The Joint Authority for the Timor Gap Zone of Cooperation has approved the development plan for Phillips Petroleum Co.'s Bayu-Undan gas recycle project. The six partners in the project can now begin engineering, procurement, and construction activities.
This $1.4 billion gas recycle project will involve gas and liquids production from Bayu-Undan offshore field, plus processing and storage of condensate, propane, and butane, as well as reinjection of dry gas into the reservoir. First liquids production from the project is expected in late 2003, and full commercial production in early 2004.
Bayu-Undan is a gas-condensate field that straddles PSCS 91-12 and PSC 91-13 in Area A of the Timor Gap Zone of Cooperation between East Timor and Australia. The field, located in 80 m of water 500 km northwest of Darwin, Australia, contains estimated reserves of 400 million bbl of liquids and 3.4 tcf of gas.
Marketing efforts for Bayu-Undan production are under way, though a gas utilization project will be subject to review by coventurers and the Timor Gap Joint Authority.
The approval was made possible by an agreement between the United Nations Transitional Administration in East Timor and Australia, providing for continuation of the legal, fiscal, and administrative regime of the Timor Gap Treaty (OGJ, Feb. 28, 2000, Newsletter). That treaty was originally signed by Australia and Indonesia, which held East Timor as its property until last year.
Project operator Phillips says Bayu-Undan development should contribute to economic stability and development in East Timor and the surrounding region. Phillips holds 50.3% of the Bayu-Undan project; Santos Pty. Ltd., 11.8%; Japanese company Inpex Ltd., 11.7%; Kerr-McGee Corp., 11.2%; Australian company Petroz NL, 8.3%; and British-Borneo Oil & Gas PLC, 6.7%.
