Decommissioning and Rehabilitation Project

Mitsui E&P Australia (MEPAU) is undertaking deconstruction, decommissioning and rehabilitation activities throughout our Perth Basin permits, as part of a campaign to return sites which are no longer in use to their landowners for ongoing use.

Decommissioning is an established industry practice undertaken at the end of life of a well or facility using a decommissioning plan approved by the government regulator, Department of Mines, Industry Regulation and Safety (DMIRS) with specialist support from agencies such as the Department of Biodiversity, Conservation and Attractions (DBCA) and the Department of Water and Environmental Regulation (DWER).

Background

The Decommissioning and Rehabilitation Project began in 2013 by MEPAU’s predecessor, AWE Limited (AWE). At that time, approximately 75 wells and four facilities were being considered for decommissioning. The majority of the wells had been drilled by predecessor companies, beginning in the 1960s.

MEPAU is decommissioning an average of five wells each year, using a comprehensive assessment strategy to determine the order of priority. So far, 31 wells have been decommissioned, with infrastructure such as flowlines and mud sumps removed as part of the process.

Deconstruction and decommissioning activities were undertaken at three of the facilities during 2020, with the fourth sold to another company in 2018.

The Decommissioning and Rehabilitation Project means that even with the Waitsia Gas Project Stage 2 development, MEPAU’s overall footprint in the Perth Basin is reducing.

Why decommission and rehabilitate?

There are four compelling reasons to decommission and rehabilitate old assets.

Legal Requirement

Firstly, it’s a legal requirement.

DMIRS states, in its Petroleum Decommissioning Guideline, that “Change of ownership is conditional on the new registered holder accepting any residual responsibilities and liabilities attached to that licence.” So, when MEPAU acquired AWE Limited, it also assumed the responsibility of cleaning up old assets in our licence areas as prescribed by government regulations, as AWE did when it acquired the permits from its predecessor companies.

Good Business Sense

Although the guideline does not prescribe set timeframes for decommissioning, in a purely business sense, it’s preferable to decommission a well or facility once it’s no longer needed. The longer it’s left, the more complicated and expensive the task is likely to become.

Responsible Land Use

Rehabilitated sites can be used again for other purposes, such as agricultural uses or nature reserve. Returning the land for ongoing use shows good land stewardship and coexistence with other land users.

Social Licence to Operate

Decommissioning and rehabilitating is an important part of our Social Licence to Operate.

Disused facilities tend to become unsightly and even though they may be on private land and not seen by many people, are best removed as a sign of good operational standards. For example, the tanks at the Hovea Production Facility (HPF) and the Dongara 30 Group were removed as part of our commitment to reduce our overall footprint, which includes visual considerations.

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Rig crew running in hole with the tubing

Old wells continue to be decommissioned

In 2019 MEPAU decommissioned three wells in the Woodada and the Dongara gas fields areas of the Mid West that were no longer being used.

Dongara Men in Sheds working together

MEPAU and Dongara Men in Sheds are turning waste into a resource

Deconstruction activities allow Dongara Men in Sheds to provide benefits to local community.

Well Monitoring and Assessment Strategy

All wells are monitored in accordance with regulatory requirements administered by DMIRS.

At least twice a year MEPAU takes a pressure reading of each well. If routine monitoring results indicate further investigation is required, further assessment is undertaken and additional monitoring may occur. For example , the process of wireline logging, where electronic logging tools are inserted into the well on a wire, provides additional detailed information about the wellbore.

Wireline logging helps identify the best management option, whether it’s shutting-in, suspending, or decommissioning the well.

Shutting-in refers to closing off a well so that it stops producing. This is often used when a well ceases production temporarily. If a well is unlikely to be used for production again, it is then suspended (Figure 1). This involves closing off a well from production and installing a barrier to temporarily isolate it from the producing reservoir. It is the step taken prior to decommissioning a well bore.

Drover-01 wellhead - suspended prior to decommissioning

Figure 1. Drover-01 wellhead – suspended prior to decommissioning

Well decommissioning has been known historically within the industry as ‘plug and abandon’, or P&A. This term is being phased out as it doesn’t accurately describe the extremely thorough process of permanently closing down a well.

Our Monitoring and Assessment Strategy helps us determine the priority for well decommissioning.

Well Decommissioning

Well decommissioning involves environmentally sound and safe isolation of the wellbore and is carried out in accordance with regulatory approvals specific for each well. It occurs when the wellbore is no longer needed for production, exploration or appraisal purposes. Once completed, the process prevents communication through the wellbore between subsurface and surface regions, so the well is effectively sealed off.

Well decommissioning process

MEPAU and the onshore gas industry are subject to strict and transparent regulation with all activity overseen by DMIRS. Well decommissioning activities are approved by regulators prior to any activity beginning.

Typical steps of the decommissioning process include:

  • Removing any production tubing, the tubing used in a wellbore for production fluids to travel through
  • Isolating productive hydrocarbon containing rock formations from other formations by installing cement plugs at several intervals
  • Pressure testing the cement plugs
  • Cutting off the well head below ground level
  • Removing remaining surface equipment and facilities, and
  • Rehabilitating the site to an end use agreed with the landowner.

What is a hydrocarbon?

A hydrocarbon is a compound made up of carbon and hydrogen.

There are many different configurations of hydrocarbons.

Methane is the simplest hydrocarbon. It’s made up of one carbon atom and four hydrogen atoms and is the largest component of natural gas.

Methane is the simplest hydrocarbon
First you must prepare the site

1. Prepare site

Place isolation barriers into the wellbore
2. Place isolation barriers in wellbore
Cut wellhead
3. Cut wellhead
Rehabilitate site for reuse
4. Rehabilitate site

Figure 2. Typical well bore decommissioning process

Challenges of decommissioning wells

A major challenge with decommissioning historic wells is the absence of records like those currently maintained. Some of the old wells were drilled decades ago, at a time when regulations and record keeping practices were not as rigorous as they have been for the past twenty years or so.

This means that if an older well is being decommissioned we don’t always know exactly what we’ll find. We use sophisticated technical equipment to measure, test and prepare for decommissioning, but even then, old and brittle components within the well bore may tend to break apart as we work. Wellbores have multiple containment structures so the integrity of the overall well is maintained even if internal components break.

Decommissioning old wells can be a costly exercise.

When rehabilitation reaches the agreed completion criteria, you cannot tell we were ever there (Figure 3).

Rehabilitated well site in the Woodada gas field that has met its completion criteria
Figure 3. Rehabilitated well site in the Woodada gas field that has met its completion criteria

Production Facilities Deconstruction Activities

In December 2020, MEPAU commenced deconstruction of above ground metal infrastructure at production facilities that were no longer being used including Woodada Production Facility (WPF), Dongara Production Facility (DPF) and some nearby infrastructure as well as Hovea Production Facility (HPF).

Deconstruction is the first phase of removing redundant infrastructure. It involves preparing processing equipment for removal to ensure no liquids or gas are present, then removing the infrastructure for recycling wherever practicable.

Deconstruction activities resulted in 1472 tonnes of scrap metal being removed and provided for recycling. The scrap metal was a mix of production equipment, flowline infrastructure and storage tanks.

Where possible, equipment and materials are reused or repurposed. In 2020/2021 we achieved this through a partnership with the Dongara Men In Sheds.

Facility deconstruction in progress at Woodada Production Facility
Facility deconstruction in progress at Woodada Production Facility
Facility deconstruction in progress at Woodada Production Facility
Facility deconstruction in progress at Woodada Production Facility

Figure 4. Facility deconstruction in progress at Woodada Production Facility

Challenges of decommissioning production facilities

The process of decommissioning oil and gas assets is still relatively new in Western Australia, because we don’t have as many mature fields as in other parts of the world. This provides advantages as it means most of the gas fields have been developed under modern regulations and operational practices which are more rigorous than in the early days of development.

However, there are limited examples of removing underground flowlines and production facilities in our local environment. Liaising closely with landowners and relevant regulators helps us identify the safest and best way to proceed.

Facility deconstruction example Dongara Production Facility before deconstruction
Facility deconstruction example Dongara Production Facility after deconstruction

Figure 5. Facility deconstruction example – Dongara Production Facility before and after deconstruction

Facility deconstruction example- Hovea Production Facility before deconstruction
Facility deconstruction example- Hovea Production Facility after deconstruction

Figure 6. Facility deconstruction example – Hovea Production Facility before and after deconstruction

Decommissioning and Rehabilitation

Other than the well sites in the Woodada Gas Field (WGF), most of the well sites are located on cleared agricultural land. The WGF lies mainly in Lake Logue Nature Reserve (created after WGF started production). It has specific decommissioning criteria being developed in liaison with the DBCA whereas decommissioning criteria for the other well sites are developed in liaison with the landowner.

The WPF and WGF are scheduled for decommissioning and rehabilitation in early 2022, excluding well sites yet to be decommissioned.

Although well decommissioning requires specialist technical expertise, MEPAU uses local services and supplies whenever practicable to assist with decommissioning and rehabilitation. For example, the earthworks required to reinstate natural land contours and prepare the soil for rehabilitation and waste removal are undertaken by a range of local service providers.

Landowners and nearby residents are consulted prior to activities starting at each site and completion criteria are developed collaboratively to ensure transparency about the process and a successful handover of the site for ongoing land use.

Rehabilitation in vegetated areas involves topsoil and vegetation spreading and utilising seed collected from areas of local native vegetation.

So far, we have deconstructed three production facilities and partially decommissioned one of them, Woodada Production Facility. The final phase of decommissioning at Woodada Production Facility is scheduled during 2022. The other facilities are still being partially used and will be decommissioned when they are no longer needed in preparation for returning the sites for another land use.

We are proud to be blazing the decommissioning and rehabilitation trail in the Perth Basin. No other company has come close to successfully decommissioning 31 wells and deconstructing three production facilities.

See what we’re currently working on by consulting our Schedule of Activities for 2021/2022.

What is a concrete bund?

A concrete bund is a catchment area, essentially a concrete pad with concrete walls.

Any tanks containing liquid sit within a concrete bund. This way, in the very unlikely event that a spill occurs, liquid will be contained. Bund specifications vary according to their use, which is regulated according to required standards.

Deconstruction vs Decommissioning

There’s an important distinction to note between deconstruction and decommissioning.

Deconstruction is the process of taking an asset apart. Before we start dismantling equipment, all residual hydrocarbons are flushed out. Then we remove metal and other equipment located above the surface.

Decommissioning is where we remove remaining items as agreed with the landowner and prepare it for rehabilitation. This may include equipment found underground. Sometimes the landowners want items left behind for ongoing use (e.g. tracks, well pads to reuse as laydown areas, water bores and fences).

Community Benefits

Decommissioning is a major process in its own right, and it reaps similar benefits for the community as the exploration, development and production phases of gas production.

Upskilling Locals

Local contractors are employed wherever practicable across all stages of MEPAU’s gas production.

As the deconstruction and decommissioning activities proceed, expertise is developed and shared between MEPAU staff and Mid West operators.

This expertise can then be utilised at other companies embarking on decommissioning activities in the Perth Basin and elsewhere.

Financial Impact

Decommissioning is a major financial outlay. Much of the money spent on deconstruction, decommissioning and rehabilitation has been spent in the Mid West region.

Money earned locally continues to circulate locally, benefitting everyone in the area.

Community Relationships

The Production Facilities Deconstruction activities, which commenced in 2020, have created a friendship between Dongara Men in Sheds and MEPAU.

Dongara Men in Sheds were involved in the initiative to recycle scrap metal removed from the production facilities. As a direct result, their membership increased.

“Act, Belong, Commit” is known to be an important foundation for mental health, and MEPAU is delighted to be supporting men in the Dongara region via the Dongara Men in Sheds.

The money raised by Dongara Men in Sheds through their involvement in the deconstruction project is being used to improve the local community.

In addition, MEPAU routinely hosts site tours so people can get firsthand experience of how we work. Site tours are held for drilling, production and decommissioning work. In 2015, the Shire of Coorow Drover-01 Community Reference Group visited the Drover-01 well site, which was co-hosted by the landowner as the site had already been returned for his ongoing use. The landowner had asked for the well pad to be left so he could build sheds on the site. (Figure 7).

Shire of Coorow Drover-01 Community Reference Group representatives visiting the decommssioned well site

Figure 7. Shire of Coorow Drover-01 Community Reference Group representatives visiting the decommssioned well site

Look out for the baby birds

The local Welcome Swallows are fond of nesting in the various sheds found at our production facilities.

One of the sheds we deconstructed in January 2021 housed two baby swallows that were almost ready to leave the nest. We carefully relocated the nest to nearby, and the parents returned. The baby birds successfully fledged a few days later.

Welcome Swallows in nest
Care and Maintenance

Care and Maintenance

When a facility is not being used, it’s put into care and maintenance. Read more about Care and Maintenance.

What we do at Mitsui E&P Australia

What we do

We are actively exploring, appraising, developing and producing oil and gas in a number of locations in the northern Perth Basin. Read more about what we do

Planning

Before anything can happen we need to plan carefully. Read more about the planning process.

Exploration/Appraisal

We look for gas, and when we find it we figure out if it’s worth pursuing further. Find out more about our exploration and appraisal process.

Development

Once we’ve confirmed a well is commercially viable we get ready to put it into production. Read more about the development process.

Production

During the production phase we produce gas from the well and sell it. Find out more about the production process.

The Northern Perth Basin

The northern Perth Basin is a prolific oil and gas producing area covering a large portion of the Mid West region of Western Australia. The town of Dongara, located approximately 360km north of Perth, is the regional economic hub for a number of industries, including oil and gas.

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