Industry News

ORIGIN Energy and its joint venture partner Falcon Oil & Gas have accelerated drilling plans in the Beetaloo Sub-basin, after preliminary drilling data from the Kyalla 117 N2 onshore appraisal well yielded exciting results.

In a statement this week Irish-headquartered Falcon, which holds a 30% interest in the well, noted Kyalla 117 N2 had now been completed to a total vertical depth of 1,895 metres.

During drilling the well showed elevated gas shows with relatively high liquids, which Falcon CEO Philip O'Quigley said represented an "excellent re-start to the Beetaloo drilling program."  

Operator Origin (70%) is now preparing to drill the horizontal section of the well within the Kyalla formation.

"The election by the joint venture to immediately proceed to the drilling of the horizontal section signifies the [partners] confidence in the potential of the Kyalla shale," O'Quigley said.

The JV also acquired 45 metres of conventional coring in each of the Upper and Lower Kyalla reservoir sections.

Sidewall cores and extensive wireline logging has also been acquired, though those results have not yet been released.

 "Electric logs calibration by core analysis results together with the planned fraccing of the horizontal section will give us a more quantative view on this play," O'Quigley said.

Once drilling of the horizontal section of the well is completed, it will be fracced and then production tested.

Production testing is expected to take around 90 days, and Origin plans to continue operations during the wet season.

The big-budget Kyalla 117 N2 is the first of two wells the joint venture plan to have drilled by the end of this year, targeting the Kyalla shale liquids gas play in exploration permits EP117, EP76, and EP98.

When the well was spud in October both industry and the Northern Territory government cheered the symbolic new era of investment for the Top End.

Industry lobby body the Australian Petroleum Production and Exploration Association said the resources being targeting would play a "vital role in revitalising the Territory's economy".

Source: Energy News Bulletin

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Iron ore billionaire Andrew Forrest has joined Mike Cannon-Brookes as a lead early backer of the $20 billion-plus Sun Cable project set to drive Asia's transition to cleaner energy.

The pair are the biggest of a group of individual investors that have jointly invested less than $50 million in the ambitious project, which would export solar power generated in outback Australia to Singapore.

"It's really just a meeting of minds and a common purpose, and the broader recognition that we have a huge energy transition to undertake, which is a vastly larger task than people appreciate," said David Griffin, chief executive of Sun Cable.

Mr Forrest's private company Squadron Energy, which is also backing an LNG import project in NSW, and Mr Cannon-Brookes' Grok Ventures are joint lead investors in the oversubscribed capital raising. The other investors have not been disclosed.

Mr Forrest said Australia's potential to be at the centre of Asia's transition to clean energy presents the Australian economy with enormous opportunities, "not just for reducing emissions but also for the economic march of our nation and global competitiveness".

"Sun Cable’s Australia-Singapore Power Link project has the potential to be an important part of this nation-building journey," he said on Wednesday.

Mr Cannon-Brookes, who revealed in an exclusive interview with The Australian Financial Review in September that he was backing the project, described the venture as "massively exciting with world-changing potential".

“In a carbon-constrained world, Australia should be a winner," he said.

"We have the resources, the ingenuity and the drive to get it done – we just have to put it all together. If we nail this, we can build a new export industry for Australia, create jobs and set our economy up for the future."

The funding will underpin early development work for the project, which would link Darwin with Singapore via an underwater power cable. It would help progress the venture towards financial close, targeted for late 2023.

The project, which was revealed earlier this year, involves a 10 gigawatt solar farm and circa 22 gigawatt-hour battery storage plant, to be built near Tennant Creek in the Northern Territory. Power would be transmitted through a high-voltage, direct-current 4500 kilometre interconnector to Singapore, which would include a fibre-optic cable.

Squadron chief executive Stuart Johnston said part of the attraction of the project was its use of existing technology that had not been applied at such a scale before, rather than relying on processes yet to be developed.

Source: Australian Financial Review

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The offshore regulator has approved Eni’s plans to drill a third a development well at its Blacktip field offshore Western Australia in permit WA-33-L in the Bonaparte Basin, some 300 kilometres west-south-west of Darwin. 

The National Offshore Petroleum Safety and Environmental Management Authority gave the Italian oiler the go-ahead, it said last week.  

Blacktip started operation a decade ago and produces gas and condensate from two wells. Eni has a 100% interest in the project.  

The field was discovered in 2001 and is in water depths of around 50m.  

The main field reservoir of Blacktip is a four-way dip closure made of stacked gas-bearing sandstones. 

The sandstones are of the Lower Triassic Mt Goodwin formation and Permian - Upper Carboniferous Keyling and Treachery formations. Eni says recoverable reserves are around 150 million barrels of oil equivalent. 

The offshore facilities consist of a well-head platform, two producing wells, flowlines and a subsea gas export pipeline bringing gas, condensate and produced water to the Yelcherr Gas Plant near Wadeye in the Northern Territory.  

The gas is used for power production in the Top End.  

Source: Energy News Bulletin

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Shell Prelude latestes eNews now available.

Perth, Australia – INPEX confirmed the 100th shipment of liquefied natural gas (LNG)

departed this morning on the Pacific Arcadia LNG carrier from the Ichthys LNG onshore processing facilities located near Darwin in the Northern Territory.

INPEX President Director Australia, Hitoshi Okawa said the 100th LNG cargo represents a significant milestone for INPEX – coming just 13 months after the maiden LNG cargo was shipped last year.

“Reaching the 100th LNG cargo milestone is a credit to our workforce and reinforces our position as a safe, reliable and efficient energy supplier,” said Mr Okawa.

“INPEX-operated Ichthys LNG facilities are safely ramping up to full production, exporting 100 LNG, 24 liquefied petroleum gas and 46 condensate cargoes since October 2018.

“Ichthys LNG creates jobs and business opportunities and is projected to generate further economic and community benefits in Australia for decades to come.”

Ichthys LNG is one of the largest and most complex energy developments in the world and represents the single largest overseas investment by a Japanese company.

Mr Okawa also said Ichthys LNG is central to INPEX’s operations in Australia and forms a cornerstone of the Company’s global energy business.

“Our priority is to ensure our LNG facilities in Australia are fully utilised over their expected 40-year lifespan,” he said.

Media contact:

Ms Susie Pantall, Communications Manager, INPEX Australia

Office: +61 (0) 862136634

Mobile: +61 (0) 403330020

Email: susie.pantall@inpex.com.au

RBC Capital Markets analyst Ben Wilson has just returned from a trip to Santos’ Western Australian and Northern Australian assets including Varanus Island gas plant Darwin LNG.

He said the trip was important given the two states represent the company's largest prospects for growth.  

"With the transition of Quadrant operatorship of WA to Santos complete and Conoco-Santos Darwin transition scheduled for the first quarter of 2020, Santos is well positioned to execute these growth ambitions," he wrote.  

Santos announced the Quadrant buy, valued at US$2.15,  last year and in October announced it would take ConocoPhillips' Northern Australia assets for close to $1.4 billion. In both cases it shared some of the assets already.  

He noted the transfer of staff from both, meaning assets remain managed by those who understand them.  

Santos is now supplying 400-500 terrajoules per day into the WA market though has not drilled a development since 2012.  

Output from Varanus Island and Devil Creek will peak in the second half of next year with the beginning of the new Alcoa contact, he said.  

Santos' size, with an enterprise value of over US$15 billion and free cash flow of $1 billion a year, now means it is harder for individual projects to have much of an impact on share price.   

"For a market which increasingly asks ‘so, what have you done for me lately?', the impetus to create and execute growth projects only intensifies as an E&P company grows larger."  

However with a recently larger footprint in the west and north of the country it now has a "diverse array of impactful growth levers".  

Those levers include the Dorado find's oil and related gas, Barossa field backfill to Darwin LNG and the longer term multi-train expansion via McArthur Basin unconventional and Browse and Bonaparte Basin 2C resources.   

He also suggests farm downs next year, unsurprising for anyone who has been following the company. It has long said it would farmdown a portion of the 80% of Dorado it shares with Carnarvon Petroleum (20%) and when it announced the ConocoPhillips acquisition it would sell a 25% to project partner SK E&E.  

"Longer term we also see McArthur Basin and Narrabri as farm down opportunities," he said, though the latter is still subject to approval from the state of New South Wales.  

At Darwin LNG feed gas for the possible additional trains could come from the MacArthur Basin in the Northern Territory. It is permitted for up to 10MMtpa. 

Source: Energy News Bulletin

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Empire Energy Group (ASX:EEG) (OTCMKTS:EEGUF) CEO Alex Underwood is interviewed by Mining Executive Julian Malnic on the next exciting phase of shale gas and shale oil discovery in the Northern Territory's Beetaloo and McArthur Basins.

Empire recently sold down its producing US areas to focus its resources on unlocking the vast reserves of NT gas have become a priority for larger energy companies like Santos and Origin.

The company is one of the smaller and most active in the field and is currently acquiring seismic data to inform 2020 drilling. The discoveries offer the potential for new stand-alone LNG exports to nearby Asia markets, the supply of lower-cost gas to eastern markets, and liquid fuels self-sufficiency for Australia, and will form an important component in the development of Northern Australia.

To view the video interview, please visit:
https://www.abnnewswire.net/press/en/99517/eeg

THE Barossa project has taken another step towards final investment decision after ConocoPhillips awarded a contract for a floating production storage and offloading vessel to Modec International.

The FPSO contract is the project's biggest - comprising engineering, procurement of materials, equipment and services, construction, installation, commissioning and testing of the facility.  

Santos holds a 25% interest in the Barossa joint venture along with partner and operator ConocoPhillips (37.5%) and SK E&S (37.5%). 

Barossa has been earmarked as backfill for the Darwin LNG plant as the Bayu-Undan field is set to go into decline early next decade.  

The field is 300 kilometres north of Darwin in petroleum permit NT/RL5  in Commonwealth waters offshore the Northern Territory.   

The core long-life project is nearing the end of its front-end engineering phase and includes the FPSO facility, subsea wells and production system, and a gas export pipeline.  

The 260km pipeline will transport gas and will be tied into the existing Bayu-Darwin pipeline, to be turned into LNG and exported.   

The FPSO will also store condensate for periodic offloading tankers.  

"This contract with Modec is the result of a FEED competition and its award is our biggest step towards pushing the button on the development of Barossa." Santos CEO Kevin Gallagher said.  

"The project is technically and commercially robust, and we are closing in on FID early in the new year, with contracts for the subsea umbilicals, flowlines and drilling of six subsea production wells to be awarded in the near future." 

"The Barossa Project will provide a new source of gas to Darwin LNG when the current offshore gas supply from Bayu-Undan is exhausted," ConocoPhillips said in a statement.

Source: Energy News Bulletin

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DARWIN will have a new condensate processing plant at a cost of $1.2 billion in a joint venture between McDermott and Darwin Clean Fuels.

This will be first new refinery built in Australia in 45 years, reversing a trend that has seen multiple refineries shuttered or mothballed over the past decade-plus as Australia opted to send crude to and import petroleum from Asia's burgeoning supply of new, low cost mega-refineries.

It will also be the first in Australasia that will be entirely devoted to condensate, which Australia currently sends to the UAE in large quantities according to a recent Resources and Energy Quarterly.

The new processing plant will supply high quality petrol, diesel, LPG and jet fuel to the domestic market, with a capacity of 60,000 barrels per day of condensate and 10,000bopd of LPG and will be the Top End's first refinery.

The project is being delivered through a joint venture between McDermott and private company Darwin Clean Fuels.

Engineering giant McDermott signed the memorandum of understanding with DCF yesterday. Under the agreement McDermott will conduct a feasibility study, technology, front-engineering design and engineering procurement and construction for the condensate processing plant.

"The refinery would leverage our proprietary technologies, including alkylation and sulphur recovery, and is evidence of McDermott's technology-led EPC capabilities," McDermott Asia Pacific senior vice president Ian Prescott said.

"Our engineering feasibility studies often serve as the essential underpinning of client decisions about moving forward with major investments."

Source: Energy News Bulletin

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SENATE Estimates in Canberra heated up last week, with both Senator Pauline Hanson and Senator Rex Patrick putting the spotlight on the national offshore regulator’s conduct when ordering the shutdown of the Northern Endeavour FPSO in the Timor Sea offshore Western Australia earlier this year.

The National Offshore Petroleum Safety and Environmental Management Authority issued Northern Oil & Gas Australia (NOGA) a prohibition order in July over safety concerns.

The company owns the Northern Endeavour FPSO and two production licenses, WA-18-L and AC/L5, in the Timor Sea.

The contracted operator is Upstream Production Solutions.

The notice was issued shortly after an object fell from the vessel and corrosion was identified aboard. According to a NOPSEMA release the FPSO was in a condition that a "release of hydrocarbons" could catch fire, risking multiple lives.

However the two senators in Estimates believe NOPSEMA acted too soon and never physically inspected the vessel.

"NOPSEMA did not go and inspect the Northern Endeavour but relied on a desktop calculation that showed, if the four-kilo object had fallen from a height of four metres onto an unprotected head, then there would have been a fatality," Hanson said.

"You could have actually given an improvement notice rather than a prohibition, which shut down the company."

The statement was taken as a ‘question on notice.'

Months after the notice NOGA and its associated subsidiary companies TOGA Services and Timor Sea Oil & Gas Australia, entered into voluntary administration.

In Estimates last week, Senators Hanson from One Nation and Patrick from the Centre Alliance, expressed concerns that NOGA was the only Australian company in the region, aside Chinese-owned firms and Indonesian companies.

"We have got an Australian company that has now gone into voluntary administration, which is never a good thing. It is one of the few companies we have working on the southern plateau," Patrick said.

"If it were to shut down, all that would remain are the Chinese and the Indonesians because we don't have much in the way of presence there, having been there and having had a very good look around. There is a national interest perspective to this."

Hanson also accused NOPSEMA of "raiding" Lloyd's Register International's offices in Perth without due cause.

"In mid-May of this year, NOPSEMA raided the Perth offices of Lloyd's Register International. We understand NOPSEMA was only really interested in the records relating to Northern Endeavour," Hanson told the committee.

However NOPSEMA Safety and Integrity head of division Derrick O'Keeffe disputed this, saying Hanson's allegations were not correct and the regulator has not "raided anyone's office."

Source: Energy News Bulletin

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