Santos Limited embraced the Festive Spirit by unveiling, arguably, Australia's most expensive "Christmas trees" – valued at about $7 million apiece.
The two "Christmas trees" – which is what the petroleum industry calls the subsea well control equipment associated with the subsea production system – are an integral part of the $200 million Casino gas project, in the offshore Otway Basin, Victoria.
In mid-February 2005, the subsea trees will be installed in about 70 meters of water, about 30 kilometers off Port Campbell on the Victorian coast.
Over a two-day installation period, the trees – which weigh about 30 tons each, and measure about 3 meters x 4 meters – will be installed on wellheads as part of the offshore drilling program.
Once operational, they will regulate the flow of gas from the subsea wells to an onshore processing facility at Iona, operated by SPI Electricity Pty Ltd, trading as TXU.
The subsea system has been constructed by international engineering firm, Cooper Cameron Pty Ltd, at its Singapore and German manufacturing plants and shipped to the Deer Park facility for testing prior to installation.
FACTS AT A GLANCE
The Casino gas field is a new Australian discovery, located within VIC/P44, approximately 30 kilometers offshore from Port Campbell.
The Casino project is a joint venture between Santos Limited (operator), Peedamullah Petroleum (Australian Worldwide Exploration) and Mitwell Energy Resources (Mitsui).
Santos farmed into the exploration permit VIC/P44 containing the Casino field in August 2001 taking a 50% interest from Strike Oil, which was awarded the permit in August 1999. AWE (25%) and Mitsui (25%) took the remaining Strike Oil stake in July 2003 and September 2003 respectively.
The Casino field was discovered with the drilling of Casino 1 just 12 months later in September 2002.
SPI Electricity has signed a contract with the joint venture partners to be supplied with up to 420 petajoules (PJ) of gas from Casino over 12 years, for the Victorian and South Australian markets.
In addition, the contract allows for the joint venture partners to process a further 105 PJ of gas (above and beyond the 420 PJ) over a further three years at SPI Electricity's Iona plant in Victoria.
The combined agreements could be worth up to $1.7 billion to the joint venture partners, dependant on future exploration success.
Gas production is expected to start in the first quarter of 2006.
Planned annual production is expected to plateau at 35 PJ per annum based on the Proven plus Probable gas reserves (2P) of 285 PJ.
Participants in VIC P/44 are Santos as operator with 50%; Peedamullah Petroleum with 25%; Mittwell Energy with 25%.