AWE Limited and its joint venture partner Origin Energy have sanctioned an initial $17.5 million investment on infrastructure for their Waitsia gas filed project in the onshore Perth Basin in Western Australia.
The first stage of the project involves 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).
AWE, which will contribute $9 million of the total initial investment, said construction work will 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 company said that Front End Engineering (FEED) studies have already been completed, an EPCM contractor has been selected, and that the pipeline license and the environmental plan for the in-field gas pipeline have been approved.
According to AWE’s Managing Director and CEO Bruce Clement, the initial capacity of XPF will be approximately 10 TJ per day, with first gas delivery scheduled for August 2016.
He said the joint venture partners have negotiated a take or pay gas sales agreement with Alinta Energy for 10 TJ per day over a two-and-a-half year period.
“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 full field development,” Mr Clement said.
“When fully developed, AWE anticipates that production form the Waitsia Filed could be increased from the 10 TJ/day of Stage 1A to more than 100 TJ/day, which represents approximately 10% of WA’s daily domestic consumption.”
He said AWE was also evaluating the potential for co-developing the nearby Senecio/Synaphea/Irwin (SSI) tight gas fields which are estimated to contain an additional gross 237 Bcf of gas.
“AWE has a strong track record of early involvement in projects where we can add significant value as they are progressed through to development. Projects such as Ande Ande Lumut and Sugarloaf highlight how AWE uses its expertise to generate value growth,” Mr Clement added.
“Similarly, once developed the onshore Waitsia gas project’s low operating costs, in an historically strong west coast gas market, will likely see AWE become the low cost gas producer in WA.”