AWE, Origin to Develop Waitsia Gas Field Project in Onshore Perth Basin

AWE Limited reported Tuesday that the L1/L2 joint venture (JV) has taken a final investment decision (FID) to develop Stage 1A of the Waitsia gas field project, located onshore Perth Basin in Western Australia.

Australia's AWE, field operator of the 50-50 L1/L2 JV with Origin Energy Resources Ltd., revealed that the Stage 1A development comprises the installation of new infrastructure and upgrades to existing assets that will connect the recently flow tested Waitsia-1 and Senecio-3 gas wells to the Xyris Production Facility (XPF), where the treated gas will be delivered to the Parmelia pipeline for domestic consumption.

Two four-inch flowlines linking the well heads to a northern gathering manifold and a six-inch pipeline to transport the gas to XPF will be constructed for the project. The decision to proceed with Stage 1A of the Waitsia gas field development project follows the completion of front end engineering and design (FEED) studies and the selection of an engineering, procurement, construction and management (EPCM) contractor. The operator has also received approval for the pipeline licence and the environment plan for the in-field gas pipeline.

AWE said the initial capacity of XPF will be approximately 10 terajoules (TJ) per day, with further expansion possible, and first gas is scheduled for August. The L1/L2 JV has a already negotiated a take or pay gas sales agreement, based on 90 percent of annual gas quantity, with Alinta Energy for 10 TJ/day over a 2.5 year period although contract pricing was kept confidential for commercial reasons.

The cost of engineering, execution and management for the Waitsia Stage 1A gas project is estimated at gross $12.6 million (AUD 17.5 million), with AWE's share amounting to $6.5 million (AUD 9 million).

According to AWE's Managing Director and CEO Bruce Clement, the FID was a landmark for the Sdyney-based company and would reinvigorate the potential for onshore gas production in Western Australia.

“The 484 billion cubic feet (Bcf) gross Waitsia gas project, with its excellent conventional reservoir quality and proximity to existing infrastructure, is incredibly exciting for AWE and represents another significant step-up in the company’s growth potential ... First stage production from Waitsia will provide early cash flow from mid-2016 as well as valuable data that will help us optimize our plans for full field development."

"When fully developed, AWE anticipates that production from the Waitsia Field could be increased from the 10 TJ/day of Stage 1A to more than 100 TJ/day, which represents approximately 10 percent of Western Australia’s daily domestic consumption,” Clement added.

More gas supplies could be added to the Western Australia market as AWE is exploring the option of co-developing fields near to the Waitsia development.

“We are also evaluating the potential for co-developing the nearby Senecio/Synaphea/Irwin (SSI) tight gas fields. Together, these tight sandstone reservoirs are estimated to contain an additional gross 237 Bcf of gas,” the AWE CEO said.

Chee Yew has covered the upstream and downstream sectors of the oil and gas industry in Asia for more than 15 years. Email Chee Yew at cheeyew.cheang@rigzone.com

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