Hardly a day seems to go by without some news of importance about the rapidly expanding gas and LNG sector in Western Australia.
Last week it was Chevron signing heads of agreement with Tokyo Electric Power for half of the Wheatstone project’s output for $90 billion, then Woodside surprised on Monday with a $2.5 billion fund raising to help pay for its 84% completed Pluto LNG project.
There are reports that the Poseidon well of Karoon Gas could report confirmation of a major gas discovery, and yesterday Chevron came back with confirmation of a major discovery of its own near its $43 billion Gorgon project.
Although it is too early to say how much gas is located at the Satyr-1 exploration well at the WA-374-P permit area, results so far are encouraging, Chevron Australia said in the statement.
In fact the new discovery in Western Australia could extend the life of the giant Gorgon project, even before the first gas is produced.
"We are delighted with the results of what is our largest ever drilling campaign offshore northwestern Australia," Chevron Australia managing director Roy Krzywosinski said in a statement yesterday.
"The continued success of our broader drilling program will provide additional natural gas to underpin the Gorgon and Wheatstone Projects."
Chevron Australia owns a 50% interest in the well, while Shell and Mobil Australia (Exxon) each hold 25%.
"The success of Satyr-1, following closely on the Achilles-1 discovery, highlights the quality of Chevron’s exploration capability in the region and the significance of Australia to Chevron’s energy portfolio," said Jim Blackwell, president, Chevron Asia Pacific Exploration and Production.
"The initial Gorgon Project development, in northwestern Australia, will include a three-train, 15 million-metric-tons-per-year liquefied natural gas facility and a domestic gas plant," the company said.
The company said the exploration well spudded on October 5 in 1,070 metres of water and was drilled to a total depth of 4,560 metres.
"Results indicate approximately 130 metres of net gas pay," Chevron Australia said.
The $43 billion Gorgon liquefied natural gas (LNG) project at Barrow Island about 130 kilometres off Western Australia’s north west coast, is Australia’s largest resources project.
It has an estimated 40 trillion cubic feet of gas at its various fields and will be operating for at least 40 years.
The Satyr-1 well is located northeast of Barrow Island, east of the Gorgon field.
Meanwhile the market is still waiting on the update from Karoon Gas on its Poseidon 2 well which is being drilled in the Browse Basin off the NW WA coast.
Karoon and ConocoPhillips, the third-biggest US oil company, have been exploring for gas in the Browse Basin, after Karoon last July compared the discovery with Woodside’s early North West Shelf finds.
Conoco is in a joint venture in Queensland in coal seam methane gas with Origin Energy.
It also is the lead company in the consortium, operating the producing LNG project based on the Bayu Udan strike in the Timor Sea, which is about to undergo an upgrade that will lift output.
Karoon is drilling at Poseidon-2 after a mechanical fault ruled out production tests at Poseidon-1.
But the company yesterday said work on Poseidon-2 has to be suspended because of cyclonic weather.
"On Saturday 12th December, poor weather conditions associated with the developing Cyclone Lawrence necessitated nonessential personnel evacuation and the temporary suspension of drilling operations on the Transocean Legend Drilling Rig.
"Similarly, the Poseidon 3D seismic acquisition program being carried out by the Geowave Voyager Seismic Vessel was temporarily suspended.
"Operations on the rig and seismic vessel will resume as soon as weather conditions allow," Karoon told the market in yesterday’s statement.
This means the update on the possible size of the discovery now probably won’t come until the end of the month or early in the New Year.
