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Brisbane-based Senex Energy has commenced the Phase 2 drilling campaign at its flagship Western Surat gas project, designed to deliver coal seam gas from north of Roma in Queensland.

Located in the onshore Surat basin, the campaign involves the drilling of 30 wells on the Glenora and Eos blocks, situated directly north of the Gladstone liquefied natural gas project’s (GLNG) producing Roma field.

The Santos-led GLNG development produces natural gas from Queensland’s coal seams and converts it into LNG, and Senex has a gas sales agreement with the GLNG joint venture to supply up to 50 TJ/d of gas from the Surat project over 20 years.

Phase 2 drilling will be undertaken over the remainder of the calendar year with the first wells expected online in Q1 FY18.

Senex has locked in pricing with suppliers for a significant proportion of the AU$50 million Phase 2 work program which includes the construction of gas and water handling infrastructure.

A number of contractors local to the Roma region are involved in delivering the work program.

Director and CEO Ian Davies said the company was focused on executing the work program on schedule and on budget.

“We are working hard alongside our suppliers to set Phase 2 up for success. Senex will take the opportunity to fully embed its design, contracting and execution methodology on the Phase 2 work program ahead of its transition to full field development,” he said.

Senex holds 100% interest in and operatorship of the Western Surat gas project, expected to support up to 425 wells. The firm delivered first gas from the project in 2016, with first appraisal wells online as part of the pilot program. 

In February, Senex announced that it had formed a partnership with specialist energy investor EIG Global Energy Partners, which will see the latter fund up to US$300 million for Western Surat gas project acceleration.

Under the terms of the agreement, EIG became a substantial shareholder in Senex, holding 12.2% of Senex’s issued share capital. A total of $55 million was raised through the institutional placement to EIG.

During the March quarter, Senex recorded 14% lower sales revenue of AU$11 million.

Image: Map of Western Surat Gas Project / Senex

Sunday, 11 June 2017 21:37

Inpex sheds interest in PNG block

Japanese exploration and production company Inpex said it has sold 40.1% participating interest in the onshore production block PDL3 in Papua New Guinea (PNG) to Kumul Petroleum. 

The interest is held by its joint venture Tokyo-based Southern Highlands Petroleum, in which Inpex holds a 10% share.

Inpex acquired shares in the block in 1990 through investing in Southern Highlands.

It has taken part in production and operation activities in the SE Gobe oil field in the Papuan basin, which straddles PDL3 and the adjacent block PDL4.

PDL3 is approximately 450km northwest of Port Moresby, the capital of PNG. As of December 2016, the project produced 900 bbl/d of oil and 40 MMscf of natural gas.

Kumul already holds 5.6% interest in the Santos-led (15.9%) block, along with joint venture partners Oil Search (36.4%) and Southern Highlands (40.1%).

This is Inpex's second asset sale for the year. In March, the Ichthys liquefied natural gas operator decided to sell its Indonesian subsidiary, Inpex Natuna, to PT Medco Daya Sentosa.

Medco is a subsidiary of PT Medco Energi Internasional Tbk., a listed Indonesian energy company.

Inpex Natuna holds 35% participating interest in the South Natuna Sea block B, located 1200km north of Jakarta, Indonesia, in the Natuna Sea where the water depth is approximately 50-55m.

The average production rate for the block for the year 2016 was approximately 20,000 bbl/d of crude oil, 197 MMscf/d of natural sales gas and 6000 bbl/d of liquefied petroleum gas.

The block’s participating interest ratio prior to the sales of shares is Inpex 35%, Medco E&P Natuna 40% (operator) and Chevron 25%.

This sale comes after Inpex signed a series of agreements in the same month, concerning the transfer of operations for the offshore Mahakam block with Pertamina and Total.

Inpex is currently engaged in the development and production of oil and natural gas in the Mahakam block in partnership with Total, the operator.

Both companies are pursuing discussions with Pertamina and the Indonesian government authorities with the aim of participating in the Mahakam block after the current production sharing contract expires at the end of 2017.

The agreement will see the transfer of operatorship from Total to Pertamina and includes measures to facilitate the latter’s steady operations as operator in the Mahakam block from January 2018.

Image: Blocks PDL3 and PDL4 location / Inpex

Wednesday, 07 June 2017 22:56

Waitsia stage 2 enters FEED

Operator AWE and its joint venture partner Origin Energy have agreed to commence the design competition phase of front-end engineering design (FEED) for Stage 2 of the Waitsia gas project.

Located in the production license L1/L2 in the Perth basin of Western Australia, Waitsia is a 50:50 partnership between both companies.    

The design competition for Waitsia Stage 2 facilities will include a gas plant capable of processing 100 TJ/d, CO2 extraction, collection hubs, and flow lines.

The four contractors selected to proceed to the design competition, which will commence immediately, are Quanta/Suez (EPC), ATCO Australia (BOO), SNC-LAVALIN (EPC/BOO), and Clough (EPC).

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

“A design competition is the best way for the Waitsia joint venture to compare the various aspects of EPC [engineering procurement construction], and BOO [build own operate] delivery methods while at the same time ensuring a high degree of certainty around the capital cost component,” said David Biggs, CEO of Sydney-based AWE.  

“In addition, AWE is currently drilling the Waitsia-3 appraisal well – the first of a two well program which will facilitate a review of Waitsia reserves – and we are negotiating gas sale arrangements with a number of potential customers.

“When developed, Waitsia will provide around 10% of Western Australia’s gas demand. Recent market shows that the Western Australian gas market is tightening, with new sources of gas required to meet domestic demand. Waitsia offers potential customers increased competition, diversity of supply, and improved security of supply by offering a lower risk onshore supply chain,” he added.

Earlier this week, AWE announced that the Waitsia-3 appraisal well was at 2782m measured depth below rotary table (MDRT) and preparing to drill ahead. The well will be drilled in a 216mm hole to the primary target, following the installation of a 244mm intermediate casing at 2779m MDRT.

Waitsia-3 was spudded on 19 May and is forecast to take approximately seven weeks to complete. The well will be drilled vertically to a planned total depth of 3706m MDRT and is designed to appraise the gas potential in the southern extension of the Waitsia field.

It will target the conventional reservoirs in the Kingia and High Cliff sandstones, and the sandstone reservoirs of the Irwin River coal measures. If the results are positive, the well will be completed as a production well and a flow test may be performed.

Stage 1A of the Waitsia gas project comprised the installation of new infrastructure to connect the Waitsia-1 and Senecio-3 gas wells to the upgraded Xyris production facility (XPF). The XPF was commissioned last August and production capacity of 10 TJ/d was achieved.

Currently, gas produced from Stage 1A is being sold to local electricity supplier Alinta Energy via the Parmelia pipeline. The firm is taking up a maximum daily quantity of 9.6 TJ/d under a 2.5-year gas sales agreement.

Image: AWE onshore Perth basin / AWE

Monday, 05 June 2017 22:00

Rosneft, BP ink gas pact

UK-based BP has signed a deal with Russian oil major Rosneft for the supply of additional Russian gas supplies to European markets starting from 2019.

According to the agreement, Rosneft and BP’s wholly-owned subsidiary, BP Gas Marketing, will enter into a long-term sale and purchase agreement for the delivery of natural gas produced by Rosneft.

In addition, the duo will partner to develop integrated cooperation in gas and aim to jointly implement gas projects in Russia and abroad focused on gas exploration and production, liquefied natural gas (LNG) production, supply, and marketing.

President of BP Russia David Campbell said shifting to gas is one of the pillars of BP’s strategy. “It is important in order to meet the increasing demand for cleaner energy. Gas is a growing proportion of BP’s portfolio and by the middle of the next decade we expect around 60% of our production to be gas, compared with around 50% today,” he said.

Rosneft CEO Igor Sechin said the firm intends to further increase gas production levels in the coming years. “Cooperation with BP would provide Rosneft with both a new efficient gas monetization channel and the conditions required for the development of a new resource base including hard to recover gas reserves,” he added.

The BP-Rosneft pact, which was signed at the 21st St Petersburg International Economic Forum on 2 June, also saw Rosneft sign other energy cooperation agreements at the event, expanding foothold in Asia.

The Russian giant inked a deal with Thai oil company PTT Public Co. for the long-term supply of 200 MMT oil till 2037. This partnership will allow Rosneft to tap into one of the most attractive, energy-hungry markets in the Asia-Pacific region.

Moreover, both companies plan to jointly conduct studies to identify business opportunities in the areas of upstream, downstream, LNG, trading, as well as natural gas preparation, storage, and logistics.

Rosneft signed an agreement with PNOC Exploration Corp. (PNOC-EC), a state-owned Philippine national oil company, for the development of multilateral cooperation in oil and products trading, in addition to joint participation in oil refining projects.

Both companies are looking to sign a long-term contract in the near future for the delivery of Russian crude oil to PNOC-EC. 

Image: BP and Rosneft agreement signing / Rosneft