AUSTRALIA

NOPSEMA refuses Wheatstone plan

CHEVRON Corporation's Wheatstone project start-up and operations environment plan has been refused by the Commonwealth regulator and will need to be resubmitted.

NOPSEMA refuses Wheatstone plan

It is a fresh blow to the US super-major's LNG aspirations which have seen Gorgon stall soon after its late start-up and Wheatstone already delayed by six months.

The National Offshore Petroleum Safety and Environmental Management Authority has sought additional information from Chevron since last December, and said yesterday afternoon that it was still not reasonably satisfied that the proposed plan was robust enough.

It has told Chevron to resubmit its start-up plan, which covers the offshore Wheatstone platform, its subsea infrastructure and the pipeline to the onshore facility at Ashburton North.

NOPSEMA is unhappy that Chevron has not outlined an appropriate implementation strategy and monitoring, recording and reporting arrangements for the start-up for the platform and pipeline, which are 50km from the Montebello Islands marine park and the Class A reserve of Barrow Island.

NOPSEMA said the proposal was not appropriate for the nature and scale of the activity and failed to demonstrate that the environmental impacts and risks of the activity will be reduced to as low as reasonably practicable.

Chevron can now pay to submit a new plan, which is likely to take at least another 30 days to assess.

Response

"We are responding to NOPSEMA's feedback and will address outstanding matters," a Chevron spokesperson told Energy News.

"A revised Wheatstone project start-up and operations environment plan will then be submitted.

"This decision does not impact the critical path of the Wheatstone project."

The offshore hydrocarbon infrastructure will produce and transport gas, condensate, and produced water from the subsea wells to the platform via subsea flowlines.

There the hydrocarbons will be dehydrated and dewatered, and the dry gas and condensate are routed through the trunkline to plant near Onslow.

Chevron has also asked for approval to buy gas from the Dampier to Bunbury Natural Gas Pipeline to help commission the plant, prior to production from the wells. Once the wells are turned on, it will also conduct further testing.

The gradual production period, when the system is tested and ramped up to steady-state, is expected to last between six months and two years from the time fluids are produced from the wells, with start-up expected later this year and first LNG in mid-2017.

Julimar

NOPSEMA earlier told Woodside Petroleum that it is not satisfied with the Julimar operations environment plan for WA-49-L and WA-26-PL. Julimar will supply gas into the LNG plant.

The 5-8 well Brunello field, which is also supported subsea infrastructure and associated pipeline and flowlines to connect the wells to the Wheatstone platform.

Woodside submitted its Julimar plan in December, and it was refused in March.

The oiler resubmitted its plans yesterday, and is hoping for a positive response in mid-May.

NOPSEMA was not satisfied that Woodside's initial plan was appropriate for the nature and scale of the field, did not reduce the environmental impacts and risks sufficiently, and had insufficient monitoring.

Ramp up

The setbacks for the wider Wheatstone project came on the same day that Wheatstone subcontractor Cape said its results for the first quarter were buoyed by the faster than expected ramp up on the project.

Cape has two contracts at Wheatstone valued at $A340 million, providing scaffold erection and dismantling and painting, insulation and fireproofing services to lead contractor Bechtel.

Cape has two contracts at Wheatstone, providing scaffold erection and dismantling services to lead contractor Bechtel.

Last month Chevron struck its first domestic gas supply deal for its $US29 billion project for 20 petajoules per annum over seven years to Alinta Energy once the 200TJpd domgas project begins in 2018.

Wheatstone is officially 65% complete, and has been at that level for more than a year, however Chevron's spokesperson said the company was no longer reporting percentages, although the development is making "steady" progress to first gas.

Earlier this year Macquarie Group said Wheatstone's price tag could soar 14% to $US33 billion after its start date was delayed by six months, although Peter Coleman, CEO of Wheatstone joint venture partner Woodside Petroleum, said he considered the delay a "prudent" step.

Wheatstone, which will produce about 8.9 million tonnes of LNG per annum, is operated by Chevron for Woodside, Kuwait Foreign Petroleum Exploration Company, Kyushu Electric Power Company (Kyushu) and PE Wheatstone, part-owned by of Tokyo Electric Power.

Wheatstone is expected to produce for 30 years.

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