Apache extends Devil Creek gas plant contract

Apache Energy has reengaged Clough Australia as the engineering, procurement, and module fabrication contractor for its Devil Creek onshore gas processing plant in Western Australia.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Mar. 6 -- Apache Energy has reengaged Perth-based engineering and construction company Clough Australia as the engineering, procurement, and module fabrication contractor for its Devil Creek onshore gas processing plant, which lies 45 km south of Dampier in Western Australia.

The $54 million (Aus.) contract is for engineering, design work, procurement of all permanent materials and equipment, plus fabrication and assembly of all modules for the facility, which will process gas piped in from Reindeer gas field offshore.

The new contract is a reimbursable style with options to increase the scope of work based on mutual agreement between Apache and Clough.

The original contract, along with the whole project, was deferred in December 2008 when Apache and its JV partner Santos said there were delays in the execution of a gas sales agreement due to the poor financial climate.

However it was revived in January following Santos' signing of CITIC Pacific as the project's foundation gas buyer.

Under that $812 million contract, Santos will supply CITIC's Sino Iron magnetite mining project at Cape Preston 100 km south of Dampier with 75 petajoules (69.75 bcf) of gas over 7 years from second-half 2011. The gas will be used as generation fuel for Sino's 450-Mw electric power station now under construction.

Reindeer field was discovered in 1997 on permit WA-209-P. It has reserves of 390-610 bcf of gas. The gas will be transported by undersea pipeline 105 km to the Devil Creek plant. Flow capacity will be about 215 terajoules/day (199 MMcfd). All of the gas will be fed into the domestic market.

Apache owns 55% of the project, with Santos holding 45%.

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