Santos Ltd., Adelaide, has commissioned and brought on stream its Scotia CF1 project in eastern Queensland. The project came in ahead of schedule and below budget with initial full field production exceeding 40 terajoules/day of natural gas.
The project is in the Bowen basin about 340 km northwest of Brisbane. Plans are to supply 70 terajoules/day when peak production is reached late next year. This will boost the Santos-led Gladstone LNG project (GLNG) to the benefit of both the Australian gas market and LNG exports.
The Scotia project involved an expansion of the Scotia compression plant along with an increase in field wells to more than 100 from just 23. There also was the construction of 85 km of pipelines, two 4G communication towers, and an irrigation system for water treatment.
Santos said the initial cost estimate was $493 million (Aus.), but it was delivered for $416 million, 16% below budget.
Santos also noted the sale of its noncore Denison Trough assets in the same part of Queensland to Orient (Denison Trough) Pty. Ltd., which in turn is owned by a consortium of Shandong Order Gas Co. and Orient Energy, for as much as $43 million (Aus.).
The assets sold include Santos’ 50% non-operated interests in 12 permits holding Denison conventional assets as well as permit ATP 1177.
Santos received $22 million (Aus.) at completion of the deal and will gain further contingent payments of as much as $21 million is certain milestones are achieved.
Shandong is a Chinese gas distributor and Orient is an Australian private investment company.
The Denison Trough buy is the consortium’s second in Queensland in recent times. The same group bought AGL Energy’s Moranbah gas assets in Queensland’s Bowen basin last August.