OPERATIONS

Santos to spend big on CCS drilling after two offshore permit awards 

SANTOS and Woodside Energy Group have been awarded the three remaining carbon capture and storage permits offered in last year's bidding round after the first two went to Inpex and Woodside two weeks ago. 

Santos to spend big on CCS drilling after two offshore permit awards 

Both have been betting big on offshore CCS as a way to reach net-zero and Woodside CEO Meg O'Neill said this week that any development at Browse gas fields, which have an average content of 10% CO2, would need CCS from start up. Woodside's first permit is over its Browse field.
 
Santos meanwhile is preparing to take a final investment decision at its vast Bayu Undan gas field, using the depleted reservoirs after the field shuts down to store up to 10 million tonnes of carbon per annum. This award does not cover that project, which is largely in Timor-Leste waters. 
 
Only Kevin Gallagher's Santos is willing to put serious money and man hours where his mouth is however, with three wells to be drilled over the six year terms of its two permits for a combined, all-in work program cost of around $200 million. 
 
Neither of the permits Woodside holds as operator have a drilling commitment. 
 
Woodside also partners with Inpex, and Total, at the field by Ichthys, which does have a well commitment and a total work program cost of $153 million. 
 
Woodside, which today announced the North West Shelf partners would use the Angel field as a potential 5 million tonne per annum store. While the lack of commitment well as part of the work program might make sense at Angel given the partners' working understanding of the reservoir after years of drilling and production, some might be left scratching their heads at the lack of a well at Browse before 2028. 
 
"This is an assessment permit: we are assessing technical and non-technical feasibility of a Browse Carbon Capture and Storage concept," a spokesperson told Energy News. 
 
"Woodside has extensive data sets covering the relevant area, and the proposed Browse drilling sequence could be structured to provide further data, as required." 
 
Browse is still being mulled as backfill for the NWS but no sanction date has been set after it was pulled more than two years ago. Without adequate, large-scale backfill at least one train will have to shut by 2024. 
 
The North West Shelf joint venture partners BP, Shell, Chevron and Japan LNG join Woodside at G10-AP, which sits over the shut in Angel field. At last year's annual general meeting departing CEO Peter Coleman first floated Angel as a potential CCS store. 
 
The total cost to the five partners who share the permit equally is just $19 million. 
 
Woodside first formed a CCS joint venture last November with BP and Japan LNG.
 
It said then it would study offshore reservoirs, depleting and still producing, in the Carnarvon Basin, for what Woodside calls a "large-scale, multi-user project". 
 
The idea will be to take carbon from multiple industries around the Burrup Peninsula; it will be Australia's first multi-user project according to Woodside then. 
 
Former CEO Peter Coleman said at last year's annual general meeting the Angel gas and condensate project, which shut down in 2020, was a leading CCS candidate. 
 
The field is inshore from the original NWS North Rankin and Goodwyn fields and 115 kilometres off the coast of Western Australia in shallow 80 metre deep water in permit WA-3-L. 
 
"Reservoir quality is key," he said. There must also be proximate to sources of carbon, which is why he suggested a radius of no more than 160km from Karratha. Browse is some 900km from Karratha, but was not being considered for CCS at the time. 
 
Santos' permits G-9-AP is shared with Chevron and G-11-AP with Chevron and PRISM Darwin Pipeline, which was only registered in November. 
 
G-11-AP is in the Bonaparte Basin. 
 
Chevron also operates the only large scale CCS project in Australia on Barrow Island at its Gorgon LNG project in Western Australia. 
 
Santos must drill two exploration wells across the six year term and conduct numerous studies for a total cost of $126,666,665 at G-11-AP. 
 
G-9-AP is in the North Carnarvon Basin. One well is due in the second term of its six-year lease. Well costs are estimated at $53 million and seismic reprocessing and additional acquisition $11.2 million for a total of $73.6 million. 
 
At the beginning of July the federal government called on industry to get cracking on area nominations for the 2022 Offshore Greenhouse Gas Storage Release, which closed at the end of that month.  
 
"The release supports Australia's resources sector by enabling carbon capture and storage in Australian Commonwealth waters," the Department of Industry, Science and Resources said.
 
 
 
 
 
 
 
 
 
 
 
 
 

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