Arrow on target at Kogan North

CONSTRUCTION of the A$25 million Kogan North CBM development in the Surat Basin is moving ahead within budget, operator Arrow Energy said yesterday.
Arrow on target at Kogan North Arrow on target at Kogan North Arrow on target at Kogan North Arrow on target at Kogan North Arrow on target at Kogan North

Installation of the Central Gas Processing Facility (CGPF), to be operated by Australian Pipeline Trust, is nearly complete and has entered the pre-commissioning phase, Arrow said.

After this, the CGPF will move into the full commissioning phase once field gas rates exceed 3 million cubic feet per day - the rate required for the compressor commissioning, the company said.

Layout and construction of the compressors, dehydration unit and metering skid are also complete, as well as work at the evaporation dam.

One further well is planned in addition to 31 other drilled and completed wells, Arrow said. Nine of these are on pump, with each producing about 3000 barrels of water per day.

As the overall water level of the field is drawn down, gas flow has started and is in the early stages of ramping up, Arrow said.

In addition, most of the surface gas gathering pipeline network has been commissioned and the lateral pipeline connecting the field to the Roma-to-Brisbane gas pipeline has been constructed and the ‘hot tap’ connection completed.

The Arrow Energy and CS Energy joint venture each hold a 50% interest in the project. Arrow will pay about $2.5 million or 10% of the project.

Development of this 31-well project will supply 4PJ of gas per annum for 15 years to CS Energy’s Swanbank ‘E’ power plant, in south-east Queensland, via the Roma-to-Brisbane Pipeline.

At the Tipton West project in nearby PL 198, two new wells have been drilled, completed and put on-stream from the Tipton North mini-pilot, Arrow said. The third will be put on pump in the next two days, weather permitting.

Three wells drilled at the Tipton South mini-pilot have also been completed.

But bad weather has delayed moving a workover rig into the area to run pumps in the wells and complete the dam construction, the company said.

Arrow currently holds 100% interest in Tipton West but will farm out 40% to Beach Petroleum, which will fund $35 million of the upstream development costs.

Financial closure for the project is scheduled for later this year with first gas sales expected about 12 months later.

A recent reserves certification at the project resulted in 1P reserves of 25 PJ, 2P of 124 PJ and 3P of 2028PJ.

The field currently has gas sales agreements with the Braemar Power Project for up to 13.3 PJ per year for 15 years and with Ergon Energy for 3.9 PJ pa for 15 years. In addition, Arrow also has a memorandum of understanding with BP for 15 PJ over 5 years.

Meanwhile, Arrow has announced that Daandine-3 production test well in ATP 790/PLA 230 has been completed and put on stream. It is pumping 1600 barrels of water per day and producing over 100,000 cubic feet of gas per day. Arrow holds a 100% stake in the project.

The company has lodged an application for a petroleum lease (PLA 230) over a portion of ATP 790P to progress the project, it said.

The company said it was also in advanced stages of planning for a power generation project to be fuelled by gas from the tenement.

In ATP 676, Arrow has started drilling three wells at its wholly owned Dundee production pilot, with Dundee-3 currently being logged after reaching total depth. A dam has been constructed in preparation for flow from the three production wells.

Meanwhile in ATP 641P, desorption tests are underway on a core hole retrieved from Silverdale-1 and in ATP 644P, the company is doing additional technical work to review stimulation options for the coals found at Mt Lindesay-4.