Apache and Santos look set to have secured a potential gas...

Apache and Santos look set to have secured a potential gas supply to extend the life of their Devil Creek gas plant south of Karratha following confirmation that the Bianchi well had made a big discovery.

Although none of the partners are yet to discuss publicly the potential development options for gas found in retention lease WA-49-R in the Carnarvon Basin, the success of the Bianchi-1 well - where wireline logging and pressure testing confirmed 112m of net gas pay - suggests that the permit could contain at least two trillion cubic feet of gas.

Bianchi was drilled by permit operator Apache as an appraisal of the 2011 gas discovery Zola, which intercepted more than 100m of net gas pay. Zola is 6km south-west of Bianchi.

Connecting Bianchi and Zola to the Devil Creek domestic gas plant is one of the options likely to be considered, although the retention lease is also close to the trunkline being constructed for the Chevron-led Wheatstone LNG plant, south of Onslow. Apache is a partner in the two-train Wheatstone foundation development as well as operator of Devil Creek, in which Santos is the other investor.

The WA-49-R lease is held by Apache (30.3 per cent), Santos (24.8 per cent), OMV (20 per cent), JX Nippon (15 per cent) and Tap Oil (10 per cent).

Tap had flagged the Bianchi discovery just over a fortnight ago in an attempt to gain some sharemarket traction. It is also keen to sell its stake in the lease, as well as that in another Carnarvon Basin permit, WA-351-P, that contains the Tallaganda gas find.

Confirmation by Apache yesterday of Bianchi's size helped send Tap's shares up 6 per cent to 53¢. Santos eased 9¢ to $13.85.

Highlighting the significance of the Bianchi discovery even for a company the size of Apache, the US group's Australia boss, Faron Thibodeaux, described the well as "important (by) providing further understanding of the development options with the greater Zola area".
The lease partners are expected to drill another well next year.

- Peter Klinger, The West Australian July 17, 2013, 7:36 am