LNG

.French major TotalEnergies has signed an agreement to acquire a 50 percent interest in Malaysian independent gas producer and operator Sapura-OMV Upstream, a Malaysian-Austrian joint venture and some of whose feed-gas assets are delivered to the Bintulu LNG plant.

Clough, the Australian energy engineering company, said it achieved its first major concrete pour and first structural steel erection on site at the Waitsia 2 gas project being constructed for LNG production in the Perth Basin onshore Western Australia.

Clough won the engineering, procurement and construction work for the field near the town of Dongara, located about 350 kilometres (217 miles) north of the city of Perth and 65km south of the town of Geraldton.

Beach Energy of Australia and a subsidiary of Japan’s Mitsui and Co. each own 50 percent of the venture and Mitsui is the operator of the Waitsia field.

Beach and Mitsui have also finalized and signed key commercial agreements with shareholders of the North West Shelf LNG plant to enable LNG exports, with the State of Western Australia and the pipeline and project company, Australian Gas Infrastructure Group (AGIG).

Clough said the concrete pour at the site was a 14 cubic metres condensate storage slab and bund, which was followed later that same day by the first steel erection.

“This will form the main spine of the facility, a central 200-metre pipe track weighing over 100 tonnes,” Clough explained.

The start of full construction activities came a week after the first night of occupation at the recently completed temporary construction village.

“With bulk earthworks and piling now nearing completion, the project ramps up and hits its next phase of self-perform structural, mechanical and piping construction work,” said Clough.

The Waitsia gas field is ranked one of the largest gas fields ever discovered onshore in Australia and it is forecast to bring significant economic benefits to the Mid-West region from both construction and operating phases.

The Waitsia Stage 2 project includes a new gas processing plant with a 20-year life-cycle that will convey gas via the nearby Dampier to Bunbury Natural Gas Pipeline.

The Beach-Mitsui venture and Woodside Petroleum subsidiary, Woodside Burrup Pty Ltd, with gas from the Pluto gas fields, have become the inaugural third parties to sign binding commercial access agreements with the North West Shelf LNG partners.

The six NWS LNG partners are Australia’s Woodside and BHP, UK major BP, Chevron Corp., Royal Dutch Shell and a Japanese partnership comprising Mitsubishi Corp. and Waitsia gas shareholder Mitsui.

The Gas Processing Agreement and related agreements signed with the NWS LNG will enable up to 1.5 million tonnes of LNG per annum to be tolled and processed into LNG through the NWS facilities in Karratha between the second half of 2023 and the end of 2028.

Beach and Mitsui will each market their respective LNG equity interests independently of the NWS LNG plant partners.

Mitsui is already a long-standing LNG exporter while Beach will become an LNG player for the first time in the company’s 60-year history.

Two Japanese trading houses, Marubeni Corp. and Mitsui and Co., which have diverse interests in the LNG sector and other industries, have completed a joint technological development programme for the demonstration of unmanned ships.

Australian company Beach Energy and Mitsui and Co. of Japan have taken a positive final investment decision for stage-two development of the Waitsia onshore natural gas field that will contribute to equity LNG production in Western Australia by 2023.

Beach and Mitsui each own 50 percent of the venture and the operator of the Waitsia field in the onshore Perth Basin is Mitsui subsidiary, Mitsui Exploration and Production (Australia).

Beach and Mitsui said they had finalized and signed key commercial agreements with the North West Shelf LNG plant shareholders, the State of Western Australia and the pipeline and project company, Australian Gas Infrastructure Group (AGIG).

The Beach-Mitsui venture and Woodside Petroleum subsidiary, Woodside Burrup Pty Ltd, with gas from the Pluto gas fields, become the inaugural third parties to sign binding commercial access agreements with the North West Shelf LNG partners.

The six NWS LNG partners are Australia’s Woodside and BHP, UK major BP, Chevron Corp., Royal Dutch Shell and a Japanese partnership comprising Mitsubishi Corp. and Waitsia gas shareholder Mitsui.

“First equity LNG sales from Waitsia Stage 2 are expected to commence in in the second half of 2023,” said a statement from Beach.

“The Gas Processing Agreement and related agreements signed with the NWS LNG will enable up to 1.5 million tonnes of LNG per annum - 0.75MTPA of LNG to Beach) of Waitsia gas to be tolled and processed into LNG through the NWS facilities in Karratha between the second half of 2023 and the end of 2028,” stated Beach.

Beach and Mitsui will each market their respective LNG equity interest independently of the NWS LNG plant partners.

Beach Managing Director Matt Kay said the approval of the project delivers on a core element of Beach’s five-year growth strategy aimed at delivering annual production of more than 37 million barrels of oil equivalent by 2025.

“Waitsia is a world class, low cost, onshore gas resource and we are thrilled to be growing the Beach portfolio in Western Australia,” Kay explained.

“We believe the project offers material value to Beach’s shareholders and, through the agreement to export through the North West Shelf facilities, makes Beach an LNG player for the first time in the company’s 60-year history,” stated Kay.

“In addition to royalties, Waitsia will deliver approximately two hundred jobs for Western Australians through the development of our resources, construction of the new gas facility and its ongoing production,” he stated.

The Waitsia gas development involves the drilling of up to six wells, construction of a new gas processing facility, planned with preferred contractor Clough Ltd, and associated gas gathering infrastructure.

Total capital expenditure to first production is expected to be within the range of A$700M (US$530M) and A$800M, with funding to be supported from the company’s operating cash flows and facilities.

Delivery of gas to the NWS facilities will occur via the Dampier-Bunbury pipeline.

The pipeline connection to the Waitsia facilities is already in place, following its construction as part of the Waitsia Gas Project Stage 1 expansion, announced in July 2019.

The Waitsia partners have also entered into a DCA with the State of Western Australia, which includes the approval to export up to 7.5MT of LNG until the end of calendar year 2028.

That accord specifies domestic gas marketing obligation of 20 terajoules per day during the export period, which they are currently meeting through their existing gas sales from the Waitsia Gas Project Stage 1 facilities and the Xyris gas processing plant.

Other agreements signed by Beach and Mitsui include a Project Development Deed with the State of Western Australia, as well as accords with NWS LNG relating to gas processing, tie-ins, product allocation and cargo lifting and offtake.