Industry News

OPERATION of the world’s largest offshore facility, Shell’s embattled Prelude floating LNG vessel, has descended into chaos with back up power generation failing, cardboard potties issued to replace regular toilet facilities and a fleet of helicopters called in to reduce crew numbers.

Only last week Shell chief executive Ben van Buerden told analysts the Prelude was evidence of how new assets would improve the gas giant's cash flow in 2020. 

"Once we reach steady-state operations, we expect one carrier a week to offload LNG, LPG or condensate," he said. 

A week later achieving consistent nameplate output from perhaps the most complex offshore facility ever built looks some time off.  

Prelude has had consistent problems with its steam-driven power generation facility and on Sunday experienced another electrical trip. This time the backup diesel generators failed to power up which "impacted certain amenities onboard" according to a Shell spokesperson. 

This impact included the toilets. Temporary toilets were assembled on every level of the Prelude's living quarters and instructions issued to crew: "People are to defecate into cardboard bedpans and place the pan in a plastic bag and seal it securely." Crew with lesser needs were allowed to continue to urinate in "toilets that are not full." 

Otherwise, bottles and buckets were recommended. 

Tuesday's crew newsletter seen by Energy News that detailed the new sanitary arrangements also advised of the arrival of five helicopters that morning to take crew off to reduce the total number of people on board.  

Shell use Sikorsky S-92 helicopters from CHC Helicopter to service the Prelude, each with the ability to ferry 19 passengers. It is understood that 70 crew were taken off. 

The Shell spokesperson said production had been suspended and work was underway to restore full operations and the issues with crew amenities were being resolved. 

"We have made the proactive decision to temporarily reduce the number of people on board," he said.

Source: Energy News Bulletin

Read more here

THE flagship vessel of troubled Northern Oil and Gas Australia is now sitting unmanned in the Timor Sea after the last of its crew was taken off over the weekend, the day after a creditors’ meeting to consider if the company should be liquidated was delayed.

A spokesperson from the Commonwealth regulator, the National Offshore Petroleum Safety and Environmental Management Authority, told Energy News de-staffing the Northern Endeavour floating storage production and offloading vessel was allowed under the vessel's approved safety case and the move had reduced immediate safety risks to zero. 

"The facility is now unmanned, in ‘lighthouse' mode, with navigational aids operational, the wells suspended, and other controls being applied," the spokesperson said. 

"While the facility is not producing and with the wells suspended, any immediate environmental risks are reduced." 

The FPSO had been run with a small skeleton crew since production was shut in last year.  

NOPSEMA's spokesperson said crew removal may occur for maintenance reasons, to avoid cyclone disturbance in the area, or for other emergency management reasons.  

"For cyclone avoidance, facilities typically de-man for the period that is necessary for weather conditions to subside and facility crew to be safely transported to the facility," he said. 

For other reasons, such as this case, the spokesperson said the period would vary and was determined by the operator in accordance with the safety case.

Source: Energy News Bulletin

Read more here

AUSTRALIA’S trade relations with one of North Asia’s powerhouse economies, South Korea, are often forgotten in favour of China, Japan and even Indonesia, especially after 2019’s hard won bilateral free trade agreement.

However until recently the nation was the Australia's second-largest LNG export market and is now third, while Australian exports are projected to rise in the mid-term as Seoul plans to retire more coal-fired power. 

Now, Australia's ambassador to South Korea James Choi believes hydrogen cooperation is the way forward, seeing synergies with the LNG export industry much the same way Japan is looking to leverage its decades of trade ties as part of its own long term hydrogen economy plans.  

Earlier this year now-departed resources minister Matt Canavan signed a cooperative agreement with his Japanese counterpart to work more closely on developing a hydrogen economy working on both R&D and multilateral legislation and cooperative efforts.  

However such cooperation doesn't yet exist between Australia and South Korea but Australia's National Hydrogen Strategy released in late 2019 is bullish on the potential for Australia to make billions supplying large Asian economies. 

"A cautiously optimistic scenario could see an Australian hydrogen industry generate about 7600 jobs and add about $11 billion a year in additional GDP by 2050 If global markets develop faster, it could mean another ten thousand jobs and at least $26 billion a year in GDP," a preface to the strategy said.  

"Australia's got abundant gas and renewable energy. … I see hydrogen as the next phase of Australia's very important energy partnership with the Republic of Korea," Choi told the Korea Herald this week. 

Source: Energy News Bulletin

Read more here

WHILE much of the attention last week was focussed on the gas part of Scott Morrison’s A$2 billion energy deal with New South Wales, parts of the agreement had a much greener tinge, outlining the underwriting of interconnectors between the states and the establishment of a pilot renewable energy zone.

The federal government, according to last week's statement by the PM, will underwrite the HumeLink and Queensland-NSW interconnectors to strengthen grid reliability, one of the key priorities listed by the Australian Electrical Market Operator's analysis on the grid.  

The $2 billion will also include NSW-based emissions reductions initiatives utilising $960 million in federal funding, both being divvied out into a mix of grants and loans, matched by just over $1 billion of direct funding from NSW.  

"Our agreement with the Commonwealth today will ensure we continue to strengthen and diversify our energy sector here in New South Wales - securing traditional energy sources whilst growing renewable energy investment across the state," NSW premier Gladys Berejiklian said.  

The deal will also provide financial support for the establishment of the nation's first pilot renewable energy zone in the Central West for large-scale renewable projects. 

Source: Energy News Bulletin

Read more here

FALCON Oil & Gas said yesterday sidetrack drilling has commenced at the new horizontal production hole section of the Kyalla 117-N2 well in the Beetaloo Sub-basin it shares with operator Origin Energy (70%).

The environmental management plan for both drilling, fraccing and testing the wells was approved by the Northern Territory government in August last year.  

It is the second horizontal well following Amungee NW1-H in 2016 which was completed just before the moratorium was introduced in the Top End several years ago.  

In early December Falcon vertical drilling was completed to a depth of 1,800m. 

Initial evaluation of the vertical section found three source rock reservoir sections identified within the Kyalla Shale Formation, with a thickness measuring almost 900m. 

The three sections are known as the Lower, Middle and Upper Kyalla reservoirs. Gross thickness of each interval is between 75m-125m. 

According Origin all three sections exhibited "elevated gas shows with relatively high C3, C4, and C5". 

Falcon said the new horizontal section will again target a later length of 1000-2000 metres within the Lower Kyalla shale at a depth of 1800m.  

Drilling results to date have been encouraging and Falcon remains very optimistic about the potential of the Lower Kyalla shale play," Falcon CEO Phillip O'Quigley said. 

Last year the company raised A$12.66 million through a placement to fund its share of the work program in Australia.

Source: Energy News Bulletin

Read more here

 

US oilfield contractor Halliburton announced overnight it had been awarded seven contracts for drilling and completion services for Ichthys Phase-2.

The massive Ichthys LNG project is operated by Japan's Inpex in the Browse Basin offshore northern Australia.

Inpex was granted approval from the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to conduct its next phase drilling program in production license WA-50-L in December.  

The development program is set to begin as soon as March this year and will take around three to five years to complete.

Inpex plans to drill and complete up to 15 development wells using a semi-submersible rig.

Under the contract, Halliburton will provide directional drilling, logging, coring and well completion services.

"We are excited to win this work and to collaborate with Inpex to deliver our extensive drilling and completion services in addition to our digital capabilities in the strategically significant Browse Basin," Halliburton Australasia vice president Jason Jeow said.

The campaign will target two reservoirs, Brewster and Plover.

According to Inpex's environmental management plan, the drilling campaign includes the potential for workovers and well intervention on existing and planned development wells.

Water depths at the proposed well locations range between 235 metres and 275m, the company said.

Inpex began the process of selecting its preferred contractors for the phase two development in January last year.

Maersk was awarded a significant US$300 million contract for the provision of its ultra-deepwater semi-submersible Maersk Deliverer rig.

McDermott International and Baker Hughes were awarded contracts to provide a joint URF and SPS EPCI solution for the upcoming campaign.

Fabrication of the subsea URF equipment will be carried out at McDermott's facility in Batam, Indonesia.

Source: Energy News Bulletin

Read more here

PRIME MINISTER Scott Morrison has announced that one of the solutions to climate change and emissions reductions in Australia is to unlock the gas supplies beneath the ground in the eastern states, suggesting more gas from Victoria and New South Wales will help the nation transition to renewables and meet its Paris commitments. 

"We need to get the gas from under our feet. There is no credible energy transition plan for an economy like Australia, in particular, that does not involve the greater use of gas as an important transition fuel," he said.  

The speech has, predictably, been championed by industry and lobby body APPEA and slammed by activists and others horrified at his pro-fossil fuel stance as the nation battles enormous bushfires across the east coast they see as linked to Australia's fossil fuel industry.  

 "There are plenty of other medium or long-term fuel arrangements and prospects, but they will not be commercially scalable available for at least a decade is our advice," Morrison said.  

The head of the Australasian Centre for Corporate Responsibility Brynn O'Brien called Morrison's speech "sickening, chilling" in a tweet.  

"It's important for Australia's oil and gas industry to be recognised for the positive role it is and can play in the broader energy and emissions reduction debate. Natural gas is the perfect complement to the growing use of renewables and will continue to be so for decades come," APPEA CEO Andrew McConville said. 

Source: Energy News Bulletin

Read more here

Download the full media release from Empire Energy Group here.

Highlights

• New EP187 2D seismic processing and interpretation confirms that Empire holds a material Beetaloo SubBasin acreage position within its 100% owned and operated tenement

• Large EP187 area identified containing thick continuous Velkerri and Kyalla Shales, clearly undisturbed by faulting and adjoining EP161 where Santos’ Tanumbirini-1 is flowing gas after recent fracture stimulation

• Empire’s EP187 Velkerri and Kyalla Shales exist at shallower depths than adjoining blocks while maintaining equivalent thickness offering reduced drilling and development costs and increasing the potential for the presence of both gas and liquid hydrocarbons

• Kyalla Shale identified at greater depth and thickness than previously anticipated thereby opening up a new secondary exploration target in EP1871

• Well location de-risked ahead of drilling scheduled for mid-2020 

Santos Managing Director and Chief Executive Officer Kevin Gallagher said Santos delivered record annual production and revenues in 2019, and lower unit production costs, clearly demonstrating the effectiveness of our disciplined, cash generative operating model.

“The year was highlighted by highest ever free cash flow of more than $1.1 billion, record onshore drilling performance, lower unit production costs and significant progress on our diversified portfolio of growth projects.”

“The acquisition of ConocoPhillips’ natural gas assets in northern Australia and Timor-Leste announced in October is fully aligned with our growth strategy to build on existing infrastructure positions and delivers operatorship and control of strategic LNG infrastructure at Darwin.”

“Also in the Northern Territory, better than expected gas flow rates from the ongoing Tanumbirini-1 vertical well test are very encouraging and an important step in Santos’ appraisal of the significant resource potential of the McArthur Basin.”

“Natural gas is forecast to supply a quarter of the world’s total energy demand by 2040 and Santos, with its portfolio of long-life natural gas assets, is well positioned to benefit as we seek to deliver 120 mmboe of production by 2025.”

“We are also investing in projects to lower emissions and assessing the significant potential for carbon capture and storage in the Cooper Basin,” Mr Gallagher said.

Read more here.

Energy Club NT are proud to be a supporting partner for the 2020 AGES Conference in Alice Spring 24-25 March with other sponsors Origin Energy, Empire Energy Group, Core Lithium Ltd and TLD Titeline Drilling. The AGES conference, organised by NT DPIR, has been successfully attracting significant stakeholders year on year profiling prospective opportunities for minerals and oil & gas explorers. This is an exciting time to be exploring the Northern Territory and a great conference to be updated on the development of our resources. Be sure to come and grab a coffee at the Energy Club NT coffee cart throughout the conference! Registration open online.

http://www.cvent.com/events/ages-2020/event-summary-7253ba31962b4387b81ee47a3a81e3f4.aspx?RefID=Event%20Summary