Henry field off Victoria gets formal nod
The Santos-led JV in permit Vic/P44 in the Otway basin off western Victoria has agreed to spend $275 million (Aus.) to develop Henry gas field.
MELBOURNE, Dec. 3 -- The Santos-led joint venture in permit Vic/P44 in the Otway basin off western Victoria has agreed to spend $275 million (Aus.) to develop Henry gas field and tie it in to existing facilities in its nearby Casino field.
The price is nearly double the initial cost estimated when front-end engineering and design began 12 months ago and 40% more than the $200 million cost of Casino field development, 8½ km to the northwest. The increase has been attributed to higher labor and material costs and the huge increase in global prices for pipelaying vessels.
Henry, discovered in 2005, is about 18 km off Victoria in 65 m of water. Reserves are estimated to be 150 petajoules of dry gas.
Santos says the development program involves drilling the Henry-2 development well and installing 17 km of 30-cm subsea pipeline from Casino to Henry.
An extra component will involve drilling the Netherby-1 sidetrack as an exploration well on a separate prospect to be completed as a development well if successful. Both wells would be produced through the Casino system to the shore-based Iona gas plant.
Another nearby prospect, Pecten East, also will be drilled as an exploration well and tied in with another 5 km of pipeline and control umbilical if successful.
Santos says the final project scope is still subject to the exploration results of Netherby and Pecten East, both of which will be drilled in 2008. Nevertheless, first gas production is scheduled for first half 2009.
Operator Santos has a 50% interest, while Australian Worldwide Exploration Ltd. and Mitsui & Co. Ltd. each hold 25%.