Leni Enters Enhanced Oil Recovery Project in Spain
Leni has entered into a Heads of Agreement with Praxair for a nitrogen enhanced oil recovery ("EOR") pilot project in Spain.
- Heads of Agreement signed with Praxair ES for a nitrogen injection enhanced oil recovery pilot project in the west flank of the Ayoluengo upper Jurassic reservoirs in Spain
- Period of exclusivity to negotiate and complete a definitive agreement, including an execution plan for the requirements of both companies to the project
- Nitrogen injection enhanced oil recovery methods can substantially increase overall recoverable reserves by 33%
- Ayoluengo upper Jurassic west flank reservoirs have OIIP of 27.31 mmbo with only 1.4 mmbo produced historically and currently not producing
- Construction of facilities expected to start at the end of 2010 and injection planned to commence at end Q1 2011 with EOR performance evaluated during 2011
Nitrogen Injection Enhanced Oil Recovery
LGO has identified from the recently completed geotechnical review of its Spain acreage that complementary artificial stimulation methods to mobilize the oil within the various producing Ayoluengo Upper Jurassic reservoirs should be used to maximize total recoverable reserves.
Nitrogen enhanced oil recovery projects have the dual advantage of minimum environmental impact and maximum reservoir mobilization efficiency. Liquefied nitrogen is easier to produce and transport than carbon dioxide and does not incur large drainage of water aquifers for reservoir pressurization or flood projects. Nitrogen, being inert, does not have a corrosive effect on well integrity and can be used for both reservoir repressurisation and to support water or polymer flood projects.
The Heads of Agreement with Praxair sets out the proposed terms of a Definitive Agreement and Project Execution Plan between the companies for Praxair to provide nitrogen and equipment for the pilot EOR project, and LGO to conduct the design and operation of the injection facilities into the west flank of the Ayoluengo upper Jurassic sands. The west flank currently has no existing production with OIIP of 27.31 mmbo and a low historical recovery factor below 5%.
The existing Ayoluengo production is from the east flank upper Jurassic reservoirs with OIIP of 79.39 mmbo and historical recovery of 21%. The Company is currently undertaking complementary exploitation projects to increase the productivity and drainage radius of all wells in the east flank.
Typically nitrogen EOR projects can increase overall reservoir recovery by 33% depending on the method of injection and reservoir characteristics.
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