Investment: Chevron’s Gorgon facility in Western Australia Photo: CHEVRON
Operators investing billions of dollars in targeting LNG and domestic markets - and oil offshore
Billions of dollars are being invested in new offshore projects in Australia by operators targeting the liquefied natural gas and domestic markets, while a major oil project is taking shape in a new offshore region.
The operators leading the way are established names developing more offshore gas to keep their LNG trains full — Woodside, Chevron, Shell, ConocoPhillips and Inpex.
On the other side of Australia, in waters off the state of Victoria, the dominant operators ExxonMobil, Cooper Energy and Beach Energy are developing smaller gas fields to supply the hungry domestic gas markets in the eastern states.
ExxonMobil plans to start development drilling in early 2020 at the West Barracouta field, and Cooper Energy is just about ready to turn on the taps at the Sole field, while Beach will drill a host of new development wells at its Thylacine and Geographe fields.
Large standalone offshore projects are being developed off Western Australia and Northern Territory, including Woodside’s Scarborough and Browse, ConocoPhillips’ Barossa and Shell’s Crux.
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Scarborough and Barossa are targeting final investment decisions in the coming year. Browse is not far behind and Crux is also aiming for 2020.
These three projects alone represent total capital expenditure approaching US$30 billion.
Eni, meanwhile, has thrown its weight behind the Evans Shoal gas project, in an apparent competition with ConocoPhillips’ Barossa to provide backfill into the Darwin LNG plant.
The expansion of existing producing fields is moving at full tilt too.
The Chevron-led Gorgon joint venture is investing heavily in the Gorgon Stage 2 upstream project and the Jansz-Io compression scheme, both of which are aimed at boosting and maintaining the volumes of gas being sent to the three Gorgon LNG trains on Barrow Island.
In an Australian first, Jansz-Io will use subsea compression to maintain gas production rates from the Jansz-Io field as reservoir pressure drops over time.
Aker Solutions, which pioneered subsea compression in Norway, was recently awarded a master contract to deliver the Jansz-Io system, which will include an unmanned power and control floating platform.
Meanwhile, Japanese operator Inpex is fully committed to the upstream expansion of the Ichthys field, recently awarding a three-year drilling contract for a new batch of production wells, and is scheduled to award subsea equipment contracts soon.Challenges
There are several other proposed standalone gas developments, including PTTEP’s Cash-Maple and Western Gas’ Equus, with both operators optimistic about meeting their project viability challenges.
The only proposed oil development in Australia is Santos’ Dorado discovery in the shallow-water Bedout basin.
Dorado was the biggest upstream story of 2018, confirming a new offshore oil province and creating a buzz about the discovered play and surrounding areas.
Dorado-1 was drilled as a gas exploration well but instead hit a large oil column as well as gas and condensate in other intervals.
The oil volume is 171 million barrels of oil on a gross best estimate contingent basis. The gas volume is 552 billion cubic feet on the same basis, along with 16 million barrels of condensate for good measure.
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The same permits contain the Roc, Phoenix and Phoenix South gas and condensate accumulations.
Santos and joint venture partner Carnarvon Petroleum are currently drilling the first of two Dorado appraisal wells plus the Roc South-1 exploration well to test a prospect analogous and adjacent to Dorado.
Santos is keen to bring Dorado on stream as soon as possible via an early production system and, accordingly, is targeting front-end engineering and design next year.
The development concept is jack-up drilled deviated production wells tied back to a floating production, storage and offloading vessel the size of which will be clarified following the current drilling campaign with the jack-up Noble Tom Prosser.