CSG, Markets, Technology

CSG and water: quenching the industry’s thirst

Producing coal seam gas (CSG) involves extracting gas from coal seams by reducing ground water pressure that keeps the gas absorbed between layers of coal.

The amount of water to be extracted from a CSG well varies, depending on the type and depth of coal. According to Origin Energy Senior Engineer Water Management Robert Caine, by-product water on an individual well can vary between
0.1 mega litres per day (ML/d) and 0.8 ML/d.

The by-product water tends to have a high salt content in addition to other constituents, which means that it must be managed properly and has to be treated if it is to be re-used.

Recently, initiatives such as the Queensland Government’s Coal Seam Gas Water Management Policy have been passed, putting a ban on further development of evaporation ponds for by-product CSG water within the state. This has meant that companies have had to look at different methods of dealing with their by-product CSG water, including both commercial and non-commercial options.

The Origins of commercial development

Water from Origin Energy’s Spring Gully CSG Field is diverted into a pond, which is used to allow the water to stabilise and cool before being processed at a reverse osmosis (RO) plant. The water is put through a primary filtration process and a micro-filtration process, which removes all of the solids from the water.

From there, the water is fed through a RO process with a series of membranes used in different stages to take out most of the dissolved solids to be found in the water.

“The primary filtration filters down to about 400 micron, which is about 0.4 millimetres. It is essentially designed to protect the membranes on the micro-filtration. The micro-filtration filters down to 0.1 of a micron – a millionth of a millimetre,”? Mr Caine explains.

He says that Origin is currently discharging the treated water into Yarumba Creek under a licence from the Queensland Environmental Protection Authority, although the company is looking at commercial and beneficial use of the water.

“These include industrial [uses], for example in mines and power stations; urban water for domestic use; and agricultural. For example, at Spring Gully we’ve undertaken a couple of trials for agricultural use of the treated water and they’ve been done quite successfully,”? he says.

In this way, Mr Caine says Origin will reduce its footprint on the Queensland landscape due to a reduction in evaporation ponds needed for the by-product water.

“The plant we have at Spring Gully currently has a capacity of 12 ML/d and with our pond, which we have for feed and for the containment of brine that comes from the treatment facility, we have a total area of about 70 hectares. If we had installed that area prior to building the water treatment facility, we would have had to build at least another 140 hectares of ponds.”?

Mr Caine says that Origin is actively looking at options for supplying towns as a potential option for its CSG water. He explains that the company’s investment in its water treatment facilities for its fields – $20 million for the Spring Gully plant and an expected approximate investment of $70 million in a water treatment facility at its Talinga CSG Fields – means that the company is looking for a commercial development option.

“In order for that level of investment to be sustainable we are looking for commercial returns,”? he says.

Multiple uses on target for Arrow

Arrow Energy has also sought commercial development options for its by-product CSG water.

The company, together with the Dalby Regional Council, initiated a large project involving the upgrade of an existing desalination plant in Dalby to treat CSG water from the nearby Surat Basin gas fields of Tipton West, Daandine and Kogan North. The project, to be jointly funded by the Council, Arrow and the Queensland and Commonwealth governments, was to put 5 ML/d of water into the local system.

The Dalby Regional Council has since decided not to proceed with the venture, due to the substantial capital and operating costs required for the CSG water as well as the failure to obtain approvals in the time required.

However, Chief Executive Officer Shaun Scott says that Arrow has a number of different methods of putting the excess water produced from its CSG wells to beneficial use.

He explains “In the Moranbah area, all the water we produce goes to local coal mines and they use it for coal washing. In the Surat Basin, some of the water goes to coal mines, some goes to feed lots and they use it for the cattle.”?

“We are also working on some smaller scale, containerised 1.5 ML/d units,”? Mr Scott says.

These smaller processing units are relocatable RO units. One of the difficulties with CSG by-product water is that, when CSG production and the dewatering process begins, the water level starts off high but then tapers off over time. “Where you actually need the water processing equipment will move around locations over time,”? says Mr Scott, and the relocatable units provide a solution to this problem.

“We’re trialling the relocatable RO units on a property that we own, to irrigate the crops on that property. And then we’ll be looking to work with the landowners when we come onto their land to drill wells; to take the water that we produce and purify it for them to use on their own properties,”? he says.

Arrow is also completing a research project in conjunction with the Queensland Department of Primary Industries and Fisheries (DPI), investigating the viability of farming salt water fish in its CSG evaporation ponds. Over the past 18 months, the DPI has successfully raised 15,000 fingerlings.

Arrow Environment Manager Ralph Gunness adds that the research project represents a promising opportunity to utilise the water for large scale aquaculture.

Internal use for Eastern Star Gas

Eastern Star Gas (ESG) currently takes the water produced from its Narrabri CSG Project, located in the Gunnedah Basin, New South Wales, to Bibblewindi via flowlines where the company has water handling facilities.

“The base case for us is to treat the water using RO, so we’ve had a pilot RO plant successfully operating on site reliably and efficiently for a couple of years,”? says ESG Chief Commercial Officer Roland Sleeman.

From there, ESG uses the treated water for its own purposes in drilling activities, dust control, and disposal back into the Bohena Creek. The concentrated water is put into an evaporation pond.

“We have a five hectare pond with an advanced evaporation system installed on it,”? he says, explaining that it is a misting system that speeds up the evaporation process.

“Looking to the future, we will look for and see whether we can identify better initiatives,”? he says.

However, Mr Sleeman does not see ESG using the by-product water as a future income stream in its own right.

“Water rates are initially high when you bring a new well online and will drop away with time, so we’re not in the business of producing water and wouldn’t want to go down that path of entering into arrangements that guarantee supply of it or anything like that.

“But if we can find value adding uses or if we can find uses that are beneficial to the regional community, whether it be for use in some industrial process – the process might also use gas – or for farming or other uses, then we would be pretty interested in doing it,”? he says.

Many options for Metgasco

Metgasco is currently in the process of developing a comprehensive water management plan as part of developing broadscale CSG production in the Clarence Moreton Basin, New South Wales.

“Because of the only moderately saline character of produced water, some of the evaporation dams are suitable for use as stock dams for cattle grazing in the local area,”? says Metgasco Managing Director David Johnson.

Currently, Metgasco engages one local contractor and its own water transport equipment to transport both drilling and produced water fluids to existing temporary storage sites. The company says that this is an interim measure until a more cost effective and environmentally acceptable approach is found.

In the future, Mr Johnson says the company is considering using the water for irrigation, RO, reinjection and evaporation. A hydro geological assessment produced by Klohn Crippen and Berger in September 2007 concluded that the “highest beneficial use of ground water in the area is stock water use, although there are instances of better quality water, which could be used for potable or agricultural purposes”?.

Potential for the industry

There are many uses for the by-product water produced from CSG fields. Government policy and an increased focus on the environment has seen companies considering different ways to utilise their water with great results.

From the cross section of companies selected above, those with larger CSG tenements are interested in commercialising their CSG water. And having easier access to the capital and infrastructure required to develop the facilities for such ventures makes commercialisation an attractive option. Not only does commercialisation provide a financial return for CSG producers, it also has a flow on benefit for local communities.

In addition, companies with greater potential CSG acreage can drill more wells at the one time than smaller companies. This can be seen when looking at the potential CSG acreage owned by Origin (Spring Gully, Fairview and Talinga fields and Undulla Nose prospect) and Arrow (Kogan North, Tipton West, Daandine and Stratheden fields), compared to ESG and Metgasco, whose focus is on the Narrabri and Clarence Moreton areas respectively.

Mr Johnson notes “Anticipated typical water production in the Clarence Moreton Basin consists of an initial water rate of up to 200 barrels per day (bbl/d) in the first 1 to 3 months, followed by a decline to 10 bbl/d over approximately 12 months.”?

A water profile such as this lends itself more to the use of RO units to potable and or stock quality water, but would be difficult to supply at a stable rate over a long period of time.

For ESG and Metgasco, value adding initiatives and internal company use of the water provides an environmentally conscious and effective method of managing CSG water.

All CSG companies are attempting to find the most effective and suitable by-product CSG water management strategies. And with the investment, research and development, and attention the industry is giving by-product CSG water, management strategies look set to develop innovatively and for the benefit of all.

“We’re looking at the alternatives and the motivation for that is our commitment to sustainability, reducing our footprint and essentially taking a potential waste product and turning it into something of value.”?

Robert Caine, Senior Engineer Water Management, Origin Energy.

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