BHP Brings Ohanet Development Onstream

BHP has commenced gas production from the jointly operated BHP Billiton / SONATRACH wet gas development at Ohanet in southern Algeria. The new facility was commissioned on schedule and within the original US$1 billion budget (US$464 million net to BHP Billiton).

The new processing facility will treat around 710 million standard cubic feet per day (MMscf/d) of gas and produce a maximum of 30,000 barrels per day (bbl/d) of condensate and 26,000 bbl/d of Liquefied Petroleum Gas (LPG), together with a stream of dry pipeline sales quality gas for SONATRACH.

Philip Aiken, President and CEO of BHP Billiton Petroleum, said: "The delivery of the Ohanet development is another example of BHP Billiton's ability to deliver a complex project in a challenging operating environment. By any measure – technical, financial, or health & safety - the project is an outstanding success and I applaud all those involved who participated in the development for achieving this major milestone. We now look forward to a safe and successful ramp-up to full production capacity over the coming weeks."

A total of 28 new wells have been drilled and completed and 15 existing wells re-completed to develop the 4 reservoirs forming the development. A further 4 wells will be drilled after 3-4 years of production history has been gathered.

"The Ohanet development represents our first commercial production in Algeria," added Mr Aiken. "With the completion of the ROD Integrated Development next year we will have built an excellent platform in Algeria on which we hope to build."

BHP Billiton holds a 45% equity interest in Ohanet with other partners Japan Ohanet Oil & Gas Co., Ltd., 30%; Woodside Energy (Algeria) Pty. Ltd., 15%; and Petrofac Resources (Ohanet) LLC, 10%.

In July 2000, BHP Billiton and its joint venture partners signed a Risk Service Contract (RSC) with SONATRACH for the development of four gas condensate reservoirs in the Ohanet region of Illizi province, approximately 1300 km southeast of Algiers.

Under the terms of the RSC the total production from the fields is the property of SONATRACH. The foreign participants in the venture bear the total cost of developing the Ohanet reservoirs, and in return recover their investment, together with an agreed fixed profit margin from hydrocarbon liquids production, over a target eight year period (from the start of production). The monetary entitlement will be translated into volumes of condensate, butane and propane that will be lifted from export ports on the Algerian coast. These volumes will be determined based on prices posted by SONATRACH. Under the terms of the RSC, BHP Billiton and our joint venture partners are not entitled to any of the pipeline sales gas or the associated revenue. This gas will be utilised by SONATRACH to meet its long term Mediterranean pipeline gas and LNG sales requirements.

A total of 28 new wells have been drilled and completed and 15 existing wells have been re-completed. Four further new wells (as required under the RSC) have been deferred to allow three to four years of production history to be gathered.

Over 150 kilometers of flowline connects the producing wells to the Central Processing Facility.

The Ohanet sub-surface and drilling campaign involved 2 seismic acquisition crews and 3 rigs operating in the field. Simultaneously, the EPC (Engineer/Procure/ Construct) contractor supervised some 25 subcontractors erecting 4,500 tonnes of steel, pouring 13,000 m3 of concrete and installing 288 items of equipment. Furthermore, all the materials for the development and everything to support the people working at site (at peak more than 3000) were brought in by road, a distance of some 1300km from the coast.