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Australia : AWE sanctions first stage Waitsia gas field development.

AWE Limited has announced that the AWE-Operated L1/L2 partnership has taken the Final Investment Decision (FID) for Stage 1A of the Waitsia gas field development project, sited in the onshore Perth Basin, Western Australia.

Stage 1A includes the installation of new infrastructure and upgrades to current assets that will connect the newly flow tested Waitsia-1 and Senecio-3 gas wells to the Xyris Production Facility (XPF). Treated gas from XPF will be carried to the Parmelia pipeline for local consumption.

Engineering, implementation and management costs for Stage 1A of the Waitsia gas project would be gross $17.5 million ($9 million net to AWE). Building work will comprise two four-inch flowlines from the well heads to a northern gathering manifold and a six-inch pipeline to carry the gas to XPF. FEED studies have been concluded, and an EPCM contractor has been selected.

Additionally, the pipeline license and the environment plan for the in-field gas pipeline have won approval.

The initial capacity of XPF will be around 10 TJ per day, with further expansion possible, and first gas is slated for August 2016.

Bruce Clement, AWE's Managing Director and CEO, said that FID of the first stage of the Waitsia gas project was a milestone for AWE and would revive the potential for onshore gas production in Western Australia.

He said,'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 added,'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% of Western Australia's daily domestic consumption. The Waitsia development will deliver substantial benefits to the local Mid West community through additional direct investment, supplier agreements and employment opportunities, while at the same time adding significant volumes to domestic gas supply and contributing substantial royalties to the WA government over the project life. We 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.'

He concluded,'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 asset value growth. 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 Western Australia.'

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Publication:Mena Report
Geographic Code:8AUST
Date:Jan 6, 2016
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