ES now truely stranded

The following is taken from Upstreamonline. Caldita-Barossa result means that if Darwin lng feedstock option then Es could be stranded for 50 plus years assuming they work out how to address 30% co2...

Meo talks next month with Es Jv partners and shell selling its 32.5% stake - what is needed is for the midstream investor to buy shell's stake

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By RUSSELL SEARANCKE Melbourne

22 May 2015 00:00 GMT

Plans for development off northern Australia gain momentum after successful appraisal results give ConocoPhillips ‘attractive options’ for Darwin backfill
CONOCOPHILLIPS has enlisted a major engineering house to help further the design of the Caldita-Barossa gas project off northern Australia, which is earmarked as a liquefied natural gas feedstock source.

The project has gained momentum this year following a successful three-well appraisal drilling campaign, which confirmed a much larger and better quality resource than originally anticipated.

Conceptual work was previously done in-house and the engineering work has stepped up a notch with the award of a pre-front end engineering and design package to Australian contractor WorleyParsons, said sources. It is understood the work being done by WorleyParsons covers all aspects — both surface and subsea — of the potential development.

It is still early days for Caldita-Barossa, but sources said the drilling results had given the joint venture great encouragement.

Caldita-Barossa is likely to contain multiple trillion cubic feet of gas.

The field development will almost certainly be a tie back to ConocoPhillips’ Darwin LNG plant.

While the basecase development concept has not been disclosed, it will require a substantial subsea pipeline of about 270 kilometres to Darwin.

Water depths at the field location are between 200 metres and 320 metres.

ConocoPhillips has for years been looking for new gas volumes to underpin either backfill for its existing LNG train at Darwin or an expansion train, or both.

Caldita-Barossa is one feedstock option, as is the Poseidon field about 1000 kilometres away from Darwin in the Browse basin.

Ellen DeSanctis, the company’s vice president for investor relations and communications, said recently that ConocoPhillips was “particularly pleased with the appraisal results that we finished up with earlier this year at Barossa”.

“We now can see that we have attractive options to backfill our Darwin plant and potentially to put into an expansion train there at attractive returns now that we have this appraisal we’ve completed.”

Chief executive Ryan Lance added: “When you look at our (LNG) portfolio, trying to figure out our backfill option behind Darwin, we believe that’s going to compete on a cost of supply basis.”

However, a company spokesperson in Australia told Upstream that it was “speculative” to suggest that an expansion of Darwin LNG would happen “given the changing global economic conditions”.

“If backfill becomes the most competitive development option, the timing will be dictated by the availability of Darwin LNG capacity, which is fully contracted to Tokyo Electric and Tokyo Gas until 2022,” said the spokesperson.

The three-well programme was completed on 26 March 2015 using the semi-submersible drilling rig Nanhai VI in Block NT/RL5, which was previously NT/P69.

The Barossa-2 well was drilled in the core of the field and hit 88 metres of net pay across a 217-metre gross interval.

The Barossa-3 well appraised potential upside to the north and hit 104 metres of net pay across a 152-metre interval.

Data has not yet been released for the Barossa-4 well, but co-venturer Santos has said the well was a success. The Barossa field was discovered in 2007, and was already a big resource prior to the three appraisal wells. Like many of the gas fields in the Bonaparte basin, it has a high carbon dioxide content, in this case up to 16%.

The Caldita-1 discovery well was drilled in 2005, followed by the Caldita-2 well in 2007, in the same permit.

The Caldita-Barossa joint venture comprises operator ConocoPhillips on 37.5%, SK Energy on 37.5% and Santos on 25%.