Woodside confirmed this afternoon that the final concept screening by the partners had selected a fixed well head platform which will be tied back into Shell's proposed floating liquefaction plant.
A range of scenarios had been put forward to date, with Shell's controversial floating LNG proposal - with a total subsea completion configuration - edging forward due to the mooted lower capital costs chiefly due to the the lack of an onshore pipeline.
The base case design is the rudimentary field development scenario from which design variations and engineering modifications are developed. It is understood that the new base case involves lifting the subsea production assets (wellheads, Christmas trees etc) to a fixed a fixed platform, which would then export the hydrocarbons to the floating processing and liquefaction barge, which remains an essential part of the development.
What isn't yet determined is the price at which the Sunrise upstream partners will sell their gas to the Shell controlled LNG barge. When first proposed, Shell were insistent on 100% ownership of the barge, but a Woodside spokesman said Shell were now prepared to farm down to 51% to see the project get over the line.
One of the sticking points for the balance of upstream partners - Woodside, Phillips, Osaka Gas - was they would not gain from the value adding gained from refining the stranded gas reserves.
The Woodside spokesman said they and Shell had already agreed upon commercial terms and were now trying to involve Phillips and Osaka Gas.
"The issues are: agreeing on the value sharing between the partners; and where the destination of the end LNG product."
Informed sources said that operating committee meeting for the project team scheduled for Wednesday- usually taking a matter of hours - was not concluded by the and of the day and reconvened yesterday to continue to thrash out issues.
One of the resolutions to come out of that meeting was the reintroduction of the fixed facility element to the project.
"The fixed wellhead is aimed at maximising control and maintenance of the drilling activities," said the spokesman.
Another issue facing the project team was that the interim budget for the project team is due to expire on Sunday, hence a resolution to some of the issues being faced by the partners need to be reached urgently. The spokesman said he expected funding would be extended.
"We have spent A$500 million in the last two years on the project. The next major funding decision is mid year, when the partners need to confirm the scope of the detailed engineering." The total cost of both the floating and fixed facilities are estimated at A$5.1 billion.
It is said that the return of the fixed platform into serious consideration represents a frustrating return - for the project team - to a proposal which they had rubbed out months ago when operator Woodside embraced Shell's lower cost floating solution.
The bigger picture is that a floating development for Sunrise leaves no option or infrastructure for other gas reserves in the region to be tied into and therefore achieve far lower capital costs.
Some form of fixed facility will at least leave the door open for possible co-development with other stakeholders in the region.
Phillips, Shell and Northern Territory government representatives were all unavailable for comment at press time.
