Industry News

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

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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

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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

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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

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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

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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

TOTAL will develop Qatar’s first large scale solar farm 80 kilometres south of capital Doha, in a major move for the multinational oil and gas company as it turns its attention to renewable opportunities in the Middle East.

The Arabian country is the largest LNG exporter after Australia but is now like regional peers harnessing the power of its fierce desert sun to produce domestic power too.

The project, named Al Kharsaah Solar after the town it will be built near, is estimated to cost 1.7 billion riyals (A$728 million).

Partnering with Japan's Marubeni Corporation, Total will build the 800-megawatt solar plant and have it fully connected to the Qatari grid by next year.

Total will have a 49% stake in the project, and Marubeni will hold the rest.

This is a major move for the company which has not embarked on a renewable venture of this size, nor in the region, before. Up until now, its presence in Qatar has largely been in upstream oil and gas, and petroleum refining.

Total has been present in Qatar since the mid-1930s and currently holds a 20% stake in the upstream Qatargas business as well as a 40% interest in the massive Al-Khalij offshore oilfield. The company's production last financial year averaged 211,000 barrels of oil equivalent per day.

However, this is all set to change as it looks to a future solar and hydrogen economy in the country. In a statement overnight Total said it was looking to renewable energy as part of a broader strategy in the energy transition.

Source: Energy News Bulletin

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OIL and gas must adjust to new conditions and begin to seriously invest more in emissions-free technology and longer term make the transition from ‘oil and gas’ to ‘energy’ if companies hope to survive, a report from the International Energy Agency released at the World Economic Forum today says.

Most important to the transition will be companies cutting emissions from their own operations.  

Worldwide oil and gas production makes up 15% of energy-related emissions.

Combatting fugitive methane leaks and ceasing flaring and venting will be important, as will electrification of some processes at LNG plants.  

"Minimising emissions from core oil and gas operations should be a first-order priority for all," the report said.  

"Reducing methane leaks to the atmosphere is the single most important and cost-effective way for the industry to bring down these emissions." 

In US shale basins the US Energy Information Administration suggests flaring and venting of gas associated with oil production that does not have a path to market is being flared and vented at a rate of up to 1.1 billion cubic feet per day.  

In the middle of last year Rystad Energy released research that found flaring and venting across the Permian Basin alone hit 650 million cubic feet per day.  

But overall the transition will be easier for some than others. Many national oil companies will struggle to adapt.  

The attention is usually focussed on the world's seven majors which account for 12% of oil and gas reserves, 15% of production and 10% of "estimated" emissions from industry operations. However, NOCs account for half the world's production and more reserves again.  

"There are some high-performing NOCs, but many are poorly positioned to adapt to changes in global energy dynamics," it said.  

Economies reliant on oil money will also struggle.  

Across the entire industry investment in non-core areas is around 1% of capital and "there are few signs of a major change in company investment spending".  

That average rises among what the IEA calls ‘leading individual companies' which may spend as much as 5%, largely on solar then wind. Others have bought battery tech, or EV charging tech and some are moving to electricity distribution (think Shell's plans for ‘molecules and electrons'). 

Source: Energy News Bulletin

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