Industry News

Building a productive onshore gas industry that protects our unique environment and delivers local jobs

Update on Implementation It has been a little over a month since the release of the Implementation Plan for the recommendations of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory.

The six major reform areas are focused on the priority areas of:

• strengthening regulation;

• ensuring industry is accountable for its practices;

• safeguarding water and the environment;

• respecting community and culture;

• maximising the benefits and opportunities available to local businesses and communities; and

• ensuring planning for future development.

Agencies responsible for implementation actions continue to progress program planning to deliver the recommendations as outlined in the Plan.

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DESPITE some mixed results from Origin Energy yesterday, and a spooked market, one of the highlights of the day was a firm announcement on next year's Beetaloo Sub-basin shale gas plans.

The Beetaloo is considered one of the most prospective parts of the Northern Territory and now the Top End has lifted its fraccing moratorium, albeit with 135 conditions, Origin and partner Irish Falcon Oil and Gas have committed to a new appraisal program for next year. 

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

The $60 million program is planned to identify a preferred play ahead of a 2020 pilot program and a possible declaration of commerciality the same year.  

The area may have yields of up to 60 million barrels of oil equivalent or 60 million cubic feet of gas, according to RBC Capital Markets.  

"We think the Beetaloo is an underappreciated facet of Origin's business," RBC said recently. 

"We feel it represents a material growth option for an entity that is somewhat growth constrained given its strong market position in energy wholesaling and retailing and the low return dynamics of new renewables investments." 

Until now the Velkerri B Shale has seen well tests while the Lower Kyalla Shale, which sits above it, has been less understood, although data from cores highlights the presence of both oil and gas. 

 Reservoir indicators include high porosity, hydrocarbon saturations, good source rock, middle to high condensate potential and which will likely be conducive to fraccing. 

 Previously what was known about the formation had suggested it was clay-prone and not suitable to fraccing.  

 The Beetaloo Sub-basin, part of the larger McArthur Basin, is estimated to hold almost 70% of the NT gas resources and the majority of relatively cursory exploration has been centred there.  

Source: Energy News Bulletin

CSIRO have commenced monitoring landscape methane concentrations in the Beetaloo Sub-basin

Scientists from the CSIRO’s Gas Industry Social and Environmental Research Alliance (GISERA) have this week commenced measuring naturally occurring methane in the Beetaloo Sub-basin.

The Northern Territory Government has partnered with CSIRO’s GISERA to conduct baseline measurement and monitoring of methane emissions in line with the recommendations set out in the Final Report of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory.

The methane emissions research is the first in a series of projects expected to be rolled out over coming months that can help inform the Northern Territory’s decisions about potential development in the Beetaloo Sub-basin.

In order to provide a scientific understanding of seasonal variations, the research will include surveying in a range of seasons, across the dry, wet, and fire seasons.

Researchers will use mobile survey methods and technology on previously granted exploration permits in the Beetaloo Sub-basin area to capture this important baseline data.

CSIRO Research Director Onshore Gas and GISERA Director, Dr Damian Barrett said, “Such comprehensive information has not been available in Australia before, so this work will contribute significantly to the scientific understanding of natural methane levels in general, and provides a baseline for accurately quantifying any future industry impacts.”

Information about the recommendations specific to baseline monitoring can be found in the reform area of Safeguarding Water and the Environment.

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Another major milestone has been reached on the Northern Gas Pipeline (NGP) with leading energy infrastructure company Jemena announcing that construction of the 622km pipeline is complete. 

Antoon Boey, Executive General Manager of Corporate Development, Jemena confirmed the landmark was reached this week with all 622 km, and approximately 34,000 lengths of pipe, being welded, lowered in and now fully buried in the trench.

“The sheer scale of this project is enormous – the largest current gas pipeline project in Australia. This milestone is due to the fantastic effort of those working in remote, hot and often dusty conditions,” said Mr Boey.

“Overall the project is tracking on schedule.  Apart from the pipeline, we’re thrilled that construction of the Mount Isa Compressor Station is finished and completion of the Phillip Creek Compressor Station in the Northern Territory is imminent.”

The pipeline and both compressor stations will now be rigorously checked before gas commissioning later this year.

“When Jemena was awarded the contract to develop and construct the NGP in 2015 we committed to constructing the pipeline on time, safely, providing training and employment opportunities for people from the communities surrounding the pipeline, and introducing competition into the east-coast gas market,” said Mr Boey.

“What we’re seeing today is these promises being fulfilled. We are so proud of how the NGP has provided training, development, and other opportunities to people from the communities surrounding the pipeline.

“Almost 800 jobs have been created as part of the pipeline’s planning and construction phase – around 700 of which have been awarded to people from local communities along the pipeline route. Plus we’ve seen $120 million spent with businesses in the Northern Territory and Queensland.”

Mr Boey said the Northern Territory had a unique opportunity to grow its economy and contribute to the east coast gas shortage.

“Jemena is progressing its plans to extend and expand the Northern Gas Pipeline and will continue to work with the community to understand how they can contribute to this next phase of growth and activity.

“Should development of the Beetaloo Basin proceed as expected, we are
seeking to invest significantly more across Northern Australia. This could create around 4,000 new jobs during the project’s construction phase, building on the skills the NGP has already brought to the region.”

On commissioning, the NGP can deliver 90 TJs of much needed gas per day, with 70 per cent of available capacity in year one having already been contracted to support manufacturing and jobs in Northern Australia. 

Last month Jemena announced its agreement with Incitec Pivot Limited (IPL) to transport at least 32 TJs of gas per day to supply its Gibson Island facility. This follows Jemena’s foundation agreement with the Northern Territory’s Power & Water Corporation to transport 31 TJs of gas to IPL’s Phosphate Hill facility for 10 years.

“Discussions with other parties are also well advanced, and we remain confident that NGP will be fully contracted by the time it is operational later this year” said Mr Boey.

Media Contact: Murray Collins 0427 207 348

Building a productive onshore gas industry that protects our unique environment and delivers local jobs

Implementation Plan Released The Northern Territory Government has released its plan to implement the recommendations of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory (the Inquiry).

The Implementation Plan responds to the recommendations in the Final Report from the Inquiry.

The plan is in two parts. The booklet outlines government’s response to the Inquiry and how and when each key component will be implemented. This plan is supported by a list of all recommendations and further details how each will be implemented. Both the plan and the accompanying list of recommendations are available online at https://hydraulicfracturing.nt.gov.au

The recommendations deal with complex and often interrelated issues. They have been grouped into six major reform areas, and bring together recommendations that require a similar or coordinated response, such as developing mandatory Codes of Practice, or managing social and cultural impacts. The reform areas are:

• Strengthening Regulation;

• Ensuring Accountable Industry Practice;

• Safeguarding Water and the Environment;

• Respecting Community and Culture;

• Maximising Regional Benefits and Local Opportunities; and

• Planning for Industry.

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Gas from the Northern Territory will play a crucial role supporting Australian business and industry with leading energy-infrastructure company, Jemena, today announcing a new gas transportation contract for the $800 million Northern Gas Pipeline.

The new agreements will see Jemena partner with Incitec Pivot Limited (IPL) to transport at least 32 TJs of gas per day.

Jemena’s agreement with IPL is in addition to its 2015 agreement with the Northern Territory’s Power & Water Corporation to transport 31 TJs of gas to IPL’s Phosphate Hill facility for 10 years.

Jemena’s Acting Managing Director Antoon Boey said gas from the new agreement will supply Incitec’s Gibson Island facility in Queensland.

“Today’s announcement reinforces the leading role the Territory’s gas industry can play in creating and sustaining jobs in northern Australia,” said Mr Boey.

Mr Boey said the new agreement with IPL will see the manufacturer access an additional 32 TJs of gas per day from the expected commencement of the NGP’s commercial operations in December 2018 to 31 December 2019, with an option for extension.

“We have had a fantastic relationship with IPL, and are thrilled this additional gas will support IPL’s operations on Gibson Island, which employs a workforce of over 400 staff during normal operation and up to 800 staff during peak periods.”

“This gas gives much-needed certainty to Incitec, and is a positive for the people relying on the Gibson Island facility, who will benefit not only from jobs which rely on gas as a direct feedstock, but from the flow-on effects of having a vibrant local economy and industry.”

Today’s announcement means Jemena has contracted volume on the NGP to 70% of what will be its total available capacity in year one of its operations.

“Discussions with other parties are also well advanced, and we remain confident that NGP will be fully contracted by the time it is operational later this year” said Mr Boey.

He said the NGP’s construction continued to track to schedule, with first gas to flow late this year.

Today’s agreement comes shortly after Jemena announced that it has signed an agreement with Senex Energy to build, own, and operate the Atlas Gas Processing Plant and Pipeline, connecting Senex’s new ‘Atlas’ gas field in the Surat Basin in south-east Queensland with Jemena’s Darling Downs Pipeline and the Wallumbilla Gas Hub - the largest gas hub in the country.

Jemena Media Contact: 0427 207 348

Twelve trainees will today graduate from Jemena’s Gas Operator Training Program, marking the end of the $800 million Northern Gas Pipeline (NGP) project’s formal training and development package.

Northern Gas Pipeline Project Director, Jonathan Spink said more than 70 people from local communities had completed formal training and development programs as part of the NGP project, with graduates going on to secure employment on the NGP or in other parts of the gas industry.

To date, more than 375 jobs in regional and remote parts of the Northern Territory and Queensland have been generated by the NGP, including over 260 jobs for Indigenous Australians from the communities surrounding the pipeline route.

“From the outset we have been committed to creating opportunities for local people as part of the NGP project. Today’s graduates have helped us deliver on this vision and are to be commended for their dedication and hard work as trainees,” said Mr Spink.

“As we progress plans to expand and extend the NGP, we hope to deliver additional training and employment opportunities for people from the communities surrounding the pipeline route. While it is early days, we expect this expansion to create around 4,000 jobs across northern Australia at an investment of approximately $4 billion.”

Graduates of the Gas Operator Training Program completed units from the Certificate II in Gas Supply Industry Operations and are now well placed to apply for entry-level opportunities in the oil and gas industry.

Jemena expects to select two graduates of the six-week program to complete a Certificate III in Gas Supply Industry Operations after which they will commence apprenticeships as part of the Gas Operations Team.

Reaching key project milestones

Mr Spink said Jemena’s NGP project continues to track to schedule with the project achieving a number of key milestones over the last fortnight.

“In 2017, we constructed around 405km of pipeline and are well on the way to building the remaining 217km of pipeline this year. At this stage, we expect to have mainline welding completed by mid-June. Once welding has been finalised, the pipeline will be buried and safety tests will be conducted prior to gas being introduced into the pipeline later this year. At the same time, work on the Mt Isa and Tennant Creek Compressor Stations continues to track to schedule.”

To date, the NGP has created more than 770 jobs as part of its construction and planning phases.

More than 33,000 individual pieces of pipe measuring between 18 – 20 metres each have been laid out across the 622km NGP route. 

For more information about the Northern Gas Pipeline visit: http://jemena.com.au/industry/pipelines/northern-gas-pipeline

Jemena Media Contact: 0428 742 804

Chief Minister Michael Gunner today announced that Dr David Ritchie would be appointed as the independent officer to oversee implementation of the 135 recommendations from the scientific inquiry into hydraulic fracturing.

Mr Gunner said that Dr Ritchie’s wealth of experience would help give the community confidence that all 135 recommendations would be thoroughly implemented.

“Dr Ritchie brings over 20 years of experience as a Chief Executive Officer to this role including heading the Department of Natural Resources, Environment and the Arts, and the Aboriginal Areas Protection Authority,” Mr Gunner said.

“As a member of the inquiry panel, Dr Ritchie’s knowledge and familiarity with the recommendations of the report make him ideally placed to ensure implementation is done honestly and effectively.

“There are passionate Territorians who were hoping for a different decision this week and some are concerned about Government’s capacity to implement these reforms,” Mr Gunner said.

“I want every Territorian to be confident that we will faithfully implement every recommendation so we can benefit from the jobs and wealth creation of this industry while also protecting our precious environment.

“The appointment of Dr Ritchie will ensure implementation is transparent and that the public can hold the Government to account.”

Dr Ritchie’s areas of specialisation include Cultural history and engagement, Natural Resource Management, Public Policy, Governance, Risk Assessment, Organisational Development and Community Engagement.

He is the current Chair of the Northern Territory Planning Commission.

A 3D printing technology for metal that can be used in the operations is among the oil and gas projects to share in $1.8 million in new National Energy Resources Australia funding. 

The new technique, being developed with technology firm SPEE3D, Charles Darwin University and industry partner Inpex, can operate around 1000 times the speed of conventional 3D printing at a fraction of the cost. 

It is said to have the potential to revolutionise industrial activities in remote areas by allowing onsite metal part production. 

"The technology will enable operating environments to fabricate necessary parts on site and limit costly delays associated with downtimes that can be in the order of tens of millions of dollars," NERA said. 

It is among seven applications that received new co-funding from NERA's $15.6 million Project Fund, upon the formalising of contracts, and is said to align with the organisation's Sector Competitiveness Plan 10 year roadmap for the national upstream energy sector. 

NERA chief executive Miranda Taylor said the new projects supported the organisation's goals. 

"Projects that receive NERA funding are selected to deliver results on a national scale and have sector-wide impact, assisting the energy resources sector unlock a potential $10 billion in value that NERA has identified," Taylor said. 

She said the projects would aid in ensuring Australia's global competitiveness by adapting to the changing global and domestic energy market and accelerating technological change through innovation and the improved transfer of knowledge and technology. 

The seven new projects bring the total number of projects NERA is delivering across Australia to 32 and the number of project partners directly involved to more than 80. 

Other projects to receive funding were a collaboration between CSIRO, the University of Western Australia and industry partners including AWE and Whitebark Energy to develop systems to monitor water, soil, atmospheric and seismic conditions to measure the impact of past and future oil and gas activities in the northern Perth Basin. 

From this, a publicly-available scientific database will be established to provide reliable baseline methane data to enable ongoing monitoring.  

"The project will lead to better informed decisions about the use of water resources in the area and provide the community and regulators with the means to make informed decisions about oil and gas activities in the Perth Basin," NERA said. 

Another project to increase understanding  of the Great Artesian Basin and how it relates to resource development project will be led by the University of Queensland and bring together a team of independent reviewers and contributors including Australia Pacific LNG, Santos and Arrow Energy. 

An effort to reduce hydrate risk in subsea jumpers connecting to larger manifolds and pipelines will be once again be led by the University of WA and take in oil and gas partners including Chevron, Total E&P UK, Woodside and OneSubsea. 

A virtual operating environment project led by Quadrant Energy and bringing together Curtin University Innovation Centre, Flicq, Optika and AWS will develop and install a novel integrated system to provide early notice of changes in plant operating conditions such as leaks or rotating equipment faults.  

Origin Energy and the University of Sydney will develop a machine learning-based sub-surface geological model and an Australia-wide project to reduce the assessment burden on exploration companies associated with new survey activities will take in partners including BP, Quadrant, Caltex, CRC Care and CSIRO.

The Turnbull government’s highly vaunted Northern Australia ­Infrastructure Facility program will be overhauled to “make it ­easier for projects to attract ­finance” from the fund.

With the NAIF having processed only one major project since its establishment in mid-2016, Resources Minister Matt Canavan will today announce changes in a move to “increase its flexibility and improve its potential” and accelerate investment in northern Australia.

Mr Canavan said the program had “proven more challenging than we thought”.

“It’s a challenging exercise. It’s quite an innovative way of seeking finance for infrastructure,” Mr Canavan said. “When you find that what you expected is not working as intended, you change tack ... and that’s what we’re doing with these changes.”

The government will amend the investment mandate of the program, based on findings of an independent review of the facility by prominent business leader Tony Shepherd.

“Mr Shepherd consulted widely with NAIF, investors, project proponents and governments. He found the important need to ­develop the north still exists, but there have been challenges to making it happen,” he said.

“The government shares this view and we are committed to ­developing industry and job opportunities in northern Australia.

“We will implement changes to the NAIF investment mandate recommended by the expert ­review, in response to a key finding that (it) is too restrictive.”

Mr Canavan said he had been advised that a “number of existing proposals could be finalised ­because of these changes”.

“I’m also hopeful that this can be a reset and relaunch that ­attracts new interest to look again at the NAIF for finance to develop the north,’’ he said.

The program offers up to $5 billion over five years in concessional finance to “encourage and complement” private sector investment in northern Australia infrastructure, including developments in airports, communications, energy, ports, rail and water.

Its board last year made its first investment decision, indicating to the government it would offer ­financial assistance of about $16.8 million for the Onslow ­Marine Support Base Project in Western Australia.

Mr Canavan said the changes to the program’s investment mandate would include the removal of the 50 per cent cap, increasing the amount of finance available to infrastructure projects by “allowing the NAIF to finance up to 100 per cent of a project’s debt”.

The change would avoid the federal government inheriting the major­ity of financial risk in a project.

“There are currently 17 projects in the due diligence and execution phases across all three northern jurisdictions. There are seven in the Northern Territory, five in Western Australia and five in Queensland,’’ Mr Canavan said.

“There are 90 active inquiries in the pipeline. These are from ­diverse sectors including energy generation and gas pipelines, transport, tourism, agriculture, manufacturing, water infrastructure and communications.”

Source: The Australian