Australian natural gas: part four

Read part three of this article here.

LNG projects under construction

Australia enjoys several advantages that engender new LNG development projects:

• First, the extent of the natural gas resources in relation to the size of the population and the energy intensiveness of the economy.
• Second, the location of the resources, with massive deposits near Asian markets.
• Third, the level of national oil and gas industry expertise, and the openness to foreign investment and participation by international energy companies.
• Fourth, the government and regulatory structure.

These advantages have contributed to the buildup of Australia's LNG industry and the successful launch of its four LNG complexes. Six major projects are underway, and others are possible in the longer term.

The Gorgon Project

Chevron's Gorgon Project is one of the largest natural gas projects in the world, located off the Northwest coast of Australia. Chevron reports that it is now more than 90% complete. The Greater Gorgon area includes the gas fields Gorgon and Jansz-Io, which are located between 130 km and 220 km offshore, respectively. All of the subsea pipelines, wellheads and associated facilities have been completed, as well as all 18 subsea wells. The first LNG train has been installed, and Train 2 modules are being delivered. When complete, the LNG plant will have a capacity of 15.6 million tpy. A fourth train of 5.2 million tpy also is possible, since Chevron has identified sufficient gas reserves to support it, so Gorgon's ultimate capacity could be as high as 20.8 million tpy. The first LNG was originally planned to be shipped in 2014, but it has been delayed slightly.

The Gorgon Project partners are Chevron Australia (47.3% shareholder and project operator), ExxonMobil (25%), Royal Dutch Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1.0%) and Chubu Electric Power (0.417%).

The Wheatstone Project

Chevron Australia and partners are also building the Wheatstone LNG project, which will develop the Wheatstone and Iago fields approximately 200 km (124 miles) north of Onslow. The Julimar and Brunello fields will also tie back to the central processing platform. Construction started in December 2011. Chevron reported that the Wheatstone Project is 57% complete. All nine production wells have been drilled, and the roofs on both LNG tanks have been raised at the LNG plant site. The gas will be delivered by pipeline to a processing plant at Ashburton North, which is 12 km west of Onslow on the Pilbara coast. The two LNG trains will have a combined capacity of 8.9 million tpy, and the project will also include a domestic natural gas plant. Chevron Australia owns a 64.14% stake and will be the project operator. Other participants include the Apache Corporation (13%), the Kuwait Foreign Petroleum Exploration Company (KUFPEC) (13.4%), Kyushu Electric Power Company (1.46%) and PE Wheatstone Pty Ltd, which in turn is partly owned by TEPCO (8%).

Australia Pacific LNG

Australia’s current CBM industry is centred in Queensland State. A well known CBM LNG project under construction is the Australia Pacific LNG Project (APLNG.) APLNG was sanctioned for construction in July 2011 with an initial size of 4.5 million tpy, with infrastructure included to support a second train of equal size. APLNG is a joint venture between Origin (37.5%), ConocoPhillips (37.5%) and China's Sinopec (25%). Origin is Australia's largest integrated energy company, and it is the largest CBM producer in Australia. Origin will manage the upstream gas development and pipeline delivery system. ConocoPhillips will operate the LNG plant, to be located on Curtis Island in the Port of Gladstone. Sinopec joined the project in April 2011 and will serve as the ‘foundation customer’, committing to a 7.6 million tpy LNG offtake agreement for 20 years. Japan's Kansai Electric Power Company also signed an LNG supply contract, agreeing to purchase 1 million tpy for 20 years.

Gladstone CSG LNG Project

The Gladstone LNG Project is led by Australian company Santos (30%), with partners PETRONAS (27.5%), Total (27.5%) and Korea Gas Corporation (KOGAS) (15%). Like the Queensland Curtis LNG project, this project will use coal seam gas from the Surat and Bowen Basin gas fields. A 420 km pipeline delivers the gas to the liquefaction plant on Curtis Island, near Gladstone. The LNG plant will have a capacity of 7.8 million tpy. In March 2015, Santos reported that the project was 90% complete, the first gas had been delivered, and the project was on schedule to produce its first LNG in the second half of 2015.

Prelude Floating LNG

Shell is moving forward with the Prelude Floating LNG (FLNG) project in the Browse Basin, planned to be the first FLNG plant in the world. The drilling (seven Prelude development wells) will be supported out of Broome, Western Australia. The project will produce at least 3.6 million tpy of LNG, 1.3 million tpy of condensate, and 0.4 million tpy of LPG. Shell started the project as sole owner, but in 2012 the Australian subsidiaries of Japan's INPEX Corporation (17.5%) and Korea Gas Corporation (KOGAS, 10%) joined. Taiwan's CPC also agreed to purchase 5%. KOGAS agreed to purchase 3.64 million tpy of LNG from Shell's global LNG supply, and CPC agreed to purchase 2 million tpy beginning in 2016. Shell's FLNG facility will be 488 m long, and it will be the largest floating offshore facility in the world.

Icthys LNG

Early 2015 brought a milestone for the planned Icthys LNG Project, the first drilling in the Icthys gas and condensate field, which is located approximately 220 km off the coast of Western Australia in the Browse Basin, and 820 km southwest of Darwin, where the LNG facility is planned. Tokyo based INPEX is the lead in developing the Icthys project (66%), with major joint venture partner Total (30%), Taiwan's CPC, and other partners being the Australian subsidiaries of Tokyo Gas, Osaka Gas, Chubu Electric Power, Kansai Electric Power and Toho Gas. The Icthys field is in the Browse Basin offshore Western Australia, which contains major reserves of natural gas and condensate, an estimated 40 years of supply. INPEX announced in 2008 that the LNG plant would be located at Darwin. This necessitated a massive gas export pipeline project. At 889 km long, it will be one of the longest subsea pipelines ever built. The Icthys project is planned to produce as much as 8.4 million tpy of LNG, 1.6 million tpy of LPG, and over 100 000 bpd of condensate. The condensate will be sold from a floating production and storage vessel at the field. The first LNG shipments are scheduled to commence at the end of 2016. INPEX reports that the project is 50% complete.

Read part five of this article here.

Written by Nancy Yamaguchi. This is an abridged article taken from the May 2015 issue of Hydrocarbon Engineering.

Read the article online at: https://www.hydrocarbonengineering.com/special-reports/30042015/australian-natural-gas-part-four-671/