Projects underway in the North West Shelf

Projects in the North West Shelf have long-dominated Australia’s offshore gas development, and this year is no exception, with interconnections between new and existing infrastructure being a primary focus of development.

In March, the North West Shelf Joint Venture took a final investment decision for the development of the $5 billion North Rankin 2 (NR2) Project.

The NR2 Project will recover remaining low pressure gas from the North Rankin and Perseus gas fields and will involve installation of a second platform that will stand in about 125 m of water. The project will supply gas from the North West Shelf for another 25 years, starting in 2013 when it is commissioned.

The proposed 23,600 tonne North Rankin B platform will be connected by a 100 m bridge and various tie-ins to the existing North Rankin A platform. Upon completion, both platforms will be operated as a single integrated facility.

April saw the award of two major contracts for the NR2 project, with Eos being awarded the Detailed Engineering and Procurement Management Services contract for the project and J. Ray McDermott subsidiary PT McDermott Indonesia being contracted to construct the North Rankin B platform substructure and piles.

The year also saw the completion of pipeline works on Woodside’s Perseus-over-Goodwyn Gas Project, another major field being developed to ensure the long term supply of NWS gas.

The project will bring the Perseus field into production to fully utilise the Goodwyn platform’s production capacity as it becomes available. The Perseus field represents about one third of the NWS Venture’s gas resources.

The project will establish a subsea infrastructure system tied back to the Goodwyn platform to access the majority of the remaining Perseus reserves. The project’s first phase involves the installation of three Perseus subsea wells, an additional subsea well in the Searipple field, a subsea trunkline linking the wells to the Goodwyn platform and a new riser and modifications to the Goodwyn platform.

BJ PPS has completed flooding, gauging, hydrostatic testing and pre-commissioning services for the 16-in., 24.1 km subsea line as well as two 10-in. pipelines measuring 1.4 km and 1.8 km respectively, which are located in water depths of 130 m, approximately 20 km northeast of the Goodwyn Alpha platform and 7.8 km northwest of the North Rankin platform. The pipeline system is scheduled to begin operating in October, following the commissioning of the final well in the Perseus field.

The neighbouring Angel gas and condensate field also achieved major project milestones, with the start of subsea umbilical installation in April.

Located in 80 m of water, the development will involve construction of the third fixed platform, which will be remotely operated, four wells, and a 49 km pipeline that will connect the new platform with the North Rankin platform.

Installation of the umbilicals started after the successful installation of the 7,400 tonne topsides for the project. The platform will be capable of processing 800 million cubic feet (MMcf) of gas per day, when completed in the fourth quarter of 2008.

Some major offshore pipeline work has commenced on Woodside’s Pluto LNG Project, located about 190 km northwest of Karratha.

The multibillion dollar project will involve the development of the Pluto and Xena gas fields in the North West Shelf Area. The initial project phase will include a single LNG production train with forecast production of 4.3 million tonnes per annum (MMt/a). The train will be connected by a 180 km, 36 in. offshore pipeline to a platform in 85 m of water, which in turn will be connected to five subsea big bore wells on the Pluto field. Woodside has selected the Burrup Peninsula as the site of the LNG facility.

Offshore dredging work started in February, with the awarding of a $30 million contract to Netherlands marine company Van Oord. The contract involves pre-trenching of 6 km of the pipeline route and also includes drilling, blasting and onshore works. The backhoe dredger Hippopotes will carry out the work, which is expected to be completed shortly.

February also saw the award of a $166 million contract for offshore installation work on the project to seabed-to-surface engineering and construction contractor Acergy. The contract includes the installation of subsea manifolds, valve structures, umbilicals, a mono-ethylene glycol injection line and pipeline stabilisation as well as the tie-in of flowlines in water depths of up to 850 m. Engineering work started in April last year with offshore installation by the Toisa Proteus scheduled to commence in the second half of 2009.

Woodside said that it is progressing engineering to be ready for a potential investment decision for Pluto Train 2 later this year. The company said that it is currently in discussions with potential contractors about the engineering, procurement and construction management contract. Technip and the Foster Wheeler-WorleyParsons joint venture have been engaged to prepare a project execution plan as part of the selection process for the FEED contract.

Upcoming NWS projects

In April, Santos announced the Final Investment Decision for the development of the Reindeer gas field and associated pipeline, located in the offshore Carnarvon Basin. The Reindeer field 2P reserves are estimated at approximately 485 petajoules (PJ) of sales gas and 1.6 million barrels (MMbbl) of condensate.

Gas from the field will be produced via an unmanned, minimum facility wellhead platform located in 65 m of water. Gas and liquids will be exported from the platform to a new Devil Creek onshore gas processing plant via a single 105 km pipeline.

Sales gas will be compressed and exported to the Western Australian domestic gas market through an onshore single 3-phase 16 in. raw sales gas pipeline through the existing Dampier to Bunbury Natural Gas Pipeline.

Clough will be managing the engineering, procurement and construction of the Devil Creek facility, with further contracts for the Reindeer Project’s offshore facilities expected to be announced during the second quarter of 2008. First gas is targeted by the end of 2010.

Meanwhile, drilling has been progressing successfully at the neighbouring Julimar development, which is planned to be connected to the Devil Creek plant.

Project operator Apache Australian unit managing director Tim Wall said that the company is continuing to conduct conceptual engineering for the project, with recent tests confirming that the prospect is expected to contain 2-4 trillion cubic feet (Tcf) of gas.

He said it is envisaged that an approximately 100 km long pipeline will be constructed from the Julimar gas discovery to Apache’s Devil Creek prospect where, like the Reindeer development, gas will be transferred to the Dampier – Bunbury Natural Gas Pipeline. The development of the project is estimated to cost $2 billion with a final decision expected by the end of the year.

In March this year, Chevron announced plans to develop the Wheatstone gas field as a greenfield project, ending speculation on the potential for combined development with the Pluto project.

As part of the proposed development, Chevron plans to construct a gas processing facility on the northwest coast of mainland Australia. It is proposed to have initial capacity of at least one 5 MMt/a LNG production train with expansion capacity for additional production trains. The facility will also provide commercial domestic gas to the local market.

Located 145 km offshore in water depths of around 200 m, the initial phase of the development will tap an estimated 4.5 Tcf of natural gas resources located within the two Chevron-operated permits that include Wheatstone.

Chevron Australia is currently preparing design studies for development and production, site evaluation, and further field appraisal work. Front-end engineering and design is expected to commence in 2009.

In January, plans were announced for Chevron’s Gorgon LNG Project. With a nominal development life of around 60 years, the project has an estimated resource base of more than 40 Tcf of gas located up to 200 km offshore in water depths of up to 1,300 m.

The company plans to develop three 5 MMt/a LNG production trains in quick succession rather than the two production trains previously to be developed, claiming that the new plan “improves project economics and addresses mounting industry cost pressures.”

The Greater Gorgon Area development plan is based on the installation of a subsea gathering system and pipelines from the Gorgon and Jansz fields to Barrow Island. A gas processing facility located on the central-east coast of Barrow Island will process the gas with LNG being shipped to international markets. Compressed domestic gas would be delivered via a 90 km subsea pipeline from Barrow Island to the Western Australian mainland, connecting the existing pipeline infrastructure like the Dampier – Bunbury Natural Gas pipeline.

Recently, the company awarded a frame agreement to VetcoGray, a GE Oil and Gas business, for the supply of subsea equipment and support services for the project which include the supply of manifolds, pipeline termination structures, pipeline end terminations, trees with subsea control modules, wellheads, production control systems, system integration testing, installation and operations support.

While Chevron has approval for the development of two 5 MMt/a LNG facilities on Barrow Island, the company will need additional approval for the extra train it is planning.

“During the next 12 months, the project will be working with government to secure approvals for the additional train, commence front-end engineering and design, expand the capacity of the project team and consider early works on Barrow Island,” said a Chevron statement.

Finally, the Scarborough Gas Field has recently been reinvigorated after a major setback caused last year.

Last May, Californian Governor Arnold Schwarzenegger rejected BHP’s application for the $970 million Cabrillo Port LNG Deepwater Port, which was proposed to be supplied by the Scarborough Gas Field.

Currently, BHP and ExxonMobil are looking at a number of options for the development of the field. Reports have suggested that the joint venture partners are considering either piping Scarborough gas southeast to Onslow to supply an onshore LNG plant, or plans to develop the field via a floating LNG development. Secondary options being assessed included the delivery of Scarborough gas into the existing North West Shelf Venture operation or to Chevron’s Gorgon LNG Project.

NT gas projects achieve major milestones

Environmental approvals are the chief concern of the $11.7 billion Ichthys LNG development, located in the Browse Basin, approximately 440 km offshore northwest Australia.

Project proponent Inpex has lodged a notice of intent with the Northern Territory Government and environmental referrals with the Australian Government regarding the development.

Darwin and Western Australia’s Maret Islands have been considered as locations for the LNG facility. The company has completed its study on the option to develop the plant on the Maret Islands.

The two sites would both require long pipelines from the field however Darwin is located 850 km from Ichthys, whereas the Maret Islands are located 190 km from the field. In spite of the proximity of the Maret Islands, analysts consider the Darwin option more likely, with a project facilitation agreement recently being signed with the NT Government.

In the Northern Territory, work has progressed on the pipeline installation work for Eni’s Blacktip Gas Field. Van Oord has been subcontracted by offshore fabrication and installation contractor Saipem to install the offshore pipeline.

The company is responsible for trench and backfill works as well as the pipepull of 2 x 2 km for 12 in. and 18 in. pipelines. Hippopotes will be used to execute this project later this year.

Meanwhile, construction has started on the 280 km pipeline that will transfer gas from the field to Darwin.

The pipeline will transport gas from Eni’s onshore gas processing facility near Wadeye to a connection on the existing Amadeus Basin to Darwin pipeline near Ban Ban Springs. The pipeline is scheduled to deliver first gas by the start of 2009.

Otway and Bass Basins add to offshore momentum

Rivalling the major progress made on developments in the Northern Territory, projects on the other side of the continent in Victoria have also received formal sanction and key milestones.

In November, the $275 million Henry Gas Field development project received formal sanction. With proven and probable reserves estimated at around 150 PJ of dry gas, first gas from the field, which is located offshore Port Campbell in Victoria, is expected in the first half of 2009.

The Henry Gas Field will be developed by using existing infrastructure associated with the Casino Gas Field and will primarily involve the installation of 17 km of 12 in. subsea pipeline and control umbilical from the existing Casino facilities to the Henry and Netherby development wells, and the installation of a further 5 km subsea pipeline and control umbilical to the Pecten East location.

Helix Energy Solutions will install the 17 km subsea pipeline and control umbilical while Cameron will supply subsea trees and Dyco has won a contract to provide the umbilicals and umbilical termination assemblies.

In April, Santos revealed that uncoated linepipe for the Henry field had been produced in Japan by Marubeni-Itochu Tubulars Oceania was en-route to Australia for coating.

The company also said that the umbilical and termination assemblies for the gas field are being fabricated in the UK for delivery in the third quarter of this year, with installation engineering and procurement in progress for mobilisation in the fourth quarter. Subsea trees are undergoing pre-delivery testing and the Ocean Patriot is expected to commence in the field in the second quarter of 2008.

The Gippsland Basin will also soon see offshore pipeline activity with Nexus having been granted a pipeline licence for the Longtom Gas Field Development from the Victorian Department of Primary Industries.

The project involves construction of a 15 km pipeline that will tie in to the Patricia-Baleen Pipeline that will enable gas processing to occur at the Patricia-Baleen gas plant. Procurement of all the required materials – including the pipeline, control umbilicals, wellheads and a high integrity pipeline protection system unit – has been completed.

Nexus has also said that the Aussie 1 pipe-lay barge, which has been contracted for the Longtom pipeline installation, is nearing completion with launch of the barge scheduled soon prior to sea trials. The barge is scheduled for mobilisation to the Longtom field in November 2008 with gas production scheduled to begin by the start of 2009.

Beach has made progress on plans to develop the $500 million Basker Manta Gummy Gas Project, which will be located in the Gippsland Basin.

The gas development involves drilling of gas wells into the Manta and Gummy fields, the installation of a 8 in. diameter 66 km gas pipeline that will connect the fields to an onshore gas processing facility and a new FPSO. The development will also involve construction of a 10 in. diameter pipeline which spans 12 km, and connects with the Eastern Gas Pipeline near Orbost in East Gippsland.

Drilling in the Basker field is continuing while contracts have been awarded for the subsea facilities, including trees and manifolds. The development is estimated to produce a minimum of 50 to 60 TJ each day when production starts in the first half of 2009.

Meanwhile, progress on the neighbouring Kipper Gas Project remains on schedule, with contracts for subsea equipment and umbilicals having been signed. In May, J. Ray McDermott won an engineering, procurement, construction and installation contract for offshore works.

The Kipper field will be developed by the installation of a number of subsea wells, piped back to existing infrastructure at Longford. It is expected that construction for the project will begin in the second half of 2008 with first gas on schedule to be delivered in 2011.

Continuing the momentum

While these last few quarters have been witness to a flurry of offshore activity, with major pipeline work being completed or expected shortly on the Perseus-over-Goodwyn, Blacktip and Longtom gas projects, such momentum is likely to continue, in the short term with the Angel, Gorgon and the Basker Manta Gummy gas projects achieving major project milestones and in the longer term with the go-aheads secured on the Henry, Reindeer, Julimar and Ithchys projects. Australia’s offshore gas boom is showing no sign of slowing down, and is sure to provide a plethora of opportunities for the industry.