Chaparral Energy to pipe CO2 to help extract Osage County oil
BY ROD WALTON World Staff Writer
Wednesday, December 26, 2012
12/26/12 at 2:46 AM
Winding from Coffeyville, Kan. to Burbank, Okla., is a pipeline project that maybe even Al Gore could love.
Chaparral Energy Inc. is building a line that will move carbon dioxide to help with enhanced oil recovery at the historic North Burbank field in Osage County. The project, due for completion early next year, initially will pipe about 23 million cubic feet of CO2 captured from a Coffeyville fertilizer plant.
"This is a very green operation," Chaparral CEO Mark Fischer said. "For the life of that (fertilizer) plant, the CO2 has been emitted into the atmosphere."
That, of course, is what Gore says is causing the planet to overheat.
But Chaparral will put the CO2 back into the ground as it uses the gas to recover oil from the mature fields that were once the province of industry legends such as a Marland Oil, Skelly and Phillips Petroleum Co. The 68-mile, 8-inch diameter pipeline will run from a compressor station at a fertilizer plant owned by a subsidiary of CVR Energy Inc. to the North Burbank site.
North Burbank holds a tremendous amount of oil deep in its reserves but, like most wells, only a portion was recoverable with conventional techniques. Chaparral estimated it can possibly pull out up to 70 million barrels during the multidecade life of the project.
"North Burbank is by far the largest accumulation of oil in that vicinity," said Scott Wehner, the Oklahoma City-based company's senior vice president in charge of enhanced oil recovery efforts.
Chaparral and CVR announced the CO2 pact in March 2011. A CVR subsidiary produces about 850,000 tons of CO2 gas annually as a by-product of manufacturing ammonia and urea ammonium nitrate fertilizers at Coffeyville, according to reports.
The North Burbank project is designed to eventually will capture nearly all of those emissions. The CO2 will be moved down through injection wells to push oil into Chaparral's production wells.
During the past decade or so, Chaparral has initiated four CO2 flood projects, including the Camrick unit in the Panhandle. The company hopes to produce about 14 million barrels out of that field.
The typical life of a producing oil field is threefold: 1) the initial recovery, which is helped by the reservoir's natural upward pressure; 2) waterflooding, using water to push the next stage of recoverable oil to producing wells; and 3) CO2, which is often 30 times more expensive than waterflooding but essentially works the same way, Wehner said.
"The engineer's job is finding ways to more efficiently contact the oil with the CO2," he said.
The company's cost varies from 75 cents to $1.50 per thousand cubic feet of CO2, Fischer said. The project can break even when oil is $45 per barrel, but it meets Chaparral's economic model when it's closer to $65 per barrel.
The North Burbank crude is a sweet, relatively sulfur-free variety that is priced not too far from West Texas Intermediate. WTI crude settled at $88.61 a barrel Monday on the New York Mercantile Exchange.
The CO2 eventually will be routed into the South Burbank unit, also owned by Chaparral. The company plans to expand its pipeline capacity to 43 million cubic feet per day of CO2 by the end of 2013.
"All of our CO2 is from man-made sources," Fischer said. "This is unusual from other CO2 players, who get it from natural sources."
Original Print Headline: CO2 from plant to help produce oil
Rod Walton 918-581-8457
A crew member works on the Chaparral CO2 pipeline project in Osage County. The pipeline will move carbon dioxide from a Kansas fertilizer plant to the North Burbank oil field, where it will be used to extract petroleum. CHAPARRAL ENERGY / Courtesy