Sydney, 31 July (Argus) — ConocoPhillips plans to start drilling at its Barossa gas field offshore northern Australia next year to feed existing or new LNG projects.
The three-well appraisal programme will take around a year to complete and is subject to government approvals, according to environmental approval documents filed with the Australian government. The wells will be funded by South Korean conglomerate SK Group, which pledged in June to pay up to $520mn for a stake of up to 49pc of the adjacent Barossa and Caldita fields in the Bonaparte basin and part of the Timor Sea, offshore Northern Territory. Caldita and Barossa have combined estimated reserves of 5.6 trillion ft³ (156.8bn m³).
Gas from the fields will be used for either to feed a floating LNG (FLNG) project or as a tie-back to the existing 3.6mn t/yr Darwin LNG export venture that ConocoPhillips operates. The additional gas could underpin a second train at Darwin or serve as backfill for the Bayu-Undan field, the main source of gas for Darwin LNG.
SK took an initial 37.5pc stake in the fields in return for funding the $260mn Barossa appraisal programme. ConocoPhillips' 60pc stake fell to 37.5pc and Australian independent Santos' 40pc interest slipped to 25pc. SK will have the option to increase its interest to 49.5pc for a further $60mn payment on completion of the appraisal programme.
The South Korean firm will then fund a further $90mn for its contribution to engineering and design work on a possible FLNG project, which is expected to start in 2014. SK will also make a final investment decision (FID) and first LNG cargo payments of up to $110mn to Santos and ConocoPhillips.
Santos is planning another LNG project in the Bonaparte basin through the proposed 2mn t/yr Bonaparte FLNG venture, where it holds 40pc and French utility GDF Suez owns the rest and is the project operator. The Bonaparte FLNG venture owners plan to make FID on the project in 2014.
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