Western Gas looking for Equus development partner

May 21, 2018
Privately held Western Gas Corp. Pty. Ltd., Perth, has completed a basis of design for development of its wholly owned Equus gas-condensate fields offshore Western Australia and is now looking for a project development partner.

Rick Wilkinson

OGJ Correspondent

Privately held Western Gas Corp. Pty. Ltd., Perth, has completed a basis of design for development of its wholly owned Equus gas-condensate fields offshore Western Australia and is now looking for a project development partner.

Western Gas acquired the fields from Hess Corp. in November 2017 and vowed to develop the fields as a new domestic gas supply for Western Australian industry, along with business and household customers in the state.

The project comprises gas-condensate fields within four permits and one retention lease, namely WA-390-P, WA-474-P, WA-518-P, WA-519-P, and WA-70-R, which have an independently certified resource in excess of 2 tcf of gas and 42 million bbl of condensate.

The fields are in the Carnarvon basin about 200 km northwest of Onslow and were discovered by Hess during 2008-12. The company drilled 16 wells that resulted in 14 successes in eight main fields. An estimated $6-billion (Aus.) investment was envisaged to bring the project to fruition with a plan to feed the gas into the Woodside Petroleum Ltd.-led North West Shelf gas facilities on the Burrup Peninsula.

However, the project came off the boil in 2016 because of the downturn in global oil prices and the high capital costs of development in Australia.

In early 2017, Hess decided to write down the full value of the proposed project by $933 million (Aus.) and focus its attention on the Bakken shale in the US, Valhall field offshore Norway, and Liza field offshore Guyana.

Western Gas bought the Equus package later that year on undisclosed terms with executive director Andrew Leibovitch saying the project was development-ready and engineering activities were at an advanced stage. He added that since 2007, more than $1.5 billion had been spent on exploration, appraisal, engineering, and development planning for the project.

Hess’s broad plan sought development of the eight fields via a central semisubmersible gas processing facility at the hub of a subsea gathering system. The gas would then be piped to the NWS offshore facilities for transmission to the shore plant at Karratha on the Burrup Peninsula to supply the five North West Shelf gas trains.

Leibovitch, who is a former Woodside executive, said that since acquiring the Equus fields, Western Gas has resized the project to match the discovered gas resource and to meet gas customers’ needs for long-term secure contracts and innovative pricing.

The new approach comprises an offshore processing facility and a pipeline to shore, with landfall near Onslow on the Western Australian coast.

The development will be phased, with the initial stage comprising three production wells linked by subsea infrastructure to a floating production, storage, and offloading vessel. Onboard facilities will include gas dehydration, condensate stripping, and gas compression.

Dry gas will be piped through a 220-km subsea pipeline, with onshore facilities dependent on the outcome of ongoing gas marketing arrangements. Gas supply in the initial stage is expected to be up to 250 terajoules/day of gas with first gas planned to come on stream from 2023.

Western Gas is now looking to secure a project partner to bring the gas to market. Project services being sought embrace full field development, including drilling, subsea, offshore processing, and the gas pipeline to shore.

Meantime it is focussing on finding foundation customers for the gas as well as undertaking project financing activities.

Leibovitch said front-end engineering and design will begin once customer arrangements are secured. He added that a final investment decision for Equus Stage 1 is expected in late 2019.

He said initially the company is viewing the project as a stand-alone development but agreed that there are opportunities for Western Gas and other resource owners to access expected spare processing capacity in existing infrastructure and planned new developments from the early 2020s.

The eight Equus group fields are Mentorc, Bravo, and Nimblefoot with Cretaceous-age reservoirs; Chester and Rimfire with Cretaceous-Triassic reservoirs; Glenloth and Briseals in Triassic sands; and the Glencoe discovery in the Jurassic. The three Cretaceous fields have the highest condensate-gas ratio of 40 bbl/MMcf.

The fields lie in 1,000-1,200 m of water and have sufficient reserves to supply one quarter of Western Australia’s domestic gas demand or 2 million tonnes/year of LNG for 20 years.