Sole, the previously stranded natural gas field in eastern Bass Strait, has entered into the front-end engineering and design stage and its owners are working towards making a final investment decision on development timed for third-quarter 2016.
Adelaide-based Cooper Energy Ltd. agreed last December to buy from Santos 50% of Sole in retention lease Vic/RL3 and 50% of the Orbost gas plant originally built to process gas from nearby Patricia and Baleen fields (OGJ Online, Dec. 17, 2014).
Santos remains operator and the 50-50 joint venture is now working on the detailed analysis, design, and costing needed to make the decision about Sole’s commercial viability.
David Maxwell, Cooper’s managing director, believes that gas prices and field development costs are “trending favourably” for economic development of the field.
Maxwell says the conventional gas field is near existing infrastructure and is competitive as a source of gas for eastern Australia. Gas market offtake contracts and finance for the project construction are being developed in parallel with the FEED stage.
Sole is expected to supply 25 petajoules/year of gas over 8 years from a projected on-stream date of 2018.
Gas would be transported via subsea pipeline to the Orbost plant (also operated by Santos) and then linked into the eastern Australian pipeline grid.
FEED is budgeted at $27 million (Aus.) and will be funded 100% by Cooper as part of its commitment to outlay the first $50 million of project costs.
Sole was found by Shell in 1972 when the discovery well intersected 16 m of net gas pay on the flank of the simple four-way dip structure in the Palaeocene-age Kingfish formation.
Shell said the field was too small for commercial development at that time and no further work was done until Santos picked up the area, drilling Sole-2 in 2002 near the crest of the structure. This well intersected 68 m of net gas pay and flowed dry gas on test at 20.6 MMcfd.
The development plan is aiming for a plateau production rate of 68 MMcfd of gas.
The gas is very dry with just 1 bbl of condensate per 1 Mcf of gas, but there is a 0.15% hydrogen sulphide content that will need to be removed. The 1% carbon dioxide content will be left in the processed gas.
The field has an estimated reserve of about 250 bcf of gas.