Industry News

THE offshore oil and gas regulator has issued a draft recommendation on decommissioning of oil and gas rigs, which is open for public comment after former resources minister Matt Canavan issued a ‘statement of expectations’  in November that it step up oversight of decommissioning activities.

All this already comes under section 572 of the Offshore Greenhouse Gas Storage Act but the National Offshore Petroleum and Safety Authority has outlined how it plans to oversee and enforce the section in more detail. 

It will not prevent another NOGA fiasco, however. 

Canavan said he expected NOPSEMA would "ensure that titleholders are appropriately planning for, and executing decommissioning activities in a timely and responsible manner". 

It was around this period when Northern Oil and Gas Australia went into administration and it was clear the small private company had little ability to decommission the aging floating storage production and offloading vessel, The Northern Endeavour, NOPSEMA had shut down in July over safety concerns. 

NOGA has since been liquidated and Canavan replaced by Keith Pitt  but the Northern Endeavour remains moored in the Timor Sea in lighthouse mode and no closer to a long term solution. Upstream Production Solutions, which had the original contract to run the vessel on a third-party basis, is taking care of maintenance. 

The vessel is under official control of the federal government.  

NOGA bought the vessel from Woodside Petroleum in 2016 and took over its operations along with the depleted Coralina-Laminaria oil fields, saving the latter significant decommissioning costs. 

New minister for natural resources Keith Pitt called the debacle a "wake up call to the Australian oil and gas industry" but did not outline what steps he might take as minister to prevent a recurrence of a similar event.  

Taxpayers could be liable for a $200 million-plus decom bill, despite Pitt's promises otherwise, but the new draft on section 572 does not take into account title transfer, or if an operator can meet the costs of its decommissioning plan under its wider Environmental Plan. 

New titleholders must submit EPs and decommissioning plans at that point but they are generally spartan given the long life of offshore assets.  

However each five year EP review must provide increased details. 

However unlike the titles administrator - which oversaw the transfer from Woodside to NOGA - NOPSEMA does not take into account an operator's ability to meet financial demands outside of its ability to manage oil spills. 

Given the issue is now with Australia's aging offshore infrastructure it is hard to see how the expanded rules could prevent the issue recurring. 

NOPSEMA said titleholders must remove all property in their title once it is no longer used "and only accepts alternative arrangements where justification is appropriate". 

Property applies to all equipment, including subsea and wells, brought into the area but the policy "does not cover financial liabilities that may be associated with property as addressed in the Australian Government Offshore Petroleum Decommissioning Guideline". 

Should property not be removed or an environmental plan submitted on how it might meet removal obligations "NOPSEMA may escalate to enforcement action… whether in relation to failure to maintain property or failure to remove property". 

Enforcement includes  "directing a titleholder or former titleholder to comply with the OPGSS act" or it may prosecute and "have either civil or criminal penalties applied".

Source: Energy News Bulletin

Read more here

AUSTRALIA’s biggest gas producer, Woodside Petroleum, will join a consortium of Japanese companies to explore commercial hydrogen exports from Australia to Japan.

In one of the biggest studies of hydrogen exports to date, Woodside announced it had inked an agreement with JERA, Marubeni Corp and IHI Corp to explore rapidly exporting clean hydrogen to gas-hungry Japan. 

The study will appraise options to transport hydrogen from Australia as ammonia, then convert it back into hydrogen for power generation in Japan. 

According to a statement from Woodside, the scope of the research will also consider using ‘blue' hydrogen, produced using natural gas as the feedstock with carbon emissions will then be offset, as well as ‘green' hydrogen created from renewables. 

In both cases the hydrogen will be combined with nitrogen to form ammonia. The ammonia will then be shipped as a liquid. 

Woodside chief Peter Coleman said the company would "forge new energy pathways" through the research, and even went so far as to say he expected large-scale hydrogen production by 2030. 

Source: Energy News Bulletin

Read more here

THE Northern Territory government has approved the buy of a large scale battery for the Darwin-Katherine grid for A$30 million, with estimates suggesting it will pay for itself in five years.

The battery will help manage greater amounts of behind the meter solar used by households and businesses. 

The top end government said it will decrease the need for gas-fired spinning reserve which will save $6.4 million a year and 50,000 tonnes of CO2 emissions. 

It will also allow more renewable energy into the grid from private projects and the battery may be later used provide system services to the private sector.

The battery will be in operation in the second half of 2022. 

The government also has two smaller new initiatives in place to encourage households and businesses to take up solar panels, batteries and inverters with a $6000 grant. 

It has also developed a new standard feed-in tariff of 8.3 cents per KWh to be offered by Jacana Energy which will apply to all new businesses and households with behind-the-meter solar installations of up to 30 kilowatts. 

An initial allocation of $800,000 will be provided for the scheme, funding grants for about 130 batteries. 

Source: Energy News Bulletin

Read more here

ORIGIN Energy will buy a further 7.5% interest in its Beetaloo Sub-basin project, in the Northern Territory, from joint venture partner Falcon Oil and Gas.

Under the new agreement, Origin will increase its stake to 77.5% in exchange for paying a further $25 million on development of the Kyalla project in coming years. 

It comes a day after the company announced cost cuts. 

The onshore Kyalla shale project, dubbed a ‘game changer' by analysts, was put on ice last week over concerns that workers would not be able to access restrictions imposed by the Northern Territory government over COVID-19 concerns. 

The JV drilled the Kyalla 117 N2-1H ST2 well to a total depth of 3809 metres including a 1579 lateral section in February. Further appraisal work including fraccing has now been postponed and the well has been shut in. 

Elevated gas shows with relatively high liquids were observed in all three of the target reservoirs encountered while drilling. 

"Results to date from the Kyalla 117 well demonstrate good reservoir continuity, conductive natural fractures, and continuous gas shows," Origin said in a statement today. 

As operator, Origin hopes to frac the well in the first half of next year. The JV is also planning a section well, Velkerri Flank, to spud in the second half of 2021.

Citing the unprecedented circumstances, Falcon CEO Philip O'Quigley said last week the company would act quickly to protect local communities. 

Source: Energy News Bulletin

Read more here

APPEA have put together a valuable industry fact sheet for to assist with information on meeting the COVID-19 challenges and the upstream oil and gas industry protocols and framework. Get more information here:  https://www.appea.com.au/chief-executive-updates/latest-appea-covid-19-updates/

Register your business now for opportunites with Sun Cable's Middle Arm Battery Project. 11 Scopes of Works have been released now through ICN Gateway.

The Middle Arm Battery project is an early works package that will later form part of the Australia-ASEAN Power Link (AAPL) project.

Project design is scheduled to start in 3rd Qtr 2020. On-site works for establishment and land clearing in Q2 2021, with the Battery to be commissioned and online in Q2 2022.

The project is proposed to be sited east of the existing Weddell Power Station, with an installed capacity of 50MW scalable to 500MW. The project is designed to provide active power and ancillary services to the Darwin-Katherine Integrated System.

The project is scheduled for commissioning in 2022, with a 12 month construction period. This will require a notice to proceed in the dry season of 2021 for civil works, with potential for enabling works in late 2020.

Register your interest now: https://gateway.icn.org.au/project/4536/middle-arm-battery-project?st=projects&psid=1586151333

The Northern Territory Government has announced two significant steps in its plan for 50% renewables by 2030. 

The rapid uptake of solar by households and businesses is already delivering cheaper, cleaner power right across the Territory.

This increase in behind-the-meter solar and the impending connection of new large-scale solar projects to the grid means new investments and policies are required to maintain the stability of the power system.

Both initiatives will create local jobs while delivering stable, reliable and affordable power for Territory families and businesses.

A battery energy storage system (BESS) for the Darwin – Katherine System

The Northern Territory Government has approved the procurement of a large scale battery for the Darwin-Katherine grid at a project cost of $30M. The BESS is expected to pay for itself in approximately five years.

Major benefits of the BESS include:

• Increased stability and reliability of power supply. Fluctuations caused by the increasing levels of household and business behind-the-meter solar can be managed quickly and efficiently.
• Reduction in carbon emissions for the Territory and costs for Territory Generation. Reducing the need for gas-fired spinning reserve can deliver both cost savings of around $6.4M and emissions reductions of about 50,000 tonnes per annum.
• Enabling more renewable energy from large scale solar projects. The potential provision of system services from the BESS to the private sector will be considered. 

The provision of central storage technology to increase system reliability and security, and to potentially provide system services to the private sector are actions recommended by the Road Map to Renewables report commissioned by the Government. 

Procurement will take place over the coming months with the BESS expected to become operational in the second half of 2022.

Household and Business Battery Scheme (HBBS)

These batteries significantly reduce costs for households and businesses by reducing the amount of power that has to be purchased from the grid.

They also build grid stability and reduce power system costs by replacing demand for gas fired generation during evening peaks with solar energy generated during the day.  

Lower system costs mean lower power prices.

Batteries can also be designed to build resilience for families and businesses by maintaining power supply during unavoidable outages that can occur during cyclones and extreme weather events.

Two new initiatives will be implemented to encourage the uptake of behind-the-meter batteries.

Firstly, a $6000 grant will be available to households and businesses for the purchase and installation of solar PV systems with eligible batteries and inverters, or for those who already have solar, for batteries and inverters.

The minimum size for eligible batteries is 7kWh.

Secondly, a new standard Feed in Tariff (FiT) of 8.3 cents per kWh will be offered by Jacana Energy and will apply to all new businesses and households with behind-the-meter solar installations of up to 30kW in size.

All businesses and households who currently receive the premium one-for-one FiT will continue to do so.

They will only surrender the premium FiT if they upgrade the capacity of their system, move premises or take advantage of the battery subsidy.

Households and businesses who have already submitted an application to Power Water for the installation of solar will also be eligible for the premium FiT.

The scheme will be funded by savings from the introduction of a reduced FiT.

An initial allocation of $800,000 will be provided for the scheme, funding grants for about 130 batteries. 

Applications for the $6000 grants under the scheme will open Tuesday April 14.

Batteries and inverters will no longer be eligible for grants under the new Home Improvement Scheme or the Business Improvement Grant.

Reforms to the FiT to encourage the take-up of batteries by households and businesses was a recommendation of the Road Map to Renewables report commissioned by the Government.

Further details on the BESS and the HBBS can be found at www.business.nt.gov.au   

Quotes from the Chief Minister, Michael Gunner

“We’ve backed renewables and so have Territorians - they know renewables means lower prices.

“Our new $6000 solar and battery grants will see even more Territorians choose the sun and lower power prices - and create more jobs.

“Doing whatever it takes to save lives from coronavirus means throwing the kitchen sink at saving jobs and preparing the Territory for the rebound.

“I’m backing Territorians, solar and lower prices to get it done - we have a bright future if we all stick together.”

Quotes from Minister for Renewables, Energy & Essential Services, Dale Wakefield

“The BESS and the new $6000 grants for home and business batteries are two huge steps forward in our plan for 50% renewables by 2030.

“We want Territorians to have access to the latest and best technology as we build a stronger and more resilient power system for Territory households and businesses.

“These initiatives will help lower power bills while maintaining secure and reliable power for Territorians.”

Media Contacts:

Gerard Richardson (Chief Minister) 0438 693 898
Paige Nguyen (Minister Wakefield) 0428 727 244

SANTOS has no plans to defer any spend on its carbon capture and storage development in the Cooper Basin, despite cutting $550 million in capex this year, chairman Keith Spence said during the company’s virtual annual general meeting today. 

It has entered front-end engineering and design for the project after spending $20 million drilling a couple of wells last year.  

There are no firm figures on how much the project, designed to eventually inject 1.7 million tonnes of CO2 underground per year, might cost but chairman Keith Spence estimated today in the hundreds of millions.  

It recently signed a non-binding memorandum of understanding with BP for CO2 cooperation, on the sidelines of a CO2CRC meeting in Canberra.  

BP in early March signed a non-binding agreement electing to possibly spend A$20 million at Santos' CCS project contingent on a positive final investment decision.  

Santos joined the CO2CRC at the beginning of last month, behind Woodside Petroleum, Chevron, BP, Shell and BHP, and was then hoping to sanction its CCS project before the end of the year.  

It would see an initial 300,000 tonnes of CO2 sent back into the reservoirs natural gas was originally pulled from, which will ramp up to 1.7 million tonnes per annum at full capacity.  

Santos estimates it can do this for A$30/t and later bring costs down further.  

Spence said the CO2, stripped from the natural gas at its Moomba plant, and transported to the nearby fields makes it an initially low cost project.  

‘We'll drive it down to $20 per tonne," Spence said. For it to be viable there needs to be a price on carbon and for scale up government support the way the renewables industry has received subsidies.  

CCS has, of course, received a lot of government support in previous decades though those projects never proved viable.  

Source: Energy News Bulletin

Read more here

 

SHELL Australia told Energy News this morning it is still working to restore production at its massive Prelude FLNG project, but is unable to provide a time frame on when it expected the facility to resume at full capacity.

A Shell spokesperson confirmed to Energy News that the facility remained shuttered this morning, but stressed the company but said it was doing what it could to bring produce back 

"Our focus is on the safe and stable restoration of production," the spokesperson said.

"Work continues to restore full operations on Prelude."  

Shell took the decision to shut the vessel down in February, standing down half of its crew. 

 The facility's backup power generation had failed and there were issues with toilet facilities, among others. 

Since it began operations last June, the Prelude has sent 15 cargoes, shipping a record three cargoes in December. At full capacity it can send four a month, but has not hit this milestone yet. 

Energy News understands no customers are currently affected by the lack of LNG supply from Prelude. 

Shell also made the decision to delay any final investment decision on the development of its Crux field some 30km from the Prelude which is slated as backfill for the giant U$15 billion FLNG vessel due to the oil price crash, the spokesperson said.

Source: Energy News Bulletin

Read more here

Minister Paul Kirby's Office

In a significant boost for the NT economy and prospects for local jobs, the Territory Labor Government has granted final approval to Core Lithium Ltd to commence development of its new lithium mine in the Top End.

The Finniss Lithium Project is a proposed open cut lithium mine located along the Cox Peninsula Road, approximately 35km west of Berry Springs. 

It is the first ever lithium mine to be approved outside of Western Australia, and is the first new mine of significant scale to be approved in the NT since 2013.

The project estimates approximately two million tonnes of lithium-bearing ore will be mined over the predicted three to four year life of the mine, and will provide around 200 jobs to local Territorians.  With the mine only an hour’s drive from Darwin and 35km from Berry Springs, the entire workforce will drive to and from the site each day and no camp will be required.

Lithium is considered a critical mineral that is strategic to the global economy, particularly for new and emerging technologies such as batteries, electric vehicles, mobile phones, high-definition screen displays, solar panels, medical equipment and military technology.

The development of the Finniss Lithium Project has the potential to position the NT as a strategically important jurisdiction for the production, processing and manufacturing of critical minerals to the global market. 

Access to the power station, rail and gas facilities, and one hour via sealed road to a local workforce and the Darwin Port position the project to efficiently supply key Asian lithium markets, and provide scope for further processing potential within Darwin itself.

Minister for Primary Industry and Resources, Paul Kirby, has approved the project’s Mining Management Plan (MMP) and issued an Authorisation to Core Lithium Ltd to commence development of the project.

 

Quotes from Minister for Primary Industry and Resources, Paul Kirby:

“The Territory Labor Government knows that local jobs and economic recovery have never been more important.  The resources sector is going to play a huge role in our recovery from the COVID-19 crisis, and the milestone achieved by the Finniss Lithium Project is very good news for Territorians.

“The first three years of this project are expected to inject over half a billion dollars into the NT economy and create around 200 jobs for Territorians within an hour of Darwin.

“We will get through this crisis, and the Territory Labor Government is working hard to kick-start our economic recovery, including creating local jobs for Territorians.”

 

Quotes from Core Lithium’s Managing Director, Stephen Biggins:

"The Finniss Lithium Project will create more than 200 direct full-time jobs in the Northern Territory, with potential to inject more than half a billion dollars during its first three years of operation into the local economy.

"Core Lithium would like to thank the Minister for Primary Industry and Resources, Paul Kirby and Northern Territory Government for their engagement during the MMP approval process. By working together with the Territory Government the Finniss Lithium Project opens the door for the Territory to be a key supplier of high-quality lithium for batteries to power the growing global electric vehicle market.

 “The Territory has the opportunity to play a crucial role in supporting the world's response to reducing emissions and managing climate change risk.”

 

Media Contact:  Tom Ryan 0436 951 084