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10 Oil & Gas developments to watch in Australia

18/11/2020
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No region has escaped impact from the Covid-19 pandemic this year, and for Australia this has hit just as the country was entering a new period of growth led by its development and export of liquefied natural gas (LNG). 

Employing over 17 thousand people, Australia’s oil and gas industry makes a significant impact on both the local and global economy. Last year we looked at some of the biggest projects that we’d be watching in the region, and this year we wanted to follow up on that. 

What we’ve seen is that many of the major projects that have been proposed or even where work has already begun have been hit by delays and uncertainty. But we are also seeing recovery, with many of the firms leading these projects picking them back up again and setting new targets for the coming year. In many cases investment in these has grown as global dependence on traditional oil and gas sources falls while LNG remains preferable as a relatively clean fuel. 

So, ordered primarily by capex investment, here are 10 of the biggest projects that we’ll be watching in Australia through 2021.

Browse Upstream Development (Torosa, Brecknock & Calliance Fields)

Value: $15 billion
Startup Year: 2024


The ongoing plans for the offshore Browse gas project has hit another delay thanks to the Covid 19 pandemic, but operators Woodside Petroleum remain hopeful that they can secure a final investment decision (FID) by 2023. 

The Browse area consists of three gas fields located 425km northwest of Broome, Western Australia - called Torosa, Brecknock and Calliance. Together they’re estimated to contain 15.4 trillion cubic feet (Tcf) of dry gas and 453MMbbls of condensate.

Woodside are currently planning to develop two 360 metre-long, 90,000 tonne gas floating production storage and offloading (gFPSO) facilities. These will aim to deliver around 10 mtpa of gas to NWS existing infrastructure through a 900km pipeline, from where it will be piped back to the Karratha Gas Plant.

Woodside is currently seeking Eols from subsea engineering houses to participate in the design of the 42” diameter pipeline. They are also bidding for an EPC contract covering a pair of FPSOs for the project, and are likely to soon be putting to tender a contract for project management services, which industry sources expect will go to KBR. 

Greater Gorgon Gas Project Expansion (Chandon, Geryon)

Value: $10.5 billion
Startup year: 2025


Originally planned back in December 2012, an expansion of the Gorgon LNG train 4 will involve development of the Chandon and Geryon fields.

Chandon field lies in water depths of 1,200 metres in Block WA-268-P, while Geryon is in ­modest water depths in Block WA-22-R. Both fields have a combined resource of 11 trillion cubic feet of gas.

Subsea development is planned which include new subsea export pipelines to Barrow Island, 12 subsea production systems and associated subsea hardware. Between 38 and 63 subsea wells will be required to supply to train 4.

The project was stalled for many years, but in March 2019 Chevron listed it as a future development, with a number of future tie-backs and projects to follow from other fields. An expansion and development of these fields along with West Tryal Rocks, Satyr, Achilles, Dino and Isoceles, Semele, Orthrus, Maenad, Orthrus Deep and Yellowglen; staged 4-8 years apart will keep the Gorgon and Jansz trunklines full until 2048.

Browse Basin Satellite Fields

Value: $10.4 billion
Startup year: 2025

Adjacent to the Woodside’s Browse fields are three Browse Basin Satellite discoveries - Poseidon, Kronos and Boreas.

These permits are being operated by ConocoPhillips, who are developing designs for operating in the fields.

One consideration is a standalone development of the Poseidon field, which has contingent resources of between 3 trillion and 15 Tcf of gas. Leading concepts for this are FLNG or a tie-in to the Darwin LNG plant.

Another development option being considered is a semi-sub production platform, a riser platform in shallower water, a 30” 230km pipeline to the riser platform and a 40” 770km pipeline to Darwin. Condensate and LPG would be produced to a FPSO vessel.

Startup of the development has been delayed several times, and the impact of the Covid-19 pandemic has done little to help that, but ConocoPhillips are still working with a project concept and a final investment decision is expected in 2021. 

Surat Gas Project

Cost: $7.15 billion
Startup date: 2021

The onshore Surat Gas Basin is located in Queensland, between Dalby and Wandoan. The project is expected to stretch across an area of 2,500km² where a CSG production well and associated facilities will operate on 14 petroleum leases.

Approximately 18 production facilities are likely to be required within the project area including gas compressors, water storage and treatment plants and power generation plants. Buried high-pressure gas pipelines will link the facilities and connect them to the gas transmission network. Buried water pipelines will connect the production facilities with sites of beneficial use.

The Surat Gas project is expected to yield 4 Tcf of gas over the next 27 years, with 4mtpa during peak production from 2026.

The project is being led by Arrow Energy, whose proposal was approved by the Queensland government in February. It will use existing infrastructure owned by QGC - a subsidiary of Shell - to transport gas to the domestic and export markets. Despite pandemic-related difficulties, construction on the initial phase began on schedule in September, with drilling expected to start before the end of the year. 

Rig contracts have been awarded to Savanna and Schlumberger. There are supporting works, related to well pads, gates and access, that are being done prior to drilling which will include more than 600 phase one wells targeted with associated gathering facilities. First gas sales from phase one are expected in 2021. Contractors carrying out construction will be selected for certain facilities which includes new inlet processing facilities to be built in 2020 and 2021 at the David and Harry compression stations. On top of that, new on and off-tenure gas and water pipelines are also required at Shell’s facilities, whereas Arrow’s own water treatment facilities requires some upgrades. Subsequent phases will include two new field compression stations, two extra inlet processing facilities, about 1,900 additional wells and gathering facilities.

Scarborough Gas Field

Value: $5.3 billion
Startup year: 2023


One of our major oil and gas projects to watch in 2020, the Scarborough gas reservoir development has certainly been an interesting one to keep your eye on over the last few months. With green lights in the early months it seemed like things would be going smoothly for this relatively shallow reservoir, but of course nothing is guaranteed this year and the pandemic hit the Scarborough plans hard. 

Fortunately, following several delays and much uncertainty throughout the year, in recent weeks Woodside Petroleum has signalled its intention to proceed with the project, with plans to sanction in 2021. The company has received offers for the grant of petroleum production licences in respect of the WA-1-R (Scarborough) and WA-62-R (North Scarborough) titles from the Commonwealth and Western Australian Joint Authority.

Woodside are planning to expand the Pluto LNG facility through the addition of a second LNG liquefaction train with a targeted capacity of 4-5 mtpa, that will allow them to develop the gas from the Scarborough field, located 270km off the coast of Western Australia.

Currently the facility has a single-train capacity of 4.9mtpa which uses feedstock from the Pluto and Xena fields. 

Gorgon LNG Train 4

Value: $5.1 billion
Startup year: 2023


Gorgon is one of the world’s largest natural gas projects, with the $36 billion LNG plant producing an average of 2.6 billion cubic feet of natural gas and 18,000 barrels of condensate per day.

From the initial FID in 2010, Chevron has developed 3 LNG trains at the plant. A planned expansion will add a fourth 5.2 million tonne/year capacity LNG train, plus a storage tank and third pipeline to feed the project.

Gas will be supplied to the fourth train from the Geryon field and Chandon field. Chevron received a go-ahead for the expansion in May last year, using an estimated capital investment of $5.1 billion.

It’s thought that after the expansion there may still be further room for a fifth train.However the project is currently stalled while Chevron await more favourable market conditions.

Greater Sunrise Gas and Condensate Fields

Value: $5 billion
Startup year: 2026


Greater Sunrise lies 150 km south-east of Timor-Leste and 450 km north-west of Darwin in Australia’s Northern Territory. Greater Sunrise is estimated to hold 5.13 Tcf of gas and up to 300 MMbbl of condensate.

The original development plan for the fields included a large barge-shaped floating single train, 4 mtpa LNG unit with associated LNG and condensate tankers, a wellhead platform of 170 metres with nine dry tree wells, five subsea manifolds on the Sunrise field with 14 more wells, another subsea manifold, two wells on nearby Troubadour field and a 150 km gas pipeline from the field to a proposed LNG facility at Beaço, East Timor.
The concept for the field development will be an FPSO vessel with a 150 km gas export pipeline to a proposed onshore LNG facility at Beaço, East Timor.

Timor Gap aims to reach a final investment decision by 2022 and start producing by 2026. An “economic feasibility analysis of the entire project” was announced in September.

Wickham Point LNG Train (Darwin LNG) - Second Train

Value: $5 billion
Startup year: 2023


Proposed expansion of the current Wickham Point LNG project by adding a second LNG liquefaction train, to expand the facility's capacity from 3.5 mpta to 10 mpta.

The train will likely be supplied with gas from additional stranded reserves.

It was reported in recent weeks that Santos has executed documentation to enter into a new $750 million syndicated bank loan, to refinance existing debt facility established for the acquisition of ConocoPhillips’ northern Australian and Timor-Leste assets. Santos stated that the new facility was around three times oversubscribed. The proceeds from the new facility will be used to refinance the existing $750 million debt facility established for the acquisition of ConocoPhillips's assets.

Pluto LNG Train 2

Value: $5 billion
Startup year: 2024


Located in Burrup, Western Australia, the Pluto LNG facility is another major project seeking an expansion, correlating with the growth in the Australian natural gas market.

Currently the facility has a capacity of 4.9mtpa, processed from the offshore Pluto and Xena gas fields after being piped through a 180km trunkline to a single processing train.

The proposed expansion will add a second LNG liquefaction train that will have a targeted capacity of 4-5 mtpa, using gas feedstock from the Scarborough field.

Woodside, who operate the facility, were targeting a FID in 2020 on the expansion project, with an estimated capital budget of $11 billion, but this was delayed by the coronavirus pandemic. Woodside has signalled that they hope to have the sanctions in place by the second half of 2021. 

Burrup Peninsula Urea Project

Value: $2.9 billion
Startup year: 2024


Approximately 10km from Dampier and 20km north-west of Karratha on the northwest coastline of Western Australia is the Burrup Peninsula, where the development of a urea fertiliser manufacturing plant is due to be located.

The proposed plant will produce around 2 million tonnes per year of urea, using natural gas from the Scarborough field as a feedstock. The materials will then be exported to the Asia Pacific market.

The project currently has a Memorandum of Understanding (MoU) and has recently been granted major project status by the country’s department of industry, science and technology. This will assist the operator, Perdaman, with obtaining federal government assistance and approves through the Major Project Facilitation Agency.

Clough and Saipem, in a 50/50 joint venture (JV), were awarded an EPC contract for the development of the urea plant in July 2020. The work scope includes engineering, construction, pre-commissioning and commissioning of the ammonia and urea plant including EPC for all site civils, process plant, utilities, urea handling, storage and loadout, storage facilities and site buildings. The FID for the project is expected in 2021. 

It’s estimated that 2,000 direct jobs will be created through the three-year building phase, followed by 200 permanent jobs when complete.

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10 Oil & Gas developments to watch in Australia - Time to read 11 min
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