Documents Reveal Bonaparte Delay

Plans by Santos and its French partner GDF Suez to develop a floating LNG project off WA's northern coast appear to be slipping, with the Bonaparte venture not expected to be operational until the end of 2018 at the earliest.

But the partners have also flagged that output from Bonaparte, based in the Joseph Bonaparte Basin 250km west of Darwin, may be increased from an initially planned two million tonnes of LNG a year to between two and three million tonnes.

The partners are yet to put a price tag on Bonaparte, which would become the second floating LNG project off WA's coast after Royal Dutch Shell's world-first Prelude development.

Submitting documents to the Federal Government's Department of Sustainability, Environment, Water, Population and Communities, Santos and GDF Suez said they expected to make a final investment decision in late 2014, followed by a four-year construction period.

The FID target date is at the tail-end of previous guidance from Santos of a sign-off in 2014, while only last year Santos was still aiming for an approval in 2013.

Bonaparte LNG will involve a floating LNG processing vessel moored over the Petrel, Tern and Frigate gasfields, which combined contain more than two trillion cubic feet of gas.

The gasfields have a carbon dioxide content of up to 5.2 percent, considerably lower, Santos and GDF Suez say, than that in the nearby fields being developed by Inpex Corp and PTTEP.

The CO{-2} content level is important because, unlike land-based LNG plants, floating ventures are yet to demonstrate they can reinject the greenhouse gas. The CO{-2} needs to be removed, and therefore disposed of, from the reservoir gas before it can be converted to LNG.

Santos and GDF Suez said they were committed to zero routine flaring and minimal routine venting of gas but would formulate a proper greenhouse gas abatement strategy at least a year before Bonaparte became operational.

GDF Suez, which is the world's third-biggest LNG buyer, has already paid Santos $US200 million ($205 million) as part of a 2009 farm-in deal and has to pay a further $US170 million upon FID. The French group will emerge with a 60 per cent of the development.

The documents reveal Santos and GDF Suez expect to begin front end engineering and design studies in 2013, followed by FID in the fourth quarter of 2014. Development drilling would begin in 2016 ahead of first gas in 2018.

Copyright (c) 2011, West Australian NewsPapers Limited