AWE kick starts 2016 with Waitsia go-ahead

The Western Australian oil and gas sector has received a significant kick start to the New Year with AWE Limited and Origin Energy announcing they will be fast-tracking the development of the Waitsia gas field to the north of Perth.

Only discovered in September 2014 with the drilling of the Senecio-3 well in the onshore Perth Basin approximately 14.5 kilometres east of Dongara, the Waitsia field is set to start producing gas in Quarter 3, 2016 after a Final Investment Decision (FID) for a Stage 1A development of the field was announced on January 5.

The Stage 1A development will comprise 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). Treated gas from XPF will be delivered to the Parmelia pipeline for domestic consumption in WA.

Engineering, execution and management costs for Stage 1A of the Waitsia gas project are estimated at gross $17.5 million, with construction work to include two four-inch flowlines from the well heads to a northern gathering manifold and a six-inch pipeline to transport the gas to XPF.

The initial capacity of XPF will be approximately 10 TJ per day, with further expansion possible. A take or pay gas sales agreement, based on 90 per cent of annual gas quantity, has been negotiated with Alinta Energy for 10 TJ/day over a 2.5 year period.

AWE’s Managing Director and CEO, Bruce Clement, said that FID of the first stage of the

Waitsia gas project was a landmark for AWE and would reinvigorate the potential for onshore gas production in Western Australia.

“The 484 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 optimise our plans for full field development,” he said.

“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 per cent of Western Australia’s daily domestic consumption,” Mr Clement said.

Mr Clement said AWE and Origin 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.