THE fall-out from the rupture of well casing at Habanero-3 earlier this year is finally becoming clear.
Habanero-3
Habanero 1 and 3 are unlikely to be used for production, certainly in the foreseeable future, and Geodynamics’ plans for commercial power generation have been set back at least two years.
Barring a calamity at Petratherm or Panax Geothermal, one of these companies could well be the first to bring commercial geothermal power to the Australian market, perhaps as early as 18 months from now.
Geodynamics’ 2009 annual report, issued just two weeks ago, contained vague statements about “securing” Habanero 1 and 2.
The report did not explain what this entailed, but stated it was necessary because these wells could be prone to the same hydrogen embrittlement identified as the cause of the well casing failure at Habanero-3.
A company spokesman this week said that: “Habanero 1, 2 and 3 have been secured with cement plugs to prevent reservoir brine from flowing to the surface. These security measures can be reversed. Without significant remediation, these wells are unlikely to be useable for reservoir brine flow.”
In short, Habanero 1 could rupture in the same way as Habanero-3 and is out of action for the foreseeable future. (Habanero-2 was already sidelined by drilling problems in 2006, which led to the exit of founding managing director Bertus de Graaf, who is now leading Panax).
Habanero 1 and 3 were the paired wells that Geodynamics used to achieve proof of concept of geothermal power from hot fractured rocks.
With each well taking about six months and $20 million to drill, the effective loss of both wells is a major blow to the company’s plans.
In its annual report, the company noted it had “no concern about the immediate integrity” of its other deep geothermal wells – Joloika-1 and Savina-1 – because they have not come into contact with reservoir fluids.
It is understood these wells will be lined with an inner sleeve of higher-quality casing, which effectively limits them to becoming smaller-diameter injection wells rather than production wells.
The problematic future for the company’s Habanero wells is confirmed by the company’s recently released forward work program.
It says the next field work, in early 2010, will be cleaning out Joloika-1 and fracturing the rock to promote a reservoir.
This will be followed by drilling a second well near Joloika-1 to establish a new pair of wells. Another entirely new pair of production and injection wells is scheduled to follow.
It’s now unclear when free electricity will flow to the town of Innamincka, which was set to be a showcase for the first electricity to be generated by a 1-megawatt power plant.
Townsfolk received a letter last month saying they could expect power in about nine months, although the company is not making any commitments to the wider public.
If it is serious about the nine-month timeframe, this would mean extending the 11-kilometre transmission from Habanero to take it a further 9km west to Jolokia.
The company is keen to emphasise that Habanero 1 and 3 did provide proof of concept for its hot fractured rocks model of geothermal power, and the rupture of casing at Habanero-3 has invalidated what it achieved.
However, the incident has blown out its timeline for a commercial demonstration plant by two years.
Prior to the failure of Habanero-3, a 50MW demonstration plant was scheduled to be operating by the end of 2011, but this has now been revised to December 2013.
Geodynamics was the geothermal development leader, so the fallout from Habanero-3 has been a blow to the cause of the whole industry.
But the company’s most advanced competitors – Petratherm and Panax – are still moving forward rapidly and expect to generate their own commercial power in 2011.
The race between the three companies is fascinating because each company has a different model for harnessing heat from the Earth to generate geothermal power.
Geodynamics is attempting to create an artificial reservoir in hot granites (about 250C) by enhancing the natural fractures.
This model is now referred to as an Enhanced or Engineered Geothermal System (EGS), and was formerly Hot Fractured Rocks.
The company’s Cooper Basin project would be a world first if it can be developed into a commercial power source.
Petratherm is pursuing a different model at its Paralana project in the Flinders Ranges.
Heat will be extracted from sedimentary rocks above hot granites. At about 200C, the target rocks are cooler than the granites drilled further north in the Cooper Basin by Geodynamics.
But Petratherm is trading off lower temperature for slightly shallower depth, easier drilling and the likelihood of better water flow in fractured shales at Paralana compared to the granites of Innamincka.
The company will rely on conventional oil exploration and development techniques, including proven techniques for fracture stimulation, rather than enter a new realm of deep drilling in igneous rocks.
The company is due this week to reach total depth of 4000m at Paralana-2, its first deep production well.
The well will be logged in a few weeks – once the natural temperature profile is re-established – and cased.
A plan for fracturing the surrounding rocks will then be developed. Petratherm is planning to have a 7.5MW power plant running in 2011, supplying the nearby Beverley uranium mine.
This would be Australia’s first commercial sale of power from geothermal sources, unless Panax can get there first with its Penola project in the southeast of South Australia.
Panax has yet another model for geothermal power that is based on the use of a conventional sandstone aquifer with groundwater at temperatures of about 145C.
The Panax model relies on the natural porosity and permeability of the reservoir and does not require any fracture stimulation.
Panax believes its model has advantages that will get it to the market first, even though its first geothermal well, Salamander-1, does not spud until later this month or early December. (Panax will be using the same heavy-duty Lightning drill rig that is about to reach total depth at Paralana).
The Brisbane-based company estimates it will take only 60 days to drill Salamander-1, based on previous deep petroleum wells in the Penola project area.
This compares to four months for Paralana-2 and 5-6 months to drill the deep granites below the Cooper Basin.
More importantly, the Panax approach does not require a second well to establish reservoir flow data. (A second injection well will eventually be required to maintain reservoir pressure, but not for initial flow testing).
Achieving a high flow rate is critical to because of the relatively lower temperature of the groundwater.
The company anticipates that Salamander-1 will produce all the information it needs to convert its measured geothermal resources into a bankable reserves figure, and commit to development of a 6.7MW commercial demonstration plant. This would be completed in the second half of 2011.
Petratherm and Panax still have plenty of their own hurdles to clear, but everyone involved in the industry hopes there will be no more major setbacks in the race to develop Australia’s first commercial geothermal power.
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