Santos, as Operator of the Casino field, announced on behalf of the VIC/P44 joint venture today that expenditure had been approved for the completion by the end of 2004 of Front End Engineering and Design (FEED) studies and regulatory approvals.
Pending a final investment decision, Santos said the FEED go-ahead would ensure the development schedule delivered first gas sales from Casino in the March 2006 quarter. The Joint Venture has already secured a 12-year gas sales agreement with TXU Australia to supply gas from the Casino field, discovered in September 2002, 29 kilometers southwest of Port Campbell and 250 kilometers southwest of Melbourne.
The Gas Sales Agreement is for an initial sales volume of up to 293 petajoules (PJ) of gas from the permit, with an option to extend this volume by a further 200 PJ. Casino is estimated to have current recoverable reserves of between 200 – 270 billion cubic feet of gas.
Santos' Managing Director Mr. John Ellice-Flint said, "The successful sale of gas from the Casino field to TXU was a ground-breaking commercial contract. We were able to finalize the sales contract with TXU prior to drilling the second appraisal well on the field. Casino is also a fine example of cycle time reduction with only 13 weeks between reaching total depth of the second appraisal well in November 2003 and committing to FEED".
Commercialization of the field is expected to include the drilling of two development wells, sub-sea infrastructure and the installation of a pipeline from the field to underneath the coastline near Port Campbell, continuing to TXU's Iona gas processing plant.
The Commonwealth and Victorian government authorities have formally approved the environmental assessment processes for the development of the Casino Project. The joint venture is confident these processes can be adequately met to receive formal environmental approvals prior to the end of 2004, but more importantly to protect the environment in which we intend to operate.
The Victorian Minister for Planning has also formally advised that with some conditions, preparation of an Environmental Effects Statement under the Environmental Effects Act is not required.
Participants in VIC/P44 are Santos as operator with 50%; Peedamullah Petroleum Ltd (AWE) with 25.0% and Mittwell Energy Resources Pty Ltd (Mitsui) with the remaining 25.0%.
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