Industry News

CONOCOPHILLIPS and Santos have awarded a major contract for a subsea production system contract for the Barossa gas field development to TechnipFMC Santos suggests this puts Barossa gas and condensate field ahead to be the leading candidate to backfill Darwin LNG.

The engineering procurement and construction contract "represents a commitment to long-lead items in advance of a final investment decision," Santos said.  

The contract includes the engineering, design and fabrication of wellheads, manifolds and control system as well as installation and commissioning assistance.  

"This is the first EPC contract to be awarded for Barossa and a big vote of confidence in its position as the leading project to backfill DLNG," Santos managing director and CEO Kevin Gallagher said.  

Gallagher said the joint venture is making good progress in the front-end engineering and design phase and is evaluating bids for the gas export pipeline.  

"We are also looking at technical proposals for the floating production storage and offloading facility from both MODEC and the Technip/Samsung Heavy Industries consortium." 

"An invitation to tender for the development drilling contract has also been released, further advancing the project to meet DLNG's backfill timetable."  

 "We continue to focus on strong cost discipline with all our selected contractors, developing the certainty of cost, schedule and execution planning required to compete in our global portfolio and support a final investment decision," ConocoPhillips Australia West president Chris Wilson said.  

Barossa would more than double Santos' northern Australian production should it go ahead. 

Source: Energy News Bulletin

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IN an unexpected upset the Liberal-National coalition led by Prime Minister Scott Morrison has been delivered back into power with an estimated 77 seats at this point and the ability to form a majority government. 

What exactly this will mean for energy policy isn't clear given going into the election the incumbent party spent little time campaigning on climate and emissions targets. However Scott Morrison has already told radio shock jock Alan Jones the government's energy policy will remain on the same course. 

"We set out all our energy policies at the election, and that's what I'm going to do. It includes a continuation of coal fired power as part of the baseload power. It includes hydro. It includes gas," he said after Jones asked for a specific commitment to coal-fired power to reduce household energy prices.  

"There's no change to our policies there. What I took to the election is what I'm going to do," Morrison said.  

"The next term provides an opportunity for the industry to work with the government to deliver better results for households and businesses," Australian Energy Council CEO Sarah McNamara said. 

"We acknowledge and thank minister Angus Taylor for his work in the last term and we look forward to a continued relationship with the Morrison government for the benefit of all energy customers." 

Taylor has kept his seat of Hume in Victoria, but there have been questions as to whether he will retain his portfolio.  

Sarah Henderson, the Liberal who joined protests against Equinor's plans to drill a well in the Great Australian Bight, lost her ultra-marginal seat of Corangamite to Labor. 

Labor's ambitious emissions targets are no longer as the Coalition does not have a target.  

Whether the Liberals may the National Energy Guarantee is an open question.  

Labor's emissions target may have concerned business, but the loss of its policy to allow carbon credits offshore - so companies with emissions heavy projects in other nations can invest in cheaper projects there rather than Australia - may be a blow to some.  

Woodside Petroleum managing director Peter Coleman has suggested an Australia-only policy would be expensive as land could be scarce and compete with agricultural projects. 

With no emissions target in place from government businesses have been working to the Paris climate accord target of no more than 2C warming over pre-industrial levels.  

Labor's loss could also sink plans to spend $1.5 billion on a pipeline network to send gas from Queensland's Bowen and Galilee basins to market, and to develop the Beetaloo Basin in the Northern Territory, though resources minister Matt Canavan is especially gung ho on the development of Beetaloo.  

Australian Petroleum Production and Exploration Association CEO Andrew McConville has called for a climate policy now the election is over. 

 Source: Energy News Bulletin

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FALCON Oil & Gas has raised £7 million (A$13 million) through a share placement of 50.5 million shares at £0.14 (26c) per share on the London Stock Exchange, which it will use to fund its share of further drilling and appraisal work in the Beetaloo Sub-basin in the Northern Territory.

The Ireland headquartered oiler has a 30% stake in the unconventional play which consists of three permits (EO76, EP98 and EP117) alongside Australia's Origin Energy which owns the remaining 70%.  

Falcon and Origin are expected to bring drilling the next well in its exploration campaign as early as next month.  

To date the joint venture has drilled four wells under the stage one work program, which resulted in the discovery of 6.6 trillion cubic feet of 2C gross contingent resources.  

A 57 day extended well test resulted in cumulative production of 63 million cubic feet of gas and flow rated of 0.8-1.2MMcf of gas per day.  

The focus will be on the liquids-rich Kyalla Formation and Velkerri Shale.  

Origin and Falcon have now agreed to evaluate the potential of the liquids-rich gas fairways in both the Kyalla and Velkerri shales as part of the stage two work program, and plan to drill a further four horizontal wells mid this year.  

Under the stage two work program two wells will also be fracced. A third stage work program is planned for 2020. 

The estimated gross capital expenditure for stage two and stage three is US$130 million. Under the terms of the Farm-out Agreement, Falcon Australia is carried for up to A$113 million (US$80 million) for the costs of Stage two and Stage three, equating to US$24 million net benefit to Falcon, with Falcon's net cash contribution estimated at US$15 million, before contingency.  

"Falcon is delighted with the proposed placing to conditionally raise £7 million. This placing will see the company being adequately funded through the next US$100 million of capital expenditure on the Beetaloo project," Falcon chief executive Phillip O'Quigley said.  

"Preparations continue for the recommencement of drilling of stage two in mid-2019, which will include the drilling and hydraulic fracture stimulation of two horizontal wells, and we look forward to updating the market in due course."  

Source: Energy News Bulletin

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The Territory’s plan to be a world-class hub for gas production, manufacturing and services will be outlined in a series of sessions aimed at the oil and gas industry and investors on the East Coast.

Team NT Executive members Paul Tyrrell and Clare Martin will lead the pitch. Their role is to advocate the Territory’s investment, business and lifestyle prospects nationally and internationally and harness investment opportunities.

Mr Tyrrell, as former head of the Territory’s public service, and Ms Martin, former Territory Chief Minister, are credited with playing key roles in significant initiatives such as attracting the Ichthys Project onshore LNG facilities to Darwin.

The oil and gas industry is supported by the Territory Labor Government’s Budget 2019 which included $6.5 million to continue the $26 million Resourcing the Territory program to stimulate resource exploration and investment attraction.

 Among the points highlighted at the sessions will be:

• The Territory’s five-point plan to diversify and grow the Northern Territory gas industry, including creating a new gas demand centre in Darwin to develop a range of gas processing and manufacturing industries, research and cluster centres.
• Prospective onshore gas developments in the Territory and the significant opportunities for gas supply to East Coast industrial and residential customers. This comes after the first gas flowed from the Territory to East Coast gas markets via the Northern Gas Pipeline in January this year.
• The Territory’s record of successfully facilitating large-scale investment projects across a range of industries including oil and gas, mining and agribusiness. Examples of gas sector developments include the INPEX-operated Ichthys LNG Facility, the ConocoPhillips-operated Darwin LNG Facility, Jemena’s Northern Gas Pipeline and the Tanami Gas Pipeline.
• Darwin’s role as a strategically located LNG hub supplying Asian markets. The Territory is strategically positioned to secure gas from existing offshore gas reserves in the Timor Sea or from future onshore gas developments. 

The sessions will be held this week in Brisbane, Sydney and Melbourne. They are being held in cooperation with the AI Group, Manufacturing Australia, and Chemistry Australia.

 Quotes from the Minister for Trade and Major Projects, Michael Gunner

“Continuing to sell the Northern Territory as an attractive investment destination is a priority of the Territory Labor Government.

“The oil and gas industry plays an important role in growing our economy and creating jobs through further onshore and offshore investment.

“Team NT’s sessions are an important element of showcasing what the Territory has to offer and will help maximise opportunities for investment and job creation.”

 Media contact: Cameron Angus 0404 021 192.

Stronger Protections for Surface and Groundwater 

Parliament this week passed amendments to the Water Act 1992 that fulfil several key recommendations (7.6, 7.8(a), 7.9 and 7.17) of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory (the Inquiry).

This means:

• The disposal of hydraulic fracturing waste to surface water and aquifers is prohibited (s17A);
• The use of surface waters for petroleum activities is prohibited (s45A); and
• Any proposed groundwater extraction for hydraulic fracturing within 1km of an existing bore will be required to have the written agreement of the bore owner or be supported by a detailed hydrogeological investigation to the satisfaction of the Controller of Water Resources which demonstrates there will not be adverse impact on the existing bore (s60A)

Passage of the Water Amendment Bill 2019 through Parliament removed any discretion the Controller of Water Resources previously had in relation to implementing these recommendations of the Inquiry Report.

This ensures future decision makers are held to the same high standards of water resource protection.

The Bill also eliminates the potential for legal challenges and future weakening of the required protections, and provides certainty to industry regarding water related requirements and to the community that these high standards of protection will continue to be applied into the future.

To read the latest from the NTG Newsroom, please visit NTG Newsroom

To read the Implementation Plan or access additional information, please visit hydraulicfracturing.nt.gov.au

THE Northern Territory Michael Gunner-led Labor government has released its 2019 Budget reaffirming the Top End’s commitment to the oil and gas sector.

The government has established a five-point plan to develop the gas industry in the Territory and allocated $820,000 in the budget to re-establish the NT Gas Task Force to implement its plan.

Under the plan the government hopes to "propel" the Territory into a world class hub for gas production and manufacturing by 2030 by expanding Darwin's LNG export hub, growing gas supply and establishing a manufacturing industry.

The plan also outlines ambitions that include growing research and training capacity and establishing further pathways to contribute to national energy security across the east coast.

Up to $5 million per year will be available to the task force and industry to pursue gas projects.

A further $1.48 million has been earmarked to implement the recommendations of the Scientific Inquiry into Hydraulic Fracturing in the NT which will include coordination and advice on petroleum environmental management matters.

There is also $1 million for strategic studies, including for gas developments in the Beetaloo Sub-basin, Darwin Harbour and Middle Arm.

The government also plans to spend $6.5 million to continue to deliver the four-year $26 million Resourcing the Territory Program in an effort to stimulate further exploration and encourage investment.

Australian Petroleum Production and Exploration Association external affairs director Matthew Doman said the oil and gas industry continued to play a "crucial role in revitalising the economy."

"The industry remains committed to working with the Territory government and local businesses to maximise opportunities for employment," Doman said.

Major projects in both the private sector and government facilitated projects took centre stage in this year's budget papers with the government noting that some of the world's largest resource projects are located in the Northern Territory, including the $37 billion Inpex-led Ichthys LNG project.

Handing down the budget in parliament yesterday, NT treasurer Nicole Manison told the parliament there were many "exciting opportunities for onshore gas exploration and development."

"[The] government has plans for the Territory to become a new downstream gas processing industry and manufacturing hub, attracting billions of dollars in international investment and creating thousands of local jobs across the Territory," Manison said.

"In the Beetaloo Basin alone, there is an estimated 500 trillion cubic feet of gas in one shale formation - enough to power the nation for 400 years."

Source: Energy News Bulletin

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SANTOS has said this morning the Corvus-2 appraisal well offshore Western Australia in the Carnarvon Basin has discovered a significant gas resource, intersecting a gross interval of 638 metres, making it one of the largest ever columns ever discovered across the North West Shelf.

It was drilled to almost 4000 metres in water depths of 63m.  

Wireline logging has confirmed 245m of net hydrocarbon pay across the target reservoirs in the North Rankin and Mungaroo formations, between 3,360-3,998m.  

"Corvus-2 has delivered a fantastic result and has opened up a number of additional exploration opportunities in the region," managing director Kevin Gallagher said.  

"It is particularly exciting to have realised a higher liquids content and significantly bigger resource volume than we expected." 

The well also encountered higher permeability zones than in Corvus-1 from initial pressure sampling which indicates a "significantly higher" condensate to gas ratio of some 10 barrels per million cubic feet, and CO2 content of 7%.  

It is three kilometres southwest of Corvus-1, drilled almost 20 years ago, 28km from the Reindeer platform that sends gas to the Devil Creek domestic gas plant in Karratha, and 62km from the Varanus Island tie in point, all of which Santos owns outright since its takeover of Quadrant Energy last year.  

Gallagher suggested Corvus-2 could be tied back to either facility and could increase their utilisation and provide backfill and extend the plateau "well into the 2030s".  

The Noble Tom Prosser drilled the well, which will be plugged and abandoned once logging operations are complete. 

Read more here

Source: Energy News Bulletin

SHELL and ConocoPhillips have both announced the completion of the sale of their shares of the Greater Sunrise gas field to Timor-Leste for a combined US$650 million.  Shell said late yesterday the sale of its 26.5% share to three wholly-owned nominees of Timor Gap, the national oil company for $300 million had completed. 

"We understand the importance of this resource to the Timor-Leste nation and respect the Government's determination to pursue an alternative path to development through an onshore facility," Shell chair Zoe Yujnovich said.  

ConocoPhillips made the announcement Monday on selling its 30% share for US$350 million  

"ConocoPhillips recognizes the importance of the Greater Sunrise Fields to the nation of Timor-Leste, and this sale gives them a significant working interest in this important development," executive vice president and chief operating officer Matt Fox said.  

First ConocoPhillips and then Shell moved out of the project late last year, announcing the sale of the assets to the small nation which used its $17 billion sovereign wealth fund to pay for the transactions.  

This gave it a 56% share of the field, which Woodside (33.5%) still operates. Osaka Gas has the remaining 10% share.  

Woodside did suggest the original contract gave it veto power and it could possibly block the sale if it chose.  

Timor-Leste has long said onshore development of the fields via an LNG plant is "non-negotiable", underlining it again in March when the ambassador to Australia and head of the petroleum and mines body spoke at the Australasian Oil & Gas conference in Perth.  

Petroleum and minerals authority president Gualdino do Carmo da Silva told Energy News then "for us it's non negotiable". 

Read more here

Source: Energy News Bulletin

The first Environment Management Plan (EMP) for exploration drilling of onshore shale gas in the Northern Territory has been accepted for assessment by the Minister for Environment and Natural Resources.

The EMP has been submitted by Santos and covers two proposed wells in the Beetaloo Sub-basin.

The EMP is an activity specific plan that must identify all environmental impacts, and demonstrate that the impacts and risks associated with the activity are reduced to a level that is as low as reasonably practicable. The EMP must also show how appropriate environmental management practices will be implemented.

The Minister will consider the EMP and will only approve the activity if satisfied that the objectives and approval criteria of the Petroleum (Environment) Regulations 2016 have been met. 

The proposed Santos drilling program opened for public comment today and will remain open for the full 28 day consultation period. All submissions will be shared with Santos and published online.

Comments will be considered by the Minister in order to make a fully informed decision as to whether or not to approve the EMP.

If an EMP is approved, it will be published on the Department of Environment and Natural Resources website, including a statement of reasons outlining why the decision was made.

To read the latest from the NTG Newsroom, please visit NTG Newsroom

To read the Implementation Plan or access additional information, please visit hydraulicfracturing.nt.gov.au

THE construction phase of the Northern Territory Solar Energy Transformation Program has now finished, replacing diesel and fossil fuel generators across 25 sites in regional parts of the territory. 

The rollout cost A$59 million and was co-funded by the Territory government and Australian Renewable Energy Agency.  

All 25 of the projects were engineered and constructed by Territory Power and Water Corporation.  

The project integrates 10MW solar generation facilities with existing diesel power stations without compromising power quality.  

The program included a unique project at Nauiyu (Daly River) that combined a 1MW solar array with a 2MWh battery, allowing for 100% of solar energy use during the day with diesel engines operating at night. 

The NT government said the primary goal of the program was to reduce diesel use by 15% in targeted communities, which adds up to 94 million litres of diesel savings over the 25-year life of the program.  

"This is a fantastic achievement for all involved in completing this ambitious project to deliver the largest rollout of renewable energy to remote, off grid communities in the Northern Territory," ARENA CEO Darren Miller said. 

"By installing solar power systems across these 25 communities, this project will help these communities to reduce their reliance on diesel. Now integrated, these communities can increase their uptake of renewables and have the option to add batteries to store their solar energy in the future." 

Source: Energy News Bulletin

Read more here.