‘Small defect’ identified after Australian FPSO shutdown following gas alarm

Singapore-headquartered oil and gas company Jadestone Energy has found the location of – what it describes as – a small defect after it temporarily shut in production from a floating production storage and offloading (FPSO) vessel operating at a field in the Timor Sea offshore Australia.

A gas alarm was triggered on 29 July 2023 within ballast water tank 4S on the FPSO Montara Venture, indicating possible communication with one of the adjacent tanks within the FPSO. As a result, production from the Montara fields was temporarily interrupted.

In an update on Thursday, 10 August 2023, Jadestone Energy explained that tank 4S was emptied and cleaned, with an inspection starting on 8 August 2023.  According to the company, the initial inspection has identified the location of “a small defect” between tank 4S and oil cargo tank 5C, which poses “no safety or structural risk, nor any risk of a hydrocarbon leak to sea.”

Bearing this in mind, the firm is now focused on activities to address the defect in tank 4S, such as final inspections in ballast water tank 4P prior to returning this tank to service as part of the overall ballast and stability requirements for the FPSO; offloading crude oil from tank 5C to allow for cleaning and access to permit an inspection; and re-entry to 4S to finalise the inspection of the tank and carry out the necessary repair.

Furthermore, Jadestone underlines that it continues to keep key stakeholders, including the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) and its reserve-based lending (RBL) facility banks, regularly updated on these activities. The RBL includes the requirement for borrowing base assets, such as Montara, not to have production interrupted for a continuous period of 60 days or more. The firm will also be working with the RBL banks to assess how the shut-in might impact the clauses and covenant under the RBL facility.

This is not the first time that the production at the field was shut in. Previously, a small oil leak from a crude oil tank on the FPSO Montara Venture led to the shutdown of production from the Montara field in July 2022. After an interim repair of the leak point in the 2C tank, Jadestone restarted production from the field while a permanent repair was being advanced.  

However, the company decided to shut in production from Montara once again, after an additional internal defect in the water ballast 4S tank was detected in August 2022 during preparations for the permanent repair of the 2C tank. The production from the FPSO Montara Venture was restarted in late March 2023.

The Jadestone-operated and owned Montara project, encompassing three separate fields – Montara, Skua and Swift/Swallow – is located in the Timor Sea offshore Australia approximately 690 kilometres west of Darwin.