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Monday, 03 July 2017 22:26

AWE in Waitsia-3 gas find

Australian energy company AWE said it anticipates booking additional Waitsia reserves in the second half of 2017, following the successful appraisal of the Waitsia-3 well, the first of a two-well drilling program planned for the field in Western Australia’s onshore Perth basin.

Preliminary analysis of wireline log and pressure data from the well has confirmed the southern extension of the Waitsia gas field by encountering strong gas shows across a 150m gross interval including the Kingia and High Cliff Sandstone reservoir targets.

“The substantial thickness of the Kingia reservoir, combined with exceptional porosity, net pay and low levels of total inerts, confirms excellent reservoir quality in the southern extent of the Waitsia field,” said CEO David Biggs.

“The observation of gas below the previously interpreted GWC may have positive implications for the rest of the field and provide new appraisal and exploration opportunities within the permit.

“We will continue our analysis and evaluation of the Waitsia-3 data, but we are already looking ahead to the Waitsia-4 appraisal well which is expected to spud in the first half of July.

“The combined data from Waitsia-3 and Waitsia-4 will allow us to review our estimated Reserves and Resources for the entire Waitsia field and, subject to Waitsia-4 results, we anticipate a further upgrade to Reserves within the second half of 2017,” he added.

Waitsia-3 was spudded on 19 May, ahead of schedule and under budget. It is the first of a two-well appraisal drilling program designed to appraise the gas potential in the southern extension of the Waitsia field. The Enerdrill Rig 3 is currently being redeployed to the location of the second well, Waitsia-4.

The Waitsia gas project is a 50:50 joint venture (JV) between operator AWE, and Origin Energy. Capable of supplying the domestic market with 100 TJ/d for 10 years from conventional reservoirs, the Waitsia field is regarded as the largest onshore conventional gas discovery in Australia.

In June, the JV agreed to commence the design competition phase of front-end engineering design (FEED) for Stage 2 of the project which includes a gas plant, CO2 extraction, collection hubs, and flow lines. The four contractors selected to proceed to the design competition are Quanta-Suez, ATCO Australia, SNC-Lavalin, and Clough. 

AWE is targeting completion of all phases of FEED by the end of 2017, prior to achieving a final investment decision. 

Image: AWE onshore Perth basin / AWE

Sunday, 02 July 2017 23:13

Prelude FLNG sets sail for Australia

Shell’s Prelude floating liquefied natural gas (FLNG) facility has reached a major milestone, leaving South Korea and starting its journey to Western Australia, where the next phase of the mega project will commence.

The 488m long facility said to be longer than four soccer fields, left the Samsung Heavy Industries shipyard in Geoje on 29 June, and is en route to the Prelude offshore gas field, 475km north-north east of Broome.

On arrival at its new home, the hook-up and commissioning process will begin, as soon as the pre-installed mooring chains are lifted from the seabed and secured to the facility.

Shell said Prelude FLNG is an important project in its portfolio. It will provide LNG for customers around the world and generate cash flow that will help drive the performance of its integrated gas business. Cash flow from the project is expected in 2018.

The super major holds majority stake in the joint venture with 67.5% interest. Other partners include the Australian subsidiaries of Inpex (17.5%), Korea Gas (10%) and CPC Corp. (5%).

Prelude is designed to enable the exploration of 3 Tcf of gas resources that were previously uneconomic or constrained by technical or other risks. The facility will stay permanently moored for 25 years at the Prelude gas field, and in later development phases produce from other fields in the area where Shell has an interest.

It is expected to produce at least 5.3 MTPA of liquids, 3.6 MTPA of LNG, 1.3 MTPA of condensate, and 0.4 MTPA of liquefied petroleum gas (LPG). According to Shell, many of the technologies used on the FLNG facility are ones that it has used successfully onshore, but some have been extended or modified for offshore. 

The new technology that has been developed for FLNG includes LNG tanks that can handle sloshing, close coupling between the producing wells and the LNG processing facility; LNG offloading arms, water intake risers, mooring systems; and the maximization of processing equipment such as absorption columns and the main cryogenic heat exchangers. Furthermore, Prelude has been built to withstand the severest cyclones - those of Category 5.

Speaking at the LNG 18 conference in Perth, Australia, last April, Shell CEO Ben van Beurden said Prelude is now a standardized design. Depending on the composition and location of gas reservoirs, Shell can add different pre-designed topside modules and offloading systems.

“Prelude is designed to export LNG, LPG and condensate from resource-rich gas fields. But there are also a lot of so-called lean gas fields which do not produce as much LPG and condensate. To produce more LNG instead, we’ve made some changes to the Prelude design and developed FLNG Lean. We expect FLNG Lean to be cost competitive for larger, lean gas fields,” he explained. 

Image: Prelude FLNG / Shell 

Tuesday, 27 June 2017 22:32

Tag preparing to drill Pukatea prospect

Canada-based Tag Oil has commenced civil works to upgrade road access and drilling pad to support the drilling of the Pukatea-1 exploration well onshore New Zealand in the third quarter of 2017.

Located in the Taranaki basin, the well is within the PEP51153 permit area which is a joint venture between Tag (70%) and ASX-listed Melbana Energy (30%).

Webster Drilling's Nova-1 rig has been hired to drill the Pukatea prospect, scheduled to commence late October, early November.

Melbana said Pukatea is a mature high impact exploration opportunity, targeting a highly productive conventional reservoir ranging from 1.3-40 MMboe and with a best estimate of 12.4 MMboe.

Moreover, the prospect is well located, being proximal to existing infrastructure with a number of potentially near-term low-cost alternative development paths.

Melbana estimates that a successful Pukatea-1 exploration well result consistent with the best estimate of 12.4 MMboe would result in a three well development plan with a gross production plateau ranging between 6000-10,600 bo/d for four years.

A very low development cost production of oil and associated gas is expected to be processed locally using existing underutilized or new infrastructure and sold into oil exported and natural gas markets. The PEP51153 permit covering 85sq km is located to the east of Tag’s producing Cheal field and its nearby production complex.  

Three wells have been drilled since the Puka oil field was discovered in 2012, with the Puka-1 and Puka-2 wells producing 100 bo/d from the Mt. Messenger formation before being shut in due to low oil prices and mechanical issues.

“The Pukatea prospect is a deeper Tikorangi Limestone target situated directly below the Puka oil pool. The production capability from the Tikorangi Limestone has been well proven at the adjacent Waihapa oil field which has produced in excess of 23 MMbbl of oil to date,” Melbana said in a statement.

“The Douglas-1 well drilled in 2012 at the edge of the Pukatea prospect encountered a 145m of reservoir interval and oil shows in a down-dip location, with more than 350m of up-dip potential estimated,” it added.

Image: Map of PEP51153 permit / Melbana

Australian energy giant Santos announced the launch of a new strategic partnership with existing Chinese investors ENN Group and Hony Capital.

ENN, a gas distributor, and Hony, a private equity firm, are associated shareholders of Santos with an aggregate interest of 15.1% of Santos shares.

Based on mutual cooperation and assistance, the new arrangement will see the joint investment in gas exploration and liquefied natural gas (LNG) production in Australia and Papua New Guinea (PNG)

The parties agreed that the new partnership will become effective and remain in effect for so long as ENN and Hony have a relevant interest in 15% or more of Santos shares.

Santos chairman Peter Coates said Hony became a major shareholder in 2015 and together with ENN has continued to support Santos through challenging times.

“We look forward to a closer relationship with Hony and ENN and their support for the continued growth of Santos for the benefit of all shareholders," he said. 

Wang Yusuo, founder, and chairman of ENN said ENN and Hony strongly support the new growth strategy of Santos under the leadership of CEO Kevin Gallagher and the Santos board.

“The strategic relationship will effectively link up the upstream E&P competence of Santos with China's fast growing downstream market of natural gas, and explore many opportunities for Santos to realize its full potential as a leading producer of gas and LNG,” he added 

As part of the move, Eugene Shi will join the board as a non-executive director. Shi is vice president of ENN Ecological Holdings, a subsidiary of ENN, and has more than 20 years of experience across capital markets, mergers and acquisitions, and business development. 

Santos is focused on five core, long-life natural gas assets: Cooper basin; Gladstone LNG (GLNG); PNG; Northern Australia, and Western Australia. The firm expects 2017 sales volumes to be in the range of 73-80 MMboe and production to be between 55-60 MMboe.

In 2016, the GLNG operator recorded a 31% increase in annual sales volume of 84.1 MMboe, and 7% higher annual production of 61.6 MMboe. Due to the ramp-up of GLNG and strong performance at PNG LNG and Darwin LNG, 2016 LNG sales increased by 89% to 2.8 million ton and LNG revenue hit $887 million.

Image: Santos GLNG workers / Santos