While the Pluto and Browse LNG projects have dominated recent headlines, operator Woodside has also been busy expanding its North West Shelf infrastructure. Russell McCulley speaks to the company's North West Shelf executive vice president Kevin Gallagher in his Perth office about the ongoing efforts to add life to Australia's largest offshore oil & gas development.
Well into its sixth decade, Woodside is on a roll. The company-operated Pluto LNG project is gearing up for an August 2011 startup, with a planned 4.3mtpa production from the Carnarvon Basin. A plan is being readied for submission this year for regulatory approval of the Greater Sunrise FLNG project. And Woodside and its partners in the Browse LNG development are set to make a final investment decision, by mid-2012, to move ahead with the Browse Basin project.
Meanwhile, the Woodside-operated North West Shelf Venture, which began delivering natural gas to the domestic market in 1984 and to Japan in 1989, logged its best-ever year in 2010, including a one-day record of 797,000boe produced. Over the next few years, several North West Shelf projects under way will replace some aging equipment, add new enhanced recovery capabilities and ramp up Woodside's exploration efforts in the prolific area.
If 2011 promises to be ‘a big year for us', says Woodside's North West Shelf executive VP Kevin Gallagher, then 2012 is shaping up to be ‘a massive year. That's the next major project for the joint venture: keeping this run of projects going.'
The North West Shelf's infrastructure at present includes three fixed offshore platforms: North Rankin A, a 54,000t production platform in 125m water depths at the WA-1-L permit commissioned in 1984 (OE April 1985); Goodwyn A, a 1995 platform in 131m depths 23km southwest of North Rankin A that draws production from the Goodwyn, Echo and Yodel fields; and the unmanned Angel platform (OE June 2010), in 80m depths at WA-3-L, which has been in production since 2008. The project also includes the 1.15 million barrel-capacity Cossack Pioneer FPSO, commissioned in 1995 and installed in 80m water depths 34km east of North Rankin, along with the onshore Karratha Gas Plant with five LNG trains capable of producing some 16.3mtpa.
Woodside's partners in the North West Shelf development are BHP Billiton, BP, Chevron, Japan Australia LNG and Shell. Woodside acquired Shell's 16.67% interest in the project's oil business in 2008; last year, Shell announced plans to sell almost one-third of its 34% stake in Woodside, not long after media reports that the company would again attempt a takeover of Woodside (the Australian government quashed a 2001 bid).
The China National Offshore Oil Corporation also participates in the venture, but holds no interest in the North West Shelf infrastructure.
‘It's a very significant, iconic joint venture,' Gallagher says. And to keep it viable, the JV is investing nearly A$7 billion in redevelopment projects.
Major makeover
About A$5 billion will be used to fund the North Rankin redevelopment project, which includes a new gas compression platform, Rankin B, to be connected to the existing platform via a pair of 100m bridges, one for services and utilities and one for personnel to move between the structures. The North Rankin B platform will be used for enhanced gas recovery from the North Rankin and Perseus fields.
‘The project is designed to provide additional compression to North Rankin facilities, to access the reserves as the reservoir pressure declines,' Gallagher says. The jacket – at 24,000t, one of the largest ever constructed in Asia – is nearing completion at McDermott Indonesia's Batam Island yard and is scheduled for installation in 125m water depths before the end of 2011.
The topsides, under construction at Hyundai Heavy Industries' yard in Ulsan, South Korea, weigh in at around 23,000t and will include gas compression facilities, low pressure separators, utilities and accommodations for around 180. Installation, scheduled for early 2012, will involve one of the heaviest openwater floatovers ever conducted (see page 84).
Mustang, which is providing assessment and verification of readiness for the operation, said last year that the topsides would be transported to the North Rankin site on a 20m-high deck support frame and installed on top of the North Rankin B jacket at an elevation of 28m.
‘This is a megaproject, and we expect production to come onstream, or at least the facility to be fully commissioned and up and running in 2013,' Gallagher says. ‘This is one of the largest [floatover installations] in the southern hemisphere ever, and certainly one of the largest ever to be put right next door to an existing production platform. The people offshore will witness some amazing structures coming alongside and floated over and landed. The piles themselves are about 135m long,' he says.
‘In addition to the capital expenditure works, the amount of brownfield activity being carried out on an existing platform today – ongoing right now, to make ready for this – is extremely significant and challenging as well,' he says. The existing North Rankin platform will remain in production during the months leading up to the installation. ‘Making ready for these facilities to be tied down involves some very heavy structural activity, putting new members and bridge landing frames onto the site of the platform for the two bridges to be installed,' Gallagher says. ‘The work around that alone is massive. And then all the process tie-ins, all the utilities and hydrocarbon process systems that will tie in across the bridge when the new facilities are in place, getting all that lined up and in place to facilitate a smooth and quick and safe transition.'
Another A$1.8 billion has been dedicated to the North West Shelf Oil Redevelopment Project, also known as the Cossack Wanaea Lambert and Hermes redevelopment. Woodside is replacing the Cossack Pioneer with SBM's Okha FSO, which is being converted to an FPSO. ‘The project includes the replacement of much subsea infrastructure, which has been in place for more than 20 years,' Gallagher says. ‘Given the performance of this reservoir, and our expectation that it will be producing until around 2030, it's time to refurbish the kit and set ourselves up for the next 20 years,' he says. Technip is overseeing replacement of flowlines and riser couplings; SBM is managing the FPSO conversion, ‘but we will operate that ourselves when it comes down here, so that handover and commissioning process is ongoing today in Singapore,' he says.
‘We've got a very large production group presence in Singapore, and we've had them there some time now, to ensure that the handover goes as smoothly as possible.'
The Cossack, Wanaea, Lambert and Hermes fields, with 10 production wells, are currently producing about 36,000b/d, a rate the company expects to maintain or increase when the new FPSO goes into service toward the end of 2Q 2011, he says (gas from the fields is routed to the North Rankin A platform via an export pipeline). The projected startup date is ‘a moving target', Gallagher says. ‘We're not going to rush this thing with the shipyard. We're lucky in that we've been able to defer the shutdown of the existing FPSO until we're confident that we know when the new FPSO will be leaving.'
Woodside expects the field to be shut in for 110 days during the transition from the Cossack Pioneer to the Okha FPSO. ‘We're maintaining our shutdown duration at 110 days, and our contractors are helping us there,' he says. ‘It's been a real integrated, collaborative effort between Woodside and our contractors.'
Also this year, Woodside is preparing to move into FEED for the first phase of the Greater Western Flank development, to the southwest of the Goodwyn A platform. Greater Western Flank comprises 14 fields estimated to hold some 3tcf recoverable gas and 100mmb of condensate. In 2009, the Tidepole-2 appraisal well in licence WA-5-L confirmed hydrocarbons in the Dampier Sub-basin.
‘It's ironic, when you look at the megaprojects we've developed over the years – the mega-reservoirs that were developed over the years at the North West Shelf – that we would think of Greater Western Flank as not as good as those big reservoirs,' Gallagher says. ‘But when you look at other parts of the world, you'd be very excited about developing 14 reservoirs tying back to your existing infrastructure and that are going to produce about 3tcf of gas and 100mmb of condensate. So Greater Western Flank is a very exciting project for us. We're currently progressing towards our FEED decision on that project, and hopefully will make a final investment decision in late 2011.'
Later this year, the North West Shelf will implement a one- or two-well drilling sequence targeting exploration opportunities close to existing infrastructure. ‘We're working at our portfolio,' says Gallagher. ‘We're looking for new opportunities. And we have opportunities on the shelf. We're going to work those up, through the technical reviews, work with our partners to progress those, and hopefully over the next few years we'll continue to have exploration activity supporting our longer-term operations.
'Seeking skills
Gallagher is bullish on LNG demand. ‘Every scenario we look at shows a tremendous growth in demand for energy over the long term,' he says. ‘Now I'm sure there will be peaks and troughs in that, but in the long term, we're very confident demand will increase. And LNG will be part of the energy mix. If you look at the environmental benefits versus coal, for example, they're very significant.'
In the shorter term, Woodside and other operators in Western Australia's LNG hunt could face a shortage of skilled workers needed to build and staff several major projects over the next few years, including Chevron's Gorgon and Wheatstone developments and Shell's Prelude project. Recruitment is ‘the major challenge for all of us, with all these projects on the books, and those that are pre-final investment decision,' he says. ‘In our estimation, it will take some 36,000 additional workers to construct and operate all of these projects over the next decade. That's a phenomenal amount of workers that we currently don't have available.
‘What that will mean, we'll have to wait and see,' Gallagher continues. The company could relocate workers from ‘over east', he says, meaning the mining and oil & gas-producing regions of Queensland, New South Wales and Victoria. ‘But over east has huge projects of their own, with the coal seam methane LNG projects.'
Woodside, he says, is ‘investing very heavily in staff development'. In 2010, the company invested A$20 million in education and development, including an integrated program for new operators and technical staff administered through the company's production division.
‘That's with a view of increasing the skills that we have today,' Gallagher says. ‘And also preparing for the future.' OE