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Western Australia: Expanding LNG Opportunities Down Under

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While being the most isolated capital city of the world, Perth, Western Australia, is still a shelter for a plethora of international oil and gas companies with their sights firmly set on producing the large-scale liquefied natural gas (LNG) developments. By the end of 2018, Western Australia will be exporting nearly 50 million tonnes per annum (mtpa) of LNG, with Australia’s total expected export of 88 mtpa surpassing Qatar as the world’s top LNG exporter (WA LNG Industry Profile 2017; Financial Review 2017).

No sooner are the latest LNG projects Wheatstone and Prelude starting up than the Perth oil and gas companies are looking to develop further LNG through the soon-to-be off-plateau North West Shelf (NWS) LNG Project. With more than 40 Tcf of discovered offshore conventional gas resources without an allocated development, there are significant opportunities for further expansion. This is an exciting time for the young professionals lucky enough to call Perth their home.

Perth, Western Australia

Perth is home to the Whadjuk Noongar people, the traditional owners and custodians of the land and waters. It is important that we acknowledge the traditional aboriginal indigenous people to recognize the land is steeped in 40,000 years of history and culture, with Perth being an important center for meeting, travel, and trade, a history which continues today (Perth City Snapshot 2016).

Perth city was founded in 1829 by Captain James Stirling and developed through to the 1890s thanks to British convicts. From the 1890s to 1914, Perth’s population tripled during the gold rush boom, with the Kalgoorlie mine continuing to be the world’s largest producer of gold (Perth City Snapshot 2016). After the two World Wars, which saw the population decrease 10% to support the front line, Perth has flourished as a mega resource mining hub (producing 50 different commodities) with a strong 2 million population.

Current State of the LNG Plays

The 80 Tcf (2P + 2C) of conventional gas found in Jurassic and Triassic sandstone reservoirs in the Carnarvon Basin off the Dampier coast in Northern Western Australia feeds the four megaproject LNG export developments:

NWS Project is the oldest, operated by Woodside Energy, and has produced more than 4,000 LNG cargos since first export in 1989. It is currently operating at 16.9 mtpa via 5 trains.

Pluto LNG delivered its first cargo in 2012. It is operated by Woodside Energy, and is currently operating at 4.9 mtpa via 1 train producing from the 5-Tcf Pluto field.

Gorgon Project is operated by Chevron and is situated on Barrow Island, which is a Class A Nature Reserve. Gorgon produced its first cargo in 2016 and includes a 3-train, 15.6-mtpa LNG facility and a carbon dioxide injection project to lower greenhouse gas emissions.

Wheatstone Project is operated by Chevron and announced its first shipment of LNG in October and is expected to produce 8.9 mtpa LNG at its peak.

In addition to the onshore LNG plants, Shell is bringing on-stream the mega Prelude Floating LNG project, located in the Browse Basin 475 km north-northeast of Broome, Western Australia. This monster facility has a production capacity of 3.6 mtpa of LNG on the 488-m (1,600 ft) long, 74-m (243 ft) wide facility supported by a 120- to 140-member operations crew. The facility is permanently moored in 250 m (820 ft) water depth and is designed to withstand a 10,000-year storm.

Future LNG Projects

While the LNG prices have softened substantially from their high during 2011–2014, the current [July 2017] average price of $8.3/MMBtu for LNG to Japan, together with the expected supply/demand shortfall from the year 2023 (Shell LNG Outlook), has many companies focused on how to unlock further LNG developments off the coast of Western Australia, namely the Browse, Scarborough, and Greater Gorgon fields. With expansion opportunities available at most LNG plants and NWS Project able to host ullage from 2020 onward, it is an exciting time to see which project will take off first and provide shareholder and stakeholder returns.

Perth is a thriving resource-orientated city that is working hard to develop megaprojects to export LNG around the world. For the young professional cohort that call Perth home, it is a safe, vibrant city with beautiful weather, fantastic holiday destinations, and importantly, copious career opportunities.

Reference

Qatar won't let Australia take its LNG crown without a fight. Financial Review (website). Published 5 Jul 2017 at 4:38 PM, Updated Jul 5 2017 at 6:34 PM.

Perth City and Western Australia Facts

 

Perth is the capital city of Western Australia. It is the sunniest capital city in the world with an average 8 hours per day sunshine 365 days per year.

 

Perth’s Mediterranean climate makes for glorious summer temperatures averaging 30°C (86°F) during the day and 17°C (63°F) at night—perfect for a lot of summer evening barbecues with a beer after work.

 

It is the most isolated city in the world; it is closer to Singapore and Indonesia than the capital of Australia, Canberra. In fact, the closest major Australian city to Perth is Adelaide, being 2,200 km away via a 3-hour flight or 28-hour drive.

 

Perth Central Business District Park is the biggest in the world (bigger than Central Park in New York City). It also has a functioning airport, although rarely used nowadays except for special events.

 

Perth became known worldwide as the “City of Light” when the Friendship 7 spacecraft flew over the city in 1962, and people of Perth turned on the lights to acknowledge its mission.

Western Australia has 12,500 km (7,700 miles) of pristine coastline with some of the world’s best sunsets.
The world’s biggest fish, the 13-m whale shark, lives off the coast of Northern Western Australia.
Western Australia holds the world’s largest gold and diamond mines and is the largest producer of pearls.
SPE has a strong cohort of connected petroleum professionals in Western Australia (http://www.spe-wa.org), hosting monthly lectures, regular seminars, and the always fabulous annual black-tie ball. So, make sure to check in with the local SPE crew if you are ever in town.
Head over to www.westernaustralia.com to get inspired and plan a holiday down under. 

David Sturgess is a petroleum engineer at Woodside Energy in Perth, Australia, where he is  a joint venture advisor, providing business analysis and governance for the North West Shelf LNG Project. Before that, Sturgess advised on subsurface governance and compliance and reservoir management support evaluating new opportunities. He works across subsurface performance, operation optimization, and business analysis disciplines. Sturgess served as an editor of the SPE The Way Ahead magazine until recently and is a member of the SPE Sustainability Task Force. He holds a BEng in chemical and materials engineering from the University of Auckland and the SPE Petroleum Engineering Certification. 

Reza Rahimi and Radmila Mandzhieva are members of the TWA Editorial Committee.


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