aquifers.
12. The proposed disposal zone is confined below by over 50 net vertical feet of siltstone and approximately 90 net vertical feet of clay that lie between the depths of 2780' and 3120' MD and TVD.
13. The NCU #5 well was drilled to a depth of 8578' MD and TVD. The well was completed with 30" structural conductor from surface to a depth of 34' MD, 16" surface casing from surface to a depth of 308' MD, 10-3/4" casing from surface to 2628' MD, and 9 7/8" open hole from 2628' to 8578' MD. The original well bore was abandoned on March 7, 1972 with cement plugs in the 9 7/8" hole from 7215' to 7000' MD, 6718' to 6500' MD, 4151' to 3950' MD, 3314' to 3050' MD, 2756' to 2500'MD (into 10-3/4" casing), and at surface with a 25 sack cement plug.
14. Aurora proposes to re-enter NCU #5, drill out the surface plug and clean out the 10-3/4" casing to a depth of 2500' MD. The well will be completed with 2 7/8" tubing and a packer at approximately 2250' MD. Perforations will be added between 2325' and 2345' MD.
15. The 10-3/4", 40.5 pound per foot ("ppf"), casing meets the requirements of AAC 252.412.
16. Aurora will test the mechanical integrity of the NCU #5 well in accordance with the requirements of 20 AAC 25.412 The surface plug will be drilled out, the casing will be cleaned, flushed, and pressure tested to 1500 psi for 30 minutes. A USIT logging tool or equivalent will be utilized to evaluate the integrity of the cement within the well bore. After running the completion packer and tubing, the casing/tubing annulus will be pressure tested to 1500 psi for 30 minutes. Pressure on the tubing/casing annulus will be monitored each day during injection operations to ensure continued mechanical integrity of the completion.
17. The disposal waste stream will consist of produced water, drilling, completion and workover fluids, drill cuttings, rig wash, mud slurries, and other Class II fluids and solids. The composition of the waste stream and constituent volumes will vary depending on drilling, workover, stimulation and maintenance activity.
18. Aurora proposes that the average daily injection volume will range from 350 to about 1,000 barrels per day (BPD") at rates ranging up to a maximum of 5 barrels per minute ("BPM"). The daily volume would depend on the number of producing wells, drilling activity and well work conducted annually.
19. At the proposed injection rates, Aurora estimates maximum surface injection pressure of 1500 pounds per square inch ("psi") under normal operating conditions.
20. A step rate test will be done after perforating the disposal interval to establish injection rate and pressure characteristics of the formation.
21. The workover, drilling and production programs are estimated to generate a maximum of 372,500 barrels of oilfield waste per year. Up to 3,725,000 barrels of waste may be disposed over the anticipated 10-year life of the project.
22. Aurora expects fractures will be created as the disposal zone begins to plug with injected solids and waste. Fractures (or disaggregation of the clogged pores and rock matrix) provide pathways to transport waste fluids to undamaged storage volume within the disposal zone.
23. Aurora submitted fracture-model analysis results of four different fracture scenarios. The results showed that during expected operations, injected wastes would not breach the confining layers between 1840' and 1985' MD and TVD.
24. The injection pump will be continuously manned during injection operations at the NCU #5 well. The annulus pressure of the NCU #3 well will be checked and recorded prior to and after each injection cycle.
1. The application requirements of 20 AAC 25.252(c) have been met.
2. There are no wells within a one-half mile radius of the NCU #5 well. There are no recorded domestic water supply wells within 5 miles of the NCU #5. The nearest domestic water supply, Markley's Spring, is a surface water source that is located over 2 1/2 miles southeast of the NCU #5.
3. Waste fluids will be contained within appropriate receiving intervals by the confining lithology in the Tyonek Formation, cement isolation of the well bore and operating conditions.
4. Disposal injection operations in the NCU #5 well will be conducted at rates and pressures below those estimated to fracture the confining zone.
5. Evaluation of operational performance data and surveillance data will reasonably assure there is no fracturing of the confining zone.
6. Surveillance of disposal material, daily monitoring of operational parameters, and demonstration of mechanical integrity will reasonably ensure continued mechanical integrity of the well and that waste fluids are contained within the disposal interval.
7. Disposal injection of Class II wastes into well NCU #5 will not cause waste, jeopardize correlative rights, or impair ultimate recovery.
NOW, THEREFORE, IT IS ORDERED THAT:
RULE 1: Authorized Injection Strata for Disposal
Injection of authorized fluids for purposes of underground disposal of oil field wastes is permitted into the Tyonek Formation between 2000' and 2550' MD in the NCU #5 well, in the Nicolai Creek Unit.
The Commission may suspend, revoke, or modify this authorization if injected fluids fail to be confined within the designated injection strata.
RULE 2: Authorized Fluids
Fluids authorized for injection in the NCU #5 well are:
1. produced water
2. drilling, completion and workover fluids
3. drilling mud
4. Norm scale
5. tank bottoms
6. rig wash
7. precipitation accumulating within containment areas
8. other fluids suitable for disposal in a Class II well and approved by the commission on a case-by-case basis.
RULE 3: Demonstration of Tubing/Casing Annulus Mechanical Integrity
In addition to the requirements of 20 AAC 25.252 (d), mechanical integrity of the disposal well must be demonstrated at least once every two years.
RULE 4: Maximum Injection Pressure
Disposal injection operations must be conducted at rates and pressures below those estimated to fracture the confining zone between 1840' and 1925' MD. The Commission may implement specific maximum injection rates and pressures by administrative action following a review of injection test data and evaluation of surveillance reports.
RULE 5: Surveillance
Operating parameters including disposal rate, disposal pressure, annulus pressures, step rate test results and volume of fluids and solids pumped must be monitored and reported according to requirements of 20 AAC 25.432(1). Operator will obtain a baseline temperature log and a baseline step rate test prior to initial injection. An initial report of operations must be provided after one month of injection. An annual report for the calendar year evaluating the performance of the disposal operation, including an annual MIT and step rate test, must be submitted by July 1 of each year.
RULE 6: Notification of Improper Class II Injection
The operator must immediately notify the Commission if it learns of any improper Class II injection. Additionally, notification requirements of any other State or Federal agency remain the operators' responsibility.
RULE 7: Administrative Action
Unless notice and public hearing is otherwise required, the Commission may administratively waive the requirements of any rule stated above or administratively amend any rule as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater.
RULE 8: Other Conditions
Operations must be conducted in accordance with AS 31.05 and Title 20, Chapter 25 of the Alaska Administrative Code unless specifically superseded by Commission order. Failure to comply with an applicable provision of AS 31.05, Title 20, Chapter 25 of the Alaska Administrative Code, or a Commission order may result in the revocation or suspension of this authorization.
DONE at Anchorage, Alaska and dated June 26, 2002.
Cammy Oechsli Taylor, Chair
Alaska Oil and Gas Conservation Commission
Daniel T. Seamount, Jr., Commissioner
Alaska Oil and Gas Conservation Commission