A new and innovative experimental setup for investigating borehole integrity issues is presented. The setup comprises an X-ray transparent high-pressure cell with separate and independent controls on pore pressure, confining pressure, and casing pressure. This allows the setup to mimic a scaled down wellbore system, hence setting ground for studies at realistic field conditions. X-ray computed tomography (CT) is used to provide 3D visualization and quantification of both stress-induced fractures and debonding of the cement sheath (from casing and formation) at in-situ conditions. The pressure cell accommodates a steel tube at the center simulating the well casing which is cemented to a surrounding rock. Each concentric layer of material within the cell, i.e., the inner steel tubing, the surrounding rock and the confining sleeve, can be separately pressurized through dedicated ports in the cell's endcaps. In this work, the setup and the results from some of the initial tests carried out are reported. The application of different amounts of pressure to the inner and outer casing induces fractures in the cement and surrounding rock formation. Results show the evolution of radial cracks in the cement sheath and the sandstone with increased casing pressure, with and without confining and pore pressure. The findings indicate fundamental differences between the outcome of the experimental results where pore and confining pressures are applied in addition to only the casing pressure which has been the conventional approach in this type of studies so far. By applying pressure difference between the well and the rock formation, geometry and permeability of the stress-induced fracture network can be analyzed. The measured parameters, together with the geometry of the cracks recorded in these experiments provide a consistent and valuable input for numerical simulations and set the ground for addressing remediation and mitigation challenges.