Here's a reason gas injection should give you nightmares

Gas injection turns into trespass

What happens when an innocent gas flood goes horribly wrong? Here's how the AER sorts it out.

Without AppIntel, how would you know about this potential trap for gas injection and storage schemes? And how would you know how to fix them?

The owner of this gas storage scheme started injecting hoping to recover NGL from a depleted reservoir. Years later, this application centers over trespass from another operator. From these application documents you can see how the regulator treats such disputes.

In the application documents, you can see

• the combatants,
• the injection volumes,
• the trespass accusation,
• the time period of injection,
• the UWI of his injector, and
• the regulator's decision.

Help yourself from our self serve application service.

The promise of gas storage

Gas is stored in a volumetric reservoir in the summer and produced back out in the winter. The price differential between summer and winter prices allows a bit of price arbitrage.

Usually operators store gas in a condensate or oil reservoir with high permeability hoping that the pressure cycles will bring out more liquids. The liquid production adds significant profit to the gas storage scheme.

There's a hole in my pocket

But if the gas storage reservoir springs leaks, the stored gas might be lost to other reservoirs. Like a hole in your pocket, your precious commodities could end up found my someone else.

If gas storage pressures over come the minimum miscible pressure for the fluid system you might recovery significant additional liquids.

How to resolve trespass issues

Dallin Oaks, a judge of the Utah Supreme Court, has said that the worst deal you can make out of court is better than the best judgement you might receive in court.

How do you find precedents for AER hearings on this type of subject? They are not included in CANLII. There are so few of them that no litigation lawyer knows them.

The only way to find them is through AppIntel. AppIntel is a search engine for AER applications.

Tags: Gas Injection, Flood, Compliance

Granger Low  26 Jul 2017

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