The Asian economic crisis has halted plans for a fast-track development of the proposed $8 billion (Australian) Gorgon liquefied natural gas export project on the North West Shelf off Western Australia.
The project participants-Royal Dutch/Shell, Chevron Corp., Mobil Corp., and Texaco Inc.-have admitted that they are unlikely to secure any sales agreements before yearend 1998.
In another major potential gas development off Australia, operators of Yolla gas field in the Bass basin off Tasmania have disclosed estimates of potential world-class reserves in the field.
Gorgon delay
The Gorgon participants had previously hoped to secure several 20-year contracts this year to supply about 8 million metric tons/year of LNG to Asian markets-particularly South Korea-and had sought to have first shipments ready in 2003.It now appears unlikely that the necessary contract-precursor letters of intent will be obtained soon enough. The companies say that some project engineering work will be slowed down in 1999.
However, project marketing and some appraisal drilling on the fields will continue.
Market, rival concerns
In South Korea, LNG imports in 1998 are expected to be about 18% lower than previously thought. State-owned Korea Gas Corp. has already canceled 15 LNG cargoes for the year.The rival $6 billion (Australian) North West Shelf expansion project targeting Japanese markets is in a stronger position, with infrastructure already in place. The North West Shelf partners-Woodside Petroleum Pty. Ltd., British Petroleum Co. plc, BHP Petroleum Pty. Ltd., Chevron, Shell, and a combine of Mitsui & Co. and Mitsubishi Corp.-still hope to win the crucial letter of intent by the end of this year.
If so, then the North West Shelf expansion project is likely to be brought on stream in stages. One LNG train could be operational by 2003, followed by the second in subsequent years.
Yolla gas confirmation
The Yolla gas field, in the Tasmanian sector of the Bass basin about 100 km off the northern Tasmanian coast, has significant reserves estimated at 450-600 bcf, according to field participant Boral Ltd., following the latest appraisal well.The field also contains up to 70 million bbl of oil in separate formations above the gas reservoir, and the gas itself is rich in condensate-although no figure for condensate reserves has been given.
By comparison, the Bayu-Undan field, in the Timor Gap Zone of Cooperation in the Timor Sea between Australia and Indonesia, has reserves of 1 tcf, and the biggest field in Queensland's Cooper basin, Barrolka, has 750 bcf.
Development options
Work is now proceeding towards development options at Yolla, and talks are being held with potential customers in Tasmania and Victoria. Development of an offshore platform and pipeline to either state will cost about $300 million.Such a development would be contingent on contracts for a baseload of 14.25-19 bcf/year.
In Tasmania, discussions over gas supply customers include Duke Energy Co.-the company that has "preferred developer" status for gas projects in the state-as well as various mine owners and processing plant operators. In Victoria, the talks will include that state's gas utilities, which recently tendered for gas supplies of up to 28.5 bcf/year beginning in 2001. Plans call for further drilling at Yolla next year.
Participants are Boral 30.5%, Premier Oil plc 30.5%, CalEnergy Gas 20%, Cue Energy Ltd. 14%, and Santos Ltd. 5%.
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