All-systems-go for drilling ops at giant gas project off Australia

Australian energy player Santos has received a stamp of approval from the country’s offshore regulator for an environment plan (EP), covering development drilling activities at the Barossa gas field off the coast of Australia.

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) accepted Sntos’ environment plan on December 15, 2023, for the Barossa development drilling and well completions campaign within Commonwealth petroleum production license NT/L1 in 2023. This is an approved offshore natural gas and condensate development proposed to backfill the gas supply to the existing Darwin LNG (DLNG) facility at Wickham Point.

The natural gas would be extracted from the Barossa field in Commonwealth waters approximately 285 kilometers offshore north-northwest from Darwin, and transported via gas export pipeline (GEP) and Darwin Pipeline Duplication (DPD) to the existing DLNG facility. Santos NA Barossa Pty Ltd, is the operator, on behalf of co-venturers: SK E&S Australia Pty Ltd, JERA Barossa Pty Ltd, and Santos Offshore Pty Ltd.

The FID for the project was taken in 2021, kick-starting the $600 million investment in the Darwin LNG life extension and pipeline tie-in projects to extend the facility life for around 20 years. The Barossa field development entails an FPSO vessel, subsea production wells, supporting subsea infrastructure, and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline. The first gas production is targeted for the first half of 2025.

As part of the approved development, Santos is planning to start the development drilling and well completion campaign. The planned duration for drilling and completion of each well is estimated to take approximately 90 days of continuous well operations – 24 hours per day, seven days per week – and the total duration for the planned drilling campaign is estimated to be around two years. The water depths in the area range from around 204 m to 376 m. The operational area is approximately 33 km from the Oceanic Shoals Australian Marine Park.

Furthermore, six subsea production wells are planned to be drilled and completed around the future locations of three subsea production manifolds, with two wellheads adjacent to each manifold. If required, up to two contingency production wells could be drilled and completed at any manifold, which means eight wells in total. This EP provides for drilling and completing the wells using a semi-submersible mobile offshore drilling unit (MODU) and light well intervention vessel, along with the ongoing management of the complete wells until the future commissioning and production phases.

The activities included in the Barossa development drilling and completions environment plan cover movement of the MODU within the operational area, including entry and exit; MODU and vessel commissioning and demobilizing activities; deployment and recovery of the MODU anchors and mooring lines; and deployment, operation, and eventual removal of a temporary acoustic survey positioning system.

In addition, there are also drilling operations, including temporary well suspension and subsequent re-entry as required; well completions, including perforating and well flowback; installation of Christmas trees; contingency activities such as side-track drilling, re-drilling sections, re-spud, and abandonment; well intervention; ongoing well inspection, maintenance and management; and general operations associated with the use of a MODU, vessels, helicopters and remotely operated vehicles (ROVs).

Santos explains that the petroleum safety zone will extend in a 500-meter radius around the MODU surface location at each drill center and the completed subsea well location. During drilling activities, a cautionary zone will be placed around the MODU and anchors which may extend up to 2.5 km from the MODU. This environment plan will remain valid for five years from the acceptance date.

The Federal Court of Australia granted an interim injunction on November 2, 2023, to prevent Santos from starting to lay the Barossa gas export pipeline (GEP) until November 13, 2023, due to an application made by Simon Munkara, seeking an order to make the Australian energy giant revise and resubmit the environment plan (EP) that was accepted by the regulator, NOPSEMA, in March 2020.

Based on the Federal Court of Australia’s most recent ruling, pipelay activities were cleared to begin on an 86 km section of pipeline for the Barossa GEP. In line with this ruling, Santos confirmed that no activity would occur south of kilometer point 86 (KP86).

In response to the Federal Court’s decision regarding the Barossa project, Australian Energy Producers underlined that the latest court decision was further evidence of “the urgent need” for the Australian government to provide certainty for businesses and fix the broken offshore regulatory approvals system, as the economic and energy security of the country and its international partners were being damaged.

Santos is currently engaged in preliminary discussions with Woodside for a potential A$79.09 billion (about $52.19 billion) merger between these two Australian energy giants. If the two heavyweights come together, it is anticipated that the merger will unlock more growth opportunities and create an Australian gas market giant.