New equations for the two phase flow of water and steam are presented. The new equations coincide with those already in use for the case of horizontal flow but are different from those for vertical flow. It is shown that the usual equations can only be valid when the two phases are flowing in separate channels, where the channel dimensions are large compared with the grain size of the porous media, and in such a case the relative permeabilities should vary only slightly with the saturation ratio. It is shown that the actual variation of relative permeabilities with saturation ratio suggests a flow model where the flow channel dimensions are of the same order of magnitude as the grain size. On this basis a new set of equations is proposed, which with the associated flow model explain relative permeabilities qualitatively. In addition they show that water can flow upwards in two phase flow where the pressure gradient is less than hydrostatic. In a simple two phase flow test it is demonstrated that this happens as predicted by the new equation set.

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