Following the start-up of the $225 million Minerva gas project in January 2005, Victoria now has several major gas processing plants planned for or operating on its coastline, although it must be noted that two of these projects are drawing gas from Tasmanian waters.
March: Casino in play
On March 8, 2006, Victorian customers received first gas from the $A200 million Casino gas project in VIC/P44.
The Casino gas field is in about 70m of water, 30km offshore from Port Campbell, western Victoria. The project is operated by Santos. The other partners are Australian Worldwide Exploration and Mitsui subsidiaries.
The TRUenergy Iona Gas Plant will process all the gas from the field and provide about 120 terajoules of gas per day or enough natural gas to supply nearly a million homes.
Under the initial 12-year contract, up to 420 petajoules of gas will be transported from the subsea wellheads through a sea-floor pipeline that comes ashore via a directionally-drilled underground shore crossing, for processing at the Iona gas plant.
May: Santos takes another slice of Kipper
On May 10, Woodside sold its 30% stake in permit VIC RL/2 to Santos, lifting Santos’ unitised position in the Kipper project, which straddles two permits, from 14% to 35%.
Santos managing director John Ellice-Flint said the deal gave the company a material position in this major project and the acquisition was a "logical addition" to the company's extensive existing Gippsland gas assets.
While Santos is now the largest individual shareholder in Kipper, ExxonMobil and BHP Billiton still have 32.5% each in the project and Exxon remains operator.
Kipper gas will be processed at the Longford facility owned by ExxonMobil and BHP Billiton.
The Victorian Government last year moved to withdraw the retention leases covering Kipper and offered a production license, forcing ExxonMobil to fast-track a development plan. In December, the Kipper partners agreed to start front-end engineering and design (FEED) work. First gas production is expected in 2009.
July: BassGas blows budget badly
THE troubled BassGas project finally started sales of gas and liquids in July with most of its facilities having been fully commissioned. But the development's budget blew out from the original $450 million to about $750 million.
The bulk of the cost blow-out has been caused by the need to rectify design problems. Origin Energy is blaming the original engineering, procurement and construction contractor, Clough Engineering, while Clough says the Origin-led joint venture is at fault. Arbitration with Clough on matters relating to the construction contract is continuing.
The original schedule was to reach the Ready for Start Up milestone by June 8, 2004. Clough claimed to have reached this milestone on November 10, 2004. The JV disputed this and Origin took over management of the project from Clough in December 2004.
Once fully commissioned, the BassGas project is expected to have a capacity of about 23 petajoules of sales of gas per annum, with around 1 million barrels of condensate and 70,000 tonnes of liquefied petroleum gas.
The project is drawing its gas from Bass Basin, Tasmania reservoirs.
September: Love you Longtom
Following extensive testing, Nexus Energy suspended its Longtom-3 appraisal well as a future gas producer. A second production test yielded 77 million cubic feet per day (MMcfd) of gas from the lower sands through a 1¼-inch choke directly to the flare. The well had earlier flowed 23MMcfd of gas on production test from upper sands that did not test in the original appraisal well.
Nexus managing director Ian Tchacos said the flow capacity of Longtom-3 alone was expected to be sufficient to supply the anticipated maximum contract rate requirements for the Longtom field.
With development to occur next year, first Longtom gas production is expected to start in second half 2008. Gas from the field will be produced via subsea wells linked by pipeline to the Santos-owned and operated Patricia/Baleen gas facility.
A gas sales agreement signed with Santos a year ago will see up to 450 petajoules of Longtom gas processed at this facility, near Orbost in northeast Victoria. Santos has also agreed to purchase the first 350PJ at defined prices. Nexus hold 100% of Longtom.
October: Thylacine alive but elusive
In its September quarterly report, Woodside said first production from the $A1 billion Otway Gas Project – drawing form the offshore Tasmania Thylacine field, and late from the offshore Victoria Geographe field – had been pushed back to the end of the first quarter of 2007.
This delay was due to construction hold-ups at the onshore gas plant, which is being built under a lump-sum contract. The project, held in partnership with Origin Energy, had originally been flagged for first gas before the New Year.
The delays will defer production by about 500,000boe, cutting Woodside's revenue by about $17 million for the year.
December: Henry to get FEED
In mid December, VIC/P44 joint venture partner Australian Worldwide Exploration said the consortium had agreed to start work on FEED at the Henry gas field.
The FEED would primarily focus on the development of the Henry gas field but would also include the design of a pipeline and umbilical allowing tie-in to the Martha gas field and any future discoveries at the nearby gas prospects, Netherby and Pecten East. Both prospects are scheduled for drilling in fourth quarter 2007.
The cost of the Henry gas field development is estimated to be about $140 million, but AWE said the FEED studies would define the cost estimates more accurately before project sanction.
The study is expected to be finished by September 2007 with first gas production currently forecast for first quarter, 2009.
The Henry gas field is about 8.5km north of Casino gas field, which started commercial production in early 2006.
Participants in VIC/P44 and the Casino and Henry gas developments are operator Santos with a 50% interest and AWE and Mitsui, both with 25%.
