Economic Evaluation of Cycling
Gas-Condensate Reservoirs With Nitrogen
Charles W. Donohoe, * SPE, Core Laboratories Inc.
Robert D. Buchanan Jr., SPE, Air Products and Chemicals Inc.
Summary
This work presents the results of an investigation of
the economic feasibility of using cryogenically
produced nitrogen as a substitute for natural gas to
mairtain reservoir pressure during cycling operations
in gas-condensate reservoirs. Those economic factors
unique to nitrogen cycling are discussed. It has been
concluded that gas reservoirs with a condensate
content in excess of 100 bbl/MMcf should be con-
sidered as potential nitrogen cycling prospects.
Introduction
Historically, gas-condensate reservoirs which exhibit
liquid loss through retrograde condensation with
reduction in reservoir pressure have been depleted
under a full or partial pressure maintenance program
by injection of dry natural gas. The technology to
evaluate and accomplish this is available and well
proved. The increased value and the shortage of
natural gas, however, has made it generally
uneconomic to divert this gas from the sales line to
injection for the purpose of maintaining pressure in
gas-condensat, reservoirs.
This paper is concerned with the economic
feasibility of using cryogenically produced nitrogen
as a substitute for natural gas to maintain reservoir
pressure during cycling operations in gas-condensate
reservoirs. Many factors affect the economics of a
gas cycling project. Generally, the three most im-
portant factors are prices, stock-tank liquid content
of the reservoir gas, and the degree of reservoir
heterogeneity.
For the purpose of this evaluation, a hypothetical
reservoir has been defined. Projections of per-
formance have been made assuming the reservoir
contains three different reservoir fluids with stock-
tank liquid contents ranging from 76.1 to 220.7
'Now with Core Laboratories Canada Ltd.
0149213618110002 7494$00.25
Copyright 1981 Society of Petroleum Engineers of AIME
FEBRUARY 1981
bbl/MMcf. The performance of each of these
reservoir fluid systems has been evaluated assuming
three different degrees of reservoir heterogeneity.
Performance and economic projections have been
made assuming three different depletion methods: (1)
pressure depletion with no injection, (2) pressure
maintenance by nitrogen injection, and (3) pressure
maintenance by return of residue gas and purchase of
makeup gas. Multiple projections have been made
for the injection cases assuming blowdown of the
reservoir is initiated at various times, starting with
breakthrough of dry gas. Performance and economic
results are presented for those cases which produce
the maximum income discounted at a rate of 15070 per
year. Economic evaluations were made assuming
prices and costs escalate at a rate of 6070 per year.
Projections of Performance
Reservoir Description
To make an economic evaluation of cycling a gas-
condensate reservoir with nitrogen, it was necessary
to obtain projections of reservoir performance. It
was our desire to evaluate the effect of different
reservoir fluid compositions and degrees of reservoir
heterogeneity upon the economic potential of this
depletion mechanism. To isolate these effects, per-
formance projections were made on a hypothetical
reservoir whose properties are shown in Table 1.
The hypothetical field contained six contiguous
five-spot patterns of 360 acres each. This resulted in a
conforming area under injection operations of 2,160
,!cres or 75070 of the total field area. In all injection
cases investigated there were six injection and 12
producing wells. Under pressure depletion it was
assumed that there were 18 producing wells.
Reservoir Fluid Properties
The compositions and basic properties of the three
reservoir fluids investigated are presented in Table 2.
263
 TABLE 1 - BASIC RESERVOIR PROPERTIES TABLE 2 - RESERVOIR FLUID COMPOSITIONS
AND PROPERTIES
Average depth, ft 10,000
Initial reservoir pressure, psia 4,475 Fluid
Reservoir temperature, F 194 A B C
Total field area, acres 2,880
Average thickness, ft 50 Composition, mol %
Average porosity, % 19.8 Nitrogen 0.37 0.42 0.46
Average water saturation, % 34.9 Carbon dioxide 0.57 0.59 0.61
Hydrocarbon pore volume, MMbbl 144.0 Methane 59.39 64.43 68.64
Ethane 13.78 13.82 13.90
Fluid Propane 7.58 7.24 6.89
Isobutane 0.79 0.73 0.66
A B C n-butane 3.28 2.98 2.66
Original volumes in place Isopentane 0.84 0.74 0.62
Gas, Bcf 200.506 208.307 212.300 n-pentane 1.31 1.13 0.94
Condensate, MMbbl 44.252 28.871 16.150 Hexanes 1.80 1.48 1.14
Heptanes plus 10.29 6.44 3.48
100.00 100.00 100.00

Heptanes plus density

at 60F, g/cm 3 0.8002 0.7906 0.7763
Heptanes plus molecular
weight 177.1 166.4 152.3
STo6K TANK LiQUIO CON+ENT Oewpoint pressure, psia 4,375.0 4,015.0 3,415.0
FLUID "A" Temperature, F 194.0 194.0 194.0
.... 200 r Stock-tank liquid content,

~LUID"S"
u bbl/MMscf 220.7 138.6 76.1
2:
2:
......
Maximum retrograde liquid,
~.
en vol% 42.2 21.8 8.3
...J
~ 100
/
./ FLUID C
Plant recovery efficiencies, %
V Propane 75
~ Butane 90
o Pentanes plus 100

RETROGRADE LIQUID SATURATION

Fluid A was the subject of a paper presented by
O'Dell and Miller l and was selected for use in this
....... ~ investigation because of its high liquid yield and
40 retrograde loss characteristics_ A depletion study of
-"
>
Q..
U
/
~~ \
this fluid was made using a computer PVT simulator
to obtain compositions, liquid yields, physical
:J:
u...
30
;' properties, and retrograde characteristics as a
o function of pressure_ Fluids Band C are the com-
I-
....
Z positions of the equilibrium gas obtained during the
~ 20
.... depletion of Fluid A at pressures of 4,015 and 3,415

\
"""FLUID "s"
Q..
/" psia, respectively. Physical properties of these two
fluids were obtained in the same manner as described

---
10 for Fluid A. The three fluids exhibited stock-tank
\ contents of 220.7, 138.6, and 76.1 bbllMMcf at their

"'1\
FLUID"C"
respective dewpoint pressures. Fig. 1 describes the
o retrograde behavior and stock-tank liquid content of
o 1000 2000 3000 4000 500C
the three fluids investigated as a function of reservoir
RESERVOIR PRESSURE, psig
pressure.
The effect of both displacing and mixing a
Fig. 1 - Stock-tank liquid content and retrograde liquid
saturation. hydrocarbon gas with nitrogen is the subject of a
paper by Moses and Wilson. 2 The results of
laboratory tests presented by these authors confirm
that an elevation in dewpoint pressure with resulting
retrograde condensation will occur when nitrogen
and a rich gas condensate are mixed. These same
phenomena occur to a lesser degree when a lean gas is
mixed with a rich gas condensate. This retrograde
loss will occur, however, only in those areas where
the two gases contact each other. The mixing volume
during the nitrogen injection phase of the cycling
program should be small in reservoirs normally
considered conducive to a cycling program. The
major mixing of the two gases will occur during the
264 JOURNAL OF PETROLEUM TECHNOLOGY

blowdown phase of the operation when retrograde
condensation will occur in the remammg
hydrocarbon gas anyway because of reservoir
pressure reduction. The factors affecting mixing in
the reservoir as outlined by these authors should be
evaluated for any specific project being considered.
Reservoir Heterogeneity
To describe the reservoir heterogeneity, a method
was used which reflects the maximum/minimum
permeability ratio. The mechanics of obtaining a
permeability distribution by this method consists of
grouping and averaging the basic core analysis data
to obtain an average permeability as a function of
cumulative pore volume. This relationship is plotted
on semilog paper, and a line is drawn through the
straight-line portion of the data. The ratio of the
maximum and minimum permeabilities obtained at
the intercept of this line with the 0 and 100070 pore-
volume points is used as an index of the
heterogeneity. This technique reduces the ab-
normalities associated with the high and low ends of
the permeability distribution. Average permeabilities
over lO-percentile ranges were selected for
calculation of recovery and dry gas cut as a function
of pore volumes injected. An example distribution
for a ratio of 20 is presented in Fig. 2. In this in-
vestigation maximum/minimum permeability ratios
of 5, 10, and 20 were used to describe the reservoir
heterogeneity from slight to relatively severe.
Performance Calculation Method
The object of this investigation was to evaluate the
economic potential of a process and some of the
factors which influence the economics of the process.
For this purpose a material balance computer
model was used to make the performance
calculations. The aerial sweep as a function of pore
volumes injected is input data for the computer
program. The data used in this paper was for a five-
spot pattern assuming a mobility ratio of one as
presented by Dyes et al. 3 The vertical displacement
efficiency was calculated in the computer program by
the method proposed by Muskat 4 assuming an
exponential permeability distribution as previously
described and a mobility ratio of one.
This model permitted us to make many repetitive
calculations of performance varying the fluid
properties, degrees of heterogeneity, and time at
which the initiation of blowdown occurred. This
material balance model calculated well stream flow
rates, dry gas cut, separator gas rates, plant residue
and sales gas rates, condensate and plant yields,
volumes injected, and reservoir pressure as a func-
tion of time.
When the scope of the investigation is reduced to
the evaluation and design of a specific project, a
more sophisticated mathematical model could and
should be used.
Performance Projection Results
Performance projections were made for each of the
three reservoir fluid systems previously described
assuming three different depletion methods: (1)
FEBRUARY 1981
100
80
00 VERTICAL STRATIFICATION FACTOR "R"
--+------+--
t---
0
, I
0 +---- -- ----+--- - -
I
I
0
r--..... I,
f-
a
,
"""'" f"""o<;;;:'
, ~
.........
.0
~ N'<'o
..
.,
'0 10 w ~ ~ ~ ~ ro ~ 80 100
CUMULATIVE PERCENT POROSITY - FEET I ~h I
Fig. 2 - Vertical stratification factor.
pressure depletion with no injection, (2) pressure
maintenance with nitrogen injection, and (3) pressure
maintenance with residue and makeup gas injection.
It was assumed in all cases that a natural gas
processing plant would be available from the start of
production with a capacity of 33.0 MMcflD of inlet
feed gas. Total producing and injection rates were
limited by this plant capacity.
The two pressure maintenance depletion systems
were evaluated assuming various times for the
commencement of blowdown for all three of the
degrees of heterogeneity previously described.
Summaries of total project life recoveries for those
cases which yielded the greatest discounted net
working interest income are presented in Table 3.
When cycling with residue gas, the most ad-
vantageous time to commence blowdown was at the
time of dry gas breakthrough in all cases using Fluids
Band C. Only with Fluid A was it profitable to cycle
with residue gas beyond the time of breakthrough.
In the nitrogen injection cases the Fluid A and B
systems with heterogeneity indices of 5 and 10 ob-
tained their maximum profitability when blowdown
was delayed to some point beyond the breakthrough
of dry gas. All other nitrogen injection cases in-
dicated maximum profitability when blowdown was
initiated when breakthrough occurred.
These observations indicate that cycling becomes
less attractive economically as the reservoir fluids
investigated become leaner and as the reservoir
becomes more heterogeneous. This axiom has been
with the industry for some time.
Economic Projections
The economic factors used in making the economic
evaluations of the projections summarized in Table 3
fall into two categories. These categories are those
items peculiar to nitrogen injection and basic
economic parameters common to all gas injection
operations. These are discussed separately for clarity.
265
 TABLE 3 - SUMMARY OF PERFORMANCE PROJECTIONS

Product Recovery at
Economic Limit Makeup
Cycling Project Abandonment Sales Plant Gas Percent Recovery
Life Life Pressure Gas Condensate Products Injected Reservoir
Case Identification (years) (years) (psia) (Bcf) (MMbbl) (MMbbl) (Bcf) Gas Condensate
------ ... -~- -~- ------- -- .. _--
Fluid A
Pressure depletion 0 24 932.0 115.5 7.0 7.7 0.0 66.0 15.8
R=5
Nitrogen injection 20 35 1,256.1 138.8 35.7 11.3 239.8 90.0 80.8
Residue gas injection 8 33 908.6 138.7 27.3 10.5 30.3 83.3 61.7
R=10
Nitrogen injection 19 36 1,162.3 134.5 32.4 10.8 227.6 86.3 73.3
Residue gas injection 7 32 904.3 135.7 23.9 10.0 25.8 78.9 54.1
R=20
Nitrogen injection 16 36 1,044.2 127.6 28.4 10.2 191.7 81.0 64.2
Residue gas injection 6 31 900.1 132.7 21.0 9.4 21.9 75.2 47.5
Fluid B
Pressure Depletion 0 25 910.5 132.0 7.7 8.9 0.0 72.6 26.6
R=5
Nitrogen injection 12 31 1,039.9 155.0 21.1 11.5 132.6 90.0 73.0
Residue gas injection 6 31 887.8 144.3 17.2 10.9 15.4 85.4 59.5
R= 10
Nitrogen injection 7 31 961.9 148.1 16.8 10.7 76.5 84.7 58.3
Residue gas injection 5 30 886.6 142.4 15.3 10.4 12.8 81.5 53.0
R=20
Nitrogen injection 4 31 932.5 143.3 13.7 10.1 43.5 80.9 47.3
Residue gas injection 4 29 885.0 140.4 13.7 9.9 10.2 78.4 47.4
FluidC
Pressure Depletion 0 26 868.2 146.0 7.2 9.7 0.0 78.3 44.7
R=5
Nitrogen injection 7 30 946.9 166.3 11.4 11.6 71.3 90.5 70.8
Residue gas injection 7 32 862.1 154.8 11.6 11.8 11.3 89.5 71.7
R=10
Nitrogen injection 6 32 911.7 161.4 10.5 11.2 61.2 87.7 65.2
Residue gas injection 6 31 861.9 153.5 10.6 11.3 9.6 85.7 65.9
R=20
Nitrogen injection 5 32 906.3 157.1 9.8 10.9 51.0 85.2 60.7
Residue gas injection 5 30 861.7 152.3 9.9 10.8 8.0 82.9 61.2

Nitrogen Generation that when a specific project is identified, costs should

be developed for that project, taking into con-
The production of nitrogen by the cryogenic separ-
sideration its own unique set of conditions.
ation of the components of air has been in use since
the early part of this century and is the most The factor which has the greatest effect on the cost
. . 5 of nitrogen is the cost of energy necessary to produce
economical method of pro ducmg pure mtrogen.
The operator can either purchase the nitrogen and compress the nitrogen. The air com~ressors f<?r
nitrogen generators can be operated WIth electrIC
generation equipment and make it a part of his plant
motors, gas turbines, or gas or diesel engi~e~. ~he
facilities or purchase the nitrogen directly from a
large nitrogen generators typically used for mJectlOn
supplier. Historically, it has been more economical to
applications require approximately 15 to 15.5 bhp/hr
purchase the nitrogen from a sup?lier since this ~as
per thousand cubic feet of pure nitrogen at 5,000
required no initial outlay of capItal, and supplIers
psig. Fig. 3 shows the various cost components of
have organizations devoted to operating nitrogen
nitrogen used in the evaluation.
plants. In each project the operator must evaluate
While the specialized nature of nitrogen generators
both alternatives. In this investigation, it was as-
results in very substantial economics of scale for the
sumed that nitrogen was purchased from a supplier.
cryogenic processing equipment, the addition of
The fundamental concept in nitrogen generation is
compressor and energy costs lessens this eff~ct
to cool air to its liquefaction temperature arid then
somewhat. Fig. 4 shows the importance of plant sIze
distill it. To provide low temperatures, a
in determining nitrogen costs. In using this figure for
refrigeration cycle is used consisting of an air
determining approximate costs for nitrogen, note
compressor, heat exchanger, and expansion turbi~e.
that the cost of power as discussed previously must
The distillation column makes up the fourth major
be added to evaluate its total cost fully.
component of the cycle. Centrifugal or reciprocating
The final factor affecting the cost of nitrogen is
compressors are used to compress the nitrogen to
location. Location has a pronounced effect on such
injection pressures.
items as accessibility for plant erection, operating
and maintenance personnel, and protection of
Factors Affecting the Cost of Nitrogen equipment against weather extremes. Specific power
Many factors affect the cost of nitrogen for cycling consumption will vary with altitude. The effect of
projects. Since some of those factors can have a these items is varied, and each location must be
substantial effect on nitrogen costs, it is important analyzed on a case-by-case basis. Since many oilfield
266 JOURNAL OF PETROLEUM TECHNOLOGY

NITROGEN
16.5; /MCF ELECTRIC
POWER
@U/KWH
25e /MCF
Fig. 3 - Typical cost components of nitrogen.
applications are in remote locations, it is important
that potential users evaluate this cost component
carefully.
Fig. 4 shows approximate costs for nitrogen at low
pressure and at 5,000 psig for an all-electric plant.
When using this figure, it is important to keep in
. mind these parameters (1) power - excluded from
cost curves (see text), (2) purity-99.995OJo nitrogen
with all water vapor removed, (3) production rate-
100% of capacity, and (4) cost basis-Oct. 1978.
The nitrogen costs used in this investigation ranged
from $0.5121Mcf for a cycling period of 4 years to
$0.450/Mcf for cycling periods of 16 years or
greater. These figures include the cost of compressing
nitrogen to an injection pressure of 5,000 psi.
Nitrogen Rejection
Like nitrogen generation, the rejection of nitrogen
from a produced gas stream after breakthrough
employs a specialized cryogenic technology. This
section will describe briefly the basic process of
nitrogen rejection and the factors that affect its cost.
Unlike nitrogen production, nitrogen rejection
usually is accomplished most economically if the
field operator owns and operates the nitrogen
rejection facility, although it can be accomplished as
a processing service provided by outside suppliers.
The primary reason for this is that the nitrogen
rejection plant must be integrated fully into existing
or planned gas processing facilities to be fully cost
effective. Much of the feed pretreatment necessary
for nitrogen rejection frequently is required for
propane or ethane recovery systems. Furthermore,
the extremely low temperatures required for nitrogen
rejection mean that propane and ethane recovery can
be accomplished within the nitrogen rejection unit.
The basic process in nitrogen rejection is the
distillation of nitrogen from the methane-rich
hydrocarbon feedstream. Since this takes place at
low cryogenic temperatures, less volatile impurities
such as water, CO 2 , H 2 S, and heavy hydrocarbons
must be removed first. Also, since distillation must
be carried out below the critical pressure (480 psig for
nitrogen), product recompression to pipeline
pressure usually is needed.
FEBRUARY 1981
40.----------------------------------,
10
10 20 30 40 ~o 6p
-
80 100
NITROGEN VOLUME - MMSCFO
Fig. 4 - Nitrogen costs.
The nitrogen rejection facility has three major
components:
Pretreating. H 2 S- and water-removal requirements
are similar to those for LPG plants. The level of
carbon dioxide that can be tolerated in the nitrogen-
rejection cold box is dependent on the hydrocarbon
composition of the feed stream. The level is generally
lower than that required for LPG plants.
Nitrogen-Rejection Cold Box. In this unit the
feedstream is cooled down to the liquefaction
temperature of the gas mixture before entering the
distillation column, where it is distilled against a
liquid nitrogen reflux. In nitrogen rejection plants
designed for cycling projects, a double distillation
column normally is used to permit the cold box to
handle a wide range of nitrogen concentrations. A
turbo expander uses the energy in part of the process
stream to provide refrigeration for the process. A
liquid methane pump normally is used to minimize
the product recompression requirements. Product
and waste streams are reheated to appropriate
temperatures before leaving the cold box. An ef-
ficient nitrogen rejection unit will recover 99% of the
methane and essentially all heavier hydrocarbons.
Recompression. The pressure of the sales gas stream
as it leaves the nitrogen-rejection cold box varies with
the concentration of nitrogen in the feed gas stream.
As the nitrogen concentration in the feed increases,
the pressure at which the sales gas is produced may be
increased. For example, in the analysis used in this
paper, at 10% nitrogen the suction pressure to the
sales gas booster compressors is 62 psia, while at 500/0
nitrogen the pressure had increased to 200 psia.
Factors Affecting Cost of Nitrogen Rejection
Like that of nitrogen generators, the cost of nitrogen
rejection plants is susceptible to economies of scale as
shown in Fig. 5.
The feed composition also can have a pronounced
effect on the cost of nitrogen rejection. Because of
the very low cryogenic temperatures involved, only
small quantities of H2 S, CO 2 , water, or heavy
hydrocarbons can be tolerated in the nitrogen-
rejection cold box. Since the amount of ethane and
267

10 20 30 40 50 60
FEED GAS CAPACITY - MMSCFD
Fig. 5 - Nitrogen rejection costs.
propane can affect the tolerable level of these
components, the design of the pretreatment system
will vary from case to case.
Another factor which will affect the cost of
nitrogen rejection is the feed gas pressure. Rejection
is done most efficiently with a feed pressure of ap-
proximately 500 psig; however, there are a number of
trade-offs which should be analyzed when the feed
gas stream is available at some other pressure. If the
feed gas is at a higher pressure, there are methods by
which the additional energy available can be used to
increase the sales product pressure. On the other
hand, if the feed composition is available at a lower
pressure, other process cycles must be considered
before a final decision is made.
The required pressure for the sales gas also will
affect costs. In most instances pressure will be
determined by the existing or planned pipeline
contracts; however, in cases where the producer
desires to reinject nitrogen recovered from a rejection
plant, the cost of the total system, including both
sales gas recompression and nitrogen recompression,
must be analyzed over the life of the project to ensure
that costs are minimized.
Nitrogen rejection can be most efficient in the
utilization of capital and operating dollars when
approximately 3010 nitrogen is allowed to remain in
the sales gas stream. However, significant savings
can occur by delaying commencement of nitrogen
rejection. This can be accomplished by blending the
produced gas containing nitrogen with other streams,
restricting production from wells producing at high
nitrogen costs, using high-nitrogen-concentration
wellstreams for plant fuel, or negotiating less
restrictive sales gas contracts. Any delay in starting
nitrogen rejection will enhance total project
discounted net income.
Another factor which will affect rejection costs is
whether or not the process will be integrated with
other gas processing requirements. Although the
Z68
total cost of the nitrogen-rejection cold box will
increase when other process requirements are added
to it, the total cost of all gas processing will be
decreased markedly.
The final factor that will influence the cost of
nitrogen rejection is the cost of energy. Since the
total horsepower requirements for nitrogen rejection
depends on all the factors previously mention, it is
not possible to provide a general quantification for
the total power required for a nitrogen rejection
plant. The primary uses of power are product
precompression (if necessary), power required for
pretreatment (such as amine and mole sieve
regeneration), power required for methane pumps,
and power required for compression of sales gas to
pipeline pressure.
80 100 Nitrogen Rejection Costs for Study
For the cases evaluated for this paper, the nitrogen
rejection plant was based on a maximum 30 MMcflD
of raw feed at 500 psig. The feed gas included no
Hz S, a small amount of CO z , and various quantities
of C 1 , C z , C 3 , and C 4 . All of the heavier com-
ponents were removed in the warm processing
equipment. To reject the nitrogen from this feed-
stream and compress the sales gas stream to 1,000
psig pipeline pressure, the equipment used would
include a freon unit, mole sieve dryer, nitrogen-
rejection cold box, and product compressors. Power
required by the freon chiller and dryer are 40 and 200
kW, respectively, while the power required for the
product pump would begin at approximately 40 kW
and gradually decrease as the project continues.
Product compression started at 5,400 bhp and
decreased over the life of the project. Total capital
costs of the installed equipment, excluding product
recompression, was approximately $1 ,900,000.
Operating costs for nitrogen rejection equipment
in this study was $42,000/yr plus a compression
charge of $0.08/Mcf of sales gas produced.
Fig. 5 shows the approximate cost of a nitrogen
rejection plant including freon chiller, mole sieve
dryer, cold box, and installation costs. It is important
to note, however, that no costs are included for
removal of Hz S, CO z , or heavier hydrocarbons or
for sales gas compression.
Basic Economic Parameters
The various component costs and product prices vary
throughout the industry for many reasons. The cost
and price data used in this investigation were felt to
be reasonable with both higher and lower values
existing. When comparing specific projects with
results presented in this paper, cognizance should be
taken of any variations which exist between com-
ponent costs and product prices used and those
applicable to the specific project considered.
The basic component cost and product prices used
in this paper are presented in Table 4. Note that the
sales gas price shown in Table 4 is $1.75/Mcf.
However, in the economic projections a cost of
$0.04/Mcf was attributed to compression cost from
the plant to the sales line on the pressure depletion,
residue gas injection, and the nitrogen injection prior
JOURNAL OF PETROLEUM TECHNOLOGY
 TABLE4- ECONOMIC FACTORS

Capital Investments
Thousands of Dollars
Pressure Cycling Cycling
Item Depletion Residue Gas Nitrogen
Producing wells 13,500 9,000 9,000
Injection wells 0 4,500 4,500
LPG plant 3,600 3,600 3,600
Nitrogen rejection plant 0 0 1,900
Field booster compressors 100 100 100
Injection compressors 0 1,170to 1,365 0
Total 17,200 18,370 to 18,565 19,100

Operating Costs
Producing wells, $/yr/well 13,000
Injection wells, $/yr/well 13,000
LPG plant, $/yr 723,000
Nitrogen rejection plant, $/yr 42,000
Field booster compressors, $/yr 42,000
Injection compressors, $/yr 457,000 to 533,000
Sales line booster compressor, $/Mcf
Without nitrogen rejection 0.04
With nitrogen rejection 0.08
Nitrogen purchase, $/Mcf 0.450to0.512
Makeup gas purchase, $/Mcf 1.75

Prices and Royalty

Sales gas, $/Mcf 1.75
Condensate and C 5 , $/bbl 13.00
C 3 and C 4 , $/bbl 8.50
Royalty, % 16.7

to nitrogen rejection. This results in a net gas sales

price of $1.71/Mcf. In the nitrogen injection cases, DIFFERENTIAL DISCOUNTED NET INCOME
this compression cost as mentioned previously was
1401------,
_----+----+----+
increased to $O.08/Mcf after nitrogen rejection
commenced because of the lower suction pressure,
resulting in a net gas sales price during this period of
$ 1. 67/Mcf. en 1201-------jI------+-----+----++----,I---I
0::
<C
-'
-'
Comparison of Economic Projections o
10011-_ _ _~--~1_--~--~~~--~
lL.
In evaluating alternative methods of depleting a o
reservoir, comparisons should be made between the en
:z
o
optimum design of each method. In this in- j 80~---I__--__+---__+-~~Lf-l--~
vestigation, discounted net income was used as the 2;
optimizing criterion.
The results of economic projections for those cases ....
~ rol-----I------+---~~~~~----4
which yield a maximum discounted net income are u
:z
summarized in Table 5. It has been assumed that ~
w
costs and prices will escalate at a rate of 6070 per year ~ 401----I_----+--.I-~~~-_+----4
for the project life. w
~
In all cases investigated, a greater discounted net :z
:::>
o
income was obtainable with nitrogen injection than ~ 20~---I__--~~~~__+---_+---~
with injection of residue gas. Both injection -'
<C
programs generated more net income than the i=
:z
corresponding pressure depletion operation for all w
~ or----~~7'~~----__+------_+-------1
cases studied. lL.
lL.
Pressure maintenance by nitrogen injection proved Ci
to be economically superior to the other two methods -201----1_----+-----+---_+----4
of depletion for all degrees of reservoir heterogeneity
investigated for Fluids A and B. Economic
projections of Fluid C (the fluid with a stock-tank
-40 0!-------:5l::-0-------:::100;:-------:!:15:::-0-------:2:!:00;:------~250
liquid yield of 76.1 bbllMMcf) indicate maximum
STOCK TANK LIQUID CONTENT' BBLS/MMCF
discounted net income under primary depletion. This
fluid does not have sufficient retrograde loss to Fig. 6 - Minimum stock-tank liquid content for nitrogen
justify either injection method studied. injection.

FEBRUARY 1981 269

 TABLE 5 - SUMMARY OF ECONOMIC PROJECTIONS

Net Working
Cycling Total Operating Capital Interest Discounted
Life Income Cost Investment Income Net Income, 15%
Case Identification (years) (M$) (M$) (M$) (M$) (M$)
Fluid A
Pressure depletion 0 420,180 50,765 17,200 352,216 160,964
R=5
Nitrogen injection 20 1,140,043 229,913 19,743 890,387 295,578
Residue gas injection 8 1,012,172 167,137 18,565 826,470 218,239
R= 10
Nitrogen injection 19 1,084,648 230,223 19,599 834,826 272,129
Residue gas injection 7 908,530 148,678 18,565 741,286 207,172
R=20
Nitrogen injection 16 974,348 209,809 19,463 745,076 248,205
Residue gas injection 6 817,405 132,300 18,565 666,540 197,658
Fluid B
Pressure depletion 0 497,370 54,810 17,200 425,360 175,604
R=5
Nitrogen injection 12 886,170 149,176 19,895 717,099 225,744
Residue gas injection 6 847,308 119,387 18,435 709,485 174,971
R= 10
Nitrogen injection 7 752,994 121,333 19,743 611,918 210,618
Residue gas injection 5 774,468 106,909 18,435 649,124 172,388
R=20
Nitrogen injection 4 663,975 104,407 19,599 539,969 199,920
Residue gas injection 4 708,726 95,272 18,435 595,019 171,431
Fluid C
Pressure depletion 0 553,563 59,097 17,200 447,266 175,634
R=5
Nitrogen injection 7 742,580 113,055 19,895 609,630 181,196
Residue gas injection 7 879,075 118,235 18,370 742,469 132,047
R= 10
Nitrogen injection 6 722,689 119,368 19,743 583,579 173,376
Residue gas injection 6 817,656 107,336 18,370 691,950 133,728
R=20
Nitrogen injection 5 697,222 114,139 19,599 563,484 167,840
Residue gas injection 5 762,373 97,221 18,370 646,782 136,959

A plot of differential discounted net income Retrograde Condensate Reservoirs," J. Pet. Tech. (Feb. 1981)
between nitrogen injection and pressure depletion is 256-262.
presented in Fig. 6. This figure indicates that with the 3. Muskat, M.: "Effect of Permeability Stratification in Com-
plete Water-drive Systems," Trans., AI ME (1950) 189, 349-
economic factors used in this study the liquid content 358.
which a reservoir fluid must have to justify pressure 4. Dyes, A.B., Caudle, B.H., and Erickson, R.A.: "Oil
maintenance by nitrogen injection will range between Production after Breakthrough as Influenced by Mobility
65 and 96 bbl/MMcf for corresponding hetero- Ratio," Trans., AIME (1954) 20181-86.
5. Wilson, K.: "Inert Gas Processes for Enhanced Recovery
geneity indices of 5 and 20. Compared," Oi/and Gas J. (July31, 1978) 162.
It is our conclusion that gas-condensate reservoirs
with liquid contents of approximately 100 bbl/MMcf SI Metric Conversion Factors
or greater should be evaluated to determine if acre x 4.046
873 E+03 m2
pressure maintenance by nitrogen injection is bbl x 873 E-Ol
1.589 m3
economically attractive. Economic factors associated bhp x 999 E-Ol
7.456 kW
with a specific prospect which differ substantially cu ft x 685 E-02
2.831 m3
from those used in this investigation would alter this OF CF - 32)/1.8 C
limiting liquid content value. ft x 3.048* E-Ol m
psi x 6.894 757 E+OO kPa
References scf x 2.863 640 E-02 std m 3
*Conversion factor is exact. JPT
1. O'Dell, H.G. and Miller, R.N.: "Successfully Cycling a Low-
Permeability, High-Yield Gas Condensate Reservoir," J. Pet.
Original manuscript received in Society of Petroleum Engineers office July
Tech. (Jan. 1967)41-47. 26, 1978. Paper accepted for publication May 18, 1979. Revised manuscript
2. Moses, Phillip L. and Wilson, Keith: "Phase Equilibrium received Dec. 30, 1980. Paper (SPE 7494) first presented at the SPE 53rd Annual
Considerations in Using Nitrogen for Improved Recovery From Technical Conference and Exhibition, held in Houston, Oct. 1-4, 1978.

270 JOURNAL OF PETROLEUM TECHNOLOGY