AWE and its joint venture partner Origin Energy have made the Final Investment Decision (FID) for Stage 1A of the Waitsia gas field development project, the Waitsia Gas Project.
Stage 1A comprises the installation of new infrastructure and upgrades to existing assets that will connect the recently flow tested Waitsia-01 and Senecio-03 gas wells to the Xyris Production Facility (XPF) for an extended production test. Processed gas from XPF will be delivered to the Parmelia Gas Pipeline for domestic consumption in Western Australia.
Engineering, execution and management costs for Stage 1A of the Waitsia gas project are estimated at gross $17.5 million ($9 million net to AWE). Wherever possible AWE works with local suppliers and businesses and will be locally sourcing as many of these positions and contracts as practicable.
These costs include a refurbishment of the XPF facility, which has been in Care & Maintenance since 2011.
Currently AWE contributes more than $6 million a year to the Mid West economy through wages, supply and service contracts with local businesses and community partnerships. The Waitsia Gas Project will provide opportunities to increase this amount.
The initial capacity of XPF will be approximately 10 TJ per day, with further expansion possible, and first gas from the extended production test is scheduled for August 2016.
A take or pay gas sales agreement, based on 90% of annual gas quantity, has been negotiated with Alinta Energy for 10 TJ/day over a 2.5 year period. Pricing remains confidential for commercial reasons.
Mr Bruce Clement, AWE’s Managing Director and CEO, 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.
“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.
AWE has held briefings with key stakeholders and decision-makers about Stage 1A. A number of necessary environmental and operational approvals from the relevant regulatory bodies are being sought.
As the Waitsia Gas Project enters different stages of development, we will continually update the community and will hold information days giving participants the opportunity to speak one on one with our staff. This engagement process will form an important part of any further environmental approvals required.
In the meantime, if you have any questions about Stage 1A of the Waitsia Gas Project, please contact us.