Jadestone nearly ready for Montara restart

Following an inspection and maintenance shutdown, Jadestone Energy is almost ready to restart production at its Montara oil project offshore Australia later this month despite extended shutdown timeline. 

Jadestone bought the Montara project stake from Thailand’s PTTEP last July and completed the deal in September. During this transition period, PTTEP remains the operator of Montara.

After identifying a backlog of maintenance and inspection activities, Jadestone shut down production at Montara at the beginning of November.

As announced on November 15, 2018, following the decision to shut in the Montara asset in order to correct an extensive backlog of inspection and maintenance routines, the operating team has made progress in completing over 8,000 hours of work offshore.

Jadestone said on Tuesday, December 11 that work had progressed to a detailed plan, which included dealing with a small number of improvement notices issued by NOPSEMA, the offshore regulator, as well as inspections throughout all parts of the facilities. As a result, no further integrity concerns, or safety-critical exceptions, have been identified.

All activities associated with the oil system are now fully complete, and the facility is ready for the restart of oil production, subject to an independent audit currently under way, and regulator support. The company expects production to restart later this month.

Work on the gas system is progressing, independent of the oil system, and is now approximately 85% complete and expected to be finished in the near future.

In addition, the maintenance management system (MMS), which was identified as inadequate to reliably guide the asset’s ongoing maintenance regimen, has had to be partially re-built, tested and audited internally for compliance. The safety management system has also been reviewed with extensive updates to the assurance plan, and all maintenance routines and inspection records have now been correctly incorporated into the two systems.

Jadestone has also completed the secondment of a number of key operational leaders, both onshore and offshore, and is now well positioned to advance a seamless transition over the next few months while the Jadestone safety case and environment plan are under review, prior to acceptance by NOPSEMA.

Subsea control umbilical replacement

Thereafter, all inspection and maintenance work will be complete, with the exception of one activity – the long-planned replacement of the subsea control umbilical – which is now due to be delivered early in the new year, and installed shortly thereafter.

The company anticipates that the facility will be able to operate reliably and without the need for a planned major maintenance shutdown until at least the second half of 2020.

Paul Blakeley, President and CEO, commented: “Whilst we were aware, through the due diligence process, of the opportunity to improve operating performance at the Montara asset, and had factored this into our analysis, integrity flaws in the incumbent operator’s MMS made it impossible to identify the full extent of the inspection backlog, and couldn’t provide clear information on inspection status, or the ability to plan future maintenance tasks.”

Extended shutdown timeline 

Blakeley continued: “In the course of working with the operator during the transition phase, since closing the acquisition at the end of September, this became more fully apparent, and led to the identification of a number of incidents of non-compliance with the approved safety case. Having opted to shut down the facility and remedy the broad maintenance and inspection backlog, we have also corrected the MMS itself. While this work scope has resulted in a protracted shutdown timeline, it was a prudent operational decision and one that will significantly reduce ongoing work effort, uncertainty and inefficiency. The asset is now up to date with regards to inspection and major maintenance.

“The extensive scope of inspection work we have undertaken has confirmed our view that the Montara facility is in excellent condition. After having completed over 800 assurance tasks, we see nothing that changes our view of the exceptional value we have attributed to the Montara asset.

“This shutdown will more rapidly embed Jadestone’s proven operating philosophy and safety culture, and when Jadestone assumes operatorship, we will now inherit a high reliability facility that we can operate safely and with confidence. Whilst unplanned outages can always occur, the work undertaken in this shutdown is expected to materially improve uptime performance in the years ahead.”

The Montara project is located in Production Licenses AC/L7 and AC/L8 in the Timor Sea, approximately 690 kilometers west of Darwin, 630 kilometers north of Broome and 250 kilometers north-west from the Kimberley coastline of Western Australia in water depth of 77 meters.