GENERAL INTEREST Quick Takes
Australia becomes world’s largest LNG exporter
Australia has become the largest exporter of LNG on an annualized basis with an estimated 77.514 million tonnes shipped from the country’s 10 LNG projects during 2019.
Qatar is second with an expected 75 million tonnes of LNG exports in the period. The US exported 34.3 million tonnes.
Total Australian LNG shipments for 2019 were up by 11.4% on the 2018 figure, primarily due to growth in production from the Ichthys project in Darwin.
Western Australian production in 2019 was similar to 2018, but Queensland production was up by 8.2% to 22 million tonnes for 2019 with the Curtis Island CSG-LNG plants run by Australia Pacific LNG and Queensland Curtis LNG operating at close to full capacity. The Northern Territory increased its sold output by 153% from 4.15 million tonnes in 2018 to 10.5 million tonnes in 2019.
Australia’s 10 LNG projects have a combined capacity of 87.8 million tonnes/year but, with only 88% of total nameplate capacity used in 2019, there is an opportunity to lift the current production milestone higher.
Equinor lets contract for Troll B, C electrification
Equinor and partners have let a front-end engineering and design contract (FEED) to Aker Solutions for topside modifications at Troll B and C platforms in the Norwegian North Sea to accommodate power from shore. Detailed plan work to ensure safe execution will occur this year.
The main driver in the electrification project “is to reduce CO2 and NOx emissions from the Troll B and Troll C platforms by using electrical power from Kollsnes and replacing the existing gas turbine driven electricity generators and gas compressors with electrical equipment,” said Geir Tungesvik, Equinor’s senior vice-president for project development.
The electrical system and power cable from shore will be designed to accommodate full electrification for Troll B and Troll C.
“The selected concept for the electrification is full electrification of Troll C and partial electrification of Troll B with a possibility to fully electrify Troll B later,” said Tungesvik.
The CO2 reductions is expected to be 450,000 tonnes/year after the project is completed.
Upon final investment decision, expected by yearend, Equinor can exercise an engineering, procurement, construction and installation (EPCI) option that is included in the FEED contract. A separate FEED contract for the onshore civil was previously let to Multiconsult.
Troll A was the first platform on the Norwegian continental shelf to utilize power from shore.
Equinor is operator with 30.58% interest. Partners are Petoro 56%, Norske Shell 8.10%, Total E&P Norge 3.69%, and ConocoPhillips Skandinavia 1.62%.
ONGC awarded seven blocks onshore India
ONGC Ltd. was awarded contracts by India’s Ministry of Petroleum and Natural Gas for all seven oil and gas blocks offered in the fourth bid of the Open Acreage Licensing Program (OALP).
India’s Minister of Petroleum and Natural Gas & Steel, Shri Dharmendra Pradhan, said the total area awarded in the blocks is 18,510 sq km spread across the Rajasthan, Vindhyan, and Bengal Purnea sedimentary basins onshore India with resource potential of 33 billion bbl of oil and oil equivalent gas.
At a signing event Jan. 2, Shri Pradhan spoke about reforms in the hydrocarbon sector. “We have shifted our focus from revenue to production maximization and have adopted the path of continuous reform.”
The four OALP bid rounds have awarded 94 blocks covering 136,790 sq km. Operators of the blocks have initiated petroleum exploration activities or are in final stages of obtaining exploration licenses, the agency said in a press statement Jan. 2. The cumulative exploratory work commitment after four rounds of OALP comprise 29,270 line-km of 2D seismic survey; 43,272 sq km of 3D seismic survey; 369 exploratory wells and 290 core analysis to establish shale resources. The government expects activity to generate an investment of $2.35 billion over next 3-4 years in exploratory work alone.
The 5th cycle of submitting expressions of interest closed Nov. 20, 2019. The 6th cycle is open until March 31.
Eni, Tap Oil relinquish Prometheus-Rubicon lease
The joint venture of Eni Australia and Tap Oil Ltd. has agreed to surrender retention lease WA-34-R in the Bonaparte basin of Western Australia that contains the Prometheus and Rubicon gas discoveries.
Tap, the junior partner in the venture, said that the retention lease had been extended for a second 5-year term in 2015 and the JV had used this time to evaluate a range of commercialization opportunities under a variety of economic assumptions. They concluded that the returns on potential developments were not sufficiently attractive when put against the costs and risks.
The partners came to a mutual decision to surrender the lease, a move that was finalized on Dec. 24, 2019.
Prometheus and Rubicon, 3 km apart, were discovered in June and December 2000, respectively, by then-operator Kerr McGee. Both fields have gas columns in the Upper Permian-age Tern formation – Prometheus 72 m gross thickness and Rubicon 30 m gross thickness. The fields lie in moderate water depths some 400 km west of Darwin and are in close proximity to the existing Ichthys-Darwin gas trunkline.
Exploration & Development Quick Takes
Shell makes new gas discovery in Browse basin
Shell Australia reported a gas-condensate discovery from Bratwurst-1 wildcat in the Browse basin offshore Western Australia.
Bratwurst-1 is in Shell’s 100%-owned and operated Ashmore Cartier permit AC/P64, which lies 160 km northeast of the company’s Prelude floating LNG facility.
Shell called the find “significant,” but released no further details of the drilling results. However, its relatively close proximity to Prelude is likely to offer tie-in potential should appraisal drilling prove successful.
Shell has the nearby Crux field in AC/P23 (originally discovered by Nexus Energy in 2000) earmarked as backfill for Prelude.
Crux has an estimated resource of 2 tcf of gas and 66 million bbl of condensate. An investment decision is expected this year.
Shell holds 82% of Crux. Partners are Seven Group Holding’s subsidiary SGH Energy with 15% and Osaka Gas with 3%.
The new Bratwurst find adds to Shell’s growing list of gas interests off Western Australia, including Torosa, Calliance, Brecknock, Prelude, Crux, and the North West Shelf joint venture. Shell Australia executive vice-president Zoe Yujnovich says gas is a core component of the company’s strategy to provide more and cleaner energy solutions.
Shell invests in Malikai Phase 2 development
Sabah Shell Petroleum Co. Ltd., a subsidiary of Royal Dutch Shell PLC and operator of the Malikai tension-leg platform (TLP) 100 km offshore the Malaysian state of Sabah, is investing in a second phase of the Malikai deepwater development.
The project involves the drilling of two additional oil producing wells and four water injection wells to enhance Malikai’s expected recoverable oil volumes and is expected to contribute to Malikai’s production in second-quarter 2021. The development deploys the same single-combo riser technology that was used for the first time during Malikai Phase 1.
Malikai is Shell’s second deepwater project in Malaysia following startup of the Gumusut-Kakap platform in 2014 (OGJ Online, Oct. 8, 2014). It features the country’s first tension leg platform, a floating oil production facility moored to the seabed 500 m underwater with an average annual peak production of 60,000 b/d.
Joint venture partners are Shell (35%, operator), ConocoPhillips Sabah Ltd. (35%), and Petronas Carigali Sdn Bhd (30%).
Lukoil begins pilot production from Bolshekhetskaya depression
Lukoil started pilot production at Yuzhno-Messoyakhskoye gas condensate field in the Bolshekhetskaya depression, Yamal-Nenets Autonomous District, Russia. A final decision on further field development will be based upon results of the first wells, the company said Dec. 25.
As of Dec. 25, 2019, the company has drilled one multi-bore well with daily flowrate of 330,000 cu m of natural gas and 30 metric tons of condensate. Facilities have been constructed and commissioned to gather, process, and ship gas and condensate, including a unit for treatment of marketable gas with daily design capacity of 600,000 cu m of natural gas and 90,000 metric tons of condensate. Also included are a gas engine power plant, a 7-km gas pipeline connecting the field with a transportation system, gas gathering systems, a methanol pipeline, production infrastructure facilities, and an accommodation camp.
Discovered in 1987, initial recoverable reserves at Yuzhno-Messoyakhskoye are estimated at 112.5 billion cu m of gas and 10.3 million metric tons of condensate, according to Lukoil’s web site.
Drilling & Production Quick Takes
First Shafag-Asiman exploration well spudded
The first exploration well was spudded on the Shafag-Asiman offshore block in the Azerbaijan sector of the Caspian Sea on Jan. 13, BP said. BP is operator with 50% interest. SOCAR holds the other 50%.
SAX01 is the first well to be drilled in the contract area and is in accordance with BP’s obligations under the PSA that was ratified by the Azerbaijani parliament in 2011 (OGJ Online, May 10, 2011).
Drilled from Caspian Drilling Co.’s Heydar Aliyev semisubmersible drilling, the well is expected to reach total depth of up to 7,000 m. Drilling is expected to take 9 months. Well data will be analyzed and, if successful, an evaluation program may be conducted to confirm the results.
The structure has significant potential for a large-scale gas discovery, said Gary Jones, BP’s regional president for Azerbaijan, Georgia, and Turkey.
The Shafag-Asiman offshore block lies some 125 km to the southeast of Baku in water depths of 650-800 m. It covers an area of some 1,100 sq km. The block is 60 km from Shah Deniz and 145 km from the Sangachal terminal.
A 3D seismic acquisition program was conducted on the contract area in 2012.
Interpretation of the seismic dataset was completed in 2015 followed by the selection of the first well location and planning for drilling activities.
Well on Taq Taq northern flank flows oil
A well drilled to assess potential of the northern flank of Taq Taq oil field in the Kurdish region of Iraq is nearing completion, reports Genel Energy PLC, London. Individual zone testing to determine the long-term production strategy is now underway. Genel expects the well to be placed on production around the middle of January with an initial flow rate of 1,500-2,000 b/d of oil.
The TT-34 well has produced from all zones tested at a maximum combined flow rate of over 3,900 b/d of oil through a 28/64-in. choke. With the inclusion of test production, gross production from Taq Taq field is currently 13,650 b/d of oil (OGJ Online, Apr. 11, 2019).
The rig has moved to drill the TT-35 well, also on the northern flank of the field, which is now preparing to spud.
Genel jointly operates the Taq Taq production sharing contract with a 44% working interest with Addax Petroleum, a Sinopec Group company.
Equinor to extend life of Statfjord field
Statfjord field operator Equinor and its partners, Var Energi, Spirit Energy Norway, Petoro, Idemitsu Petroleum Norway, and Wintershall Dea Norge, have identified and approved plans to extend production from the North Sea field based on extensive subsurface mapping. A new business plan will defer decommissioning of Statfjord A, originally set for 2022, to 2027 (OGJ Online, May 2, 2019). The lives of Statfjord B and C will be extended beyond 2035.
About 100 new wells will be drilled towards 2030, requiring upgrades to the three platforms to maintain current production levels beyond 2025.
Operations will be reorganized with the establishment of a new late life unit. The new unit will be responsible for the decommissioning projects for the Veslefrikk and Heimdal installations.
Butlers appraisal concluded, Rincon appraisal begins
The 4-well appraisal program to test limits of Butlers oil field in South Australia’s Cooper basin has concluded and the Rincon appraisal has begun, Cooper Energy reported Jan. 6. The company holds a 25% interest in the Beach Energy-operated PEL 92 joint venture.
Butlers-10 and -11 identified a potential additional target in the McKinlay Member with moveable oil demonstrated by MDT (Modular formation Dynamic Tester) at Butlers-10. The well, some 540 m southeast of Butlers-6, was plugged after drilling to a total depth of 1,697 m MDRT (measured depth below rotary table).
Butlers-11, 460 m southeast of Butlers-4, had oil shows and was cased and suspended in preparation for a cased hole test of the McKinlay Member reservoir after drilling to a total depth of 1,681 m MDRT.
Butlers-12, 350 m southwest of Butlers-1, was dry and plugged after drilling to a total depth of 1,695 m MDRT.
Butlers-13, 500 m northwest of Butlers-2, completed the program and was dry and plugged after drilling to a total depth of 1,694 m MDRT.
The Namur Sandstone—the primary producing reservoir in the field—was shown to be either water-wet or swept in all wells. Subject to the results of the Butlers-11 test and a full field review, future development drilling may result.
A 2-well appraisal of Rincon oil field in PEL 92 to better understand limits in the under-appraisal field has begun, Cooper said.
The first well in the program, Rincon-2, spudded Jan. 4. Rincon-2 lies 770 m southeast of Rincon-1 and will test the southern extent of the field. Total depth of 1,706 m MDRT is expected.
Rincon-3 lies 820 m northwest of Rincon-1 and will test the central part of the field between Rincon-1 and Rincon North-1. Total depth is expected to be 1,749 m MDRT.
PROCESSING Quick Takes
Satorp’s Jubail refinery enters planned maintenance
Saudi Aramco Total Refinery & Petrochemicals Co. (Satorp) was scheduled to begin maintenance activities Jan. 13 at Train 2 of its 440,000 b/d full-conversion refinery complex at Jubail on Saudi Arabia’s eastern coast.
During the turnaround, all processing units of the refinery’s Train 1 will continue to operate normally, Satorp subsidiary Arabian Aramco Total Services Co. (AATSC) said in a filing to the Saudi Stock Exchange (Tadawul).
Without disclosing specific details regarding the scope of work to be carried out during the maintenance period, AATSC said the majority of units at Train 2 will be back in operation by Feb. 29.
In early 2019, Satorp let a contract to KBR Inc. and subcontractor Wison Engineering Services Co. Ltd. to deliver debottlenecking services at the Jubail refinery’s Train 2 in a project that, once completed, is slated to increase the refinery’s original throughput capacity by 15% (OGJ Online, Feb. 4, 2019).
The debottlenecking project was scheduled to be executed during a major refinery turnaround in 2020, with completion targeted for August 2020, KBR said at the time of the contract award.
Sonatrach secures financing to support Italian refining business
The Arab Petroleum Investments Corp. has extended two loan facilities worth a combined $250 million to Algerian state-owned Sonatrach subsidiary Sonatrach Petroleum Investment Corp. (SPIC) to support Sonatrach Raffinera Italiana SRL’s (SRI) 198,000-b/d Augusta refinery in the province of Siracusa, Sicily.
The first loan, a $100-million bilateral prefinancing facility, will be used to fund maintenance of the Augusta refining complex, while a second $150-million unfunded and syndicated letter of credit is for SRI to use for purchasing crude oil feedstock for the refinery from Saudi Aramco, APICORP said.
The loans are intended to support SRI’s efforts to diversify energy assets, ensure steady crude supplies, and increase its geographic footprint, APICORP said.
“Our strategic investment in international refining through [SRI] will contribute to meeting local energy demand and address imbalances in petroleum supplies. This is of key importance to our efforts to diversify our energy assets and secure reliable supplies of crude oil, as part of our drive to meet local energy demand and address imbalances in petroleum supplies to the domestic market,” said Nordine Bouteldja, managing director of SPIC.
In its first overseas acquisition, Sonatrach purchased the Augusta refinery—which produces gasoline, distillates, fuel oils, lubricants, asphalts, and chemicals—from ExxonMobil Corp. subsidiary Esso Italiana SRL in a deal that closed in December 2018 (OGJ Online, May 16, 2018). As part of the purchase, Sonatrach also acquired three oil terminals in Augusta, Naples, and Palermo, as well as associated oil pipelines.
Following the close of the transaction, SRI has invested €200 million in extensive maintenance work at the refinery, much of which involved improving environmental sustainability and efficiency of the complex, according to SRI’s web site.
Alongside installing burners in the refinery’s low-NOx ovens, SRI also changed out all the burners in three large furnaces at three different plants within the complex. The operator also executed projects aimed at improving reliability of processing plants, including a major revamp of the refinery’s catalytic cracking unit that involved upgrading the plant’s equipment, instrumentation, and structure, SRI said.
Greek refinery lets contract for new naphtha complex
Motor Oil (Hellas) Corinth Refineries SA (MOH) has let a contract to TechnipFMC for services related to construction of a new naphtha treatment complex at MOH’s 185,000-b/d refinery in Agii Theodori, at Corinth, Greece, about 70 km outside Athens.
As part of the contract, TechnipFMC will deliver engineering, procurement, and construction management (EPCM) services for the proposed 22,000-b/d naphtha complex, which will include a naphtha hydrotreating unit, a platforming unit, and an isomerization unit, the service provider said.
The project also involves upgrading existing but unidentified utilities and offsite units to meet the requirements of the new complex, according to TechnipFMC.
Once completed, the complex will enable MOH to increase its production of Euro 5-quality gasoline as part of the operator’s strategy to expand production of clean fuels.
Valued at between $75-250 million, the EPCM contract follows MOH’s previous award to TechnipFMC for execution of front-end engineering design on the naphtha complex, which has been completed, the service provider said.
On May 29, privately held MOH’s board of directors approved construction of the naphtha treatment complex at total budgeted expenditure of €310 million.
The new complex, which will contribute to the refinery’s increased production of cleaner fuels as well as kerosine and hydrogen, is scheduled to be completed by yearend 2021, MOH said.
TRANSPORTATION Quick Takes
TC Energy plans February Keystone XL preconstruction
TC Energy Corp. plans to start preconstruction work in February on its 830,000-b/d Keystone XL crude oil pipeline. The company announced its plans in a filing with US District Court in Montana. It intends to mobilize heavy construction equipment in February to begin building the pipeline’s 1.2-mile US-Canada border crossing in April as well as work in Nebraska in June and South Dakota and Montana in August.
Work on the border-crossing segment is still pending federal approvals, including a final environmental impact statement from the US Department of State. Keystone XL was originally expected to be completed in 2012 but has been delayed by legal actions and protests.
US President Donald Trump last year issued an updated presidential permit for the pipeline (OGJ Online, Mar. 29, 2019).
Keystone XL will run 1,179 miles of 36-in. OD pipe to move crude from Hardisty, Alta., to an interconnection in Steele City, Neb., with the existing Keystone pipeline.
TurkStream begins operations
Gazprom’s TurkStream natural gas pipeline has started deliveries to Turkey. TurkStream runs across the Black Sea, supplying gas from Russia. Its two strings have a combined throughput of 31.5 billion cu m/year. The first string will deliver gas to Turkey, while the second string is intended for gas transit to Bulgaria, Serbia, and Hungary.
Pipelay of the 32-in. OD line at water depths as much as 2,200 m took 15 months and was completed ahead of schedule in November 2018. Construction of the receiving terminal near Kiyikoy, Turkey, was finished in 2019.
Gas enters TurkStream at the Russkaya compressor station, near Anapa, Russia. The 224 Mw station maintains the pressure required for the 930-km transit to Turkey.
Qatar Petroleum, Kuwait Petroleum sign LNG supply agreement
Qatar Petroleum and Kuwait Petroleum Corp. (KPC) signed an agreement for the supply of up to 3 million tons/year of liquefied natural gas (LNG) to the State of Kuwait.
Under the 15-year agreement, LNG deliveries to Kuwait’s new LNG receiving terminal at Al-Zour Port will begin in 2022 to support Kuwait’s growing energy needs and demand, particularly in the power generation sector (OGJ Online, Dec. 16, 2019).