Beach Energy still on track for first gas from one of its major growth projects

Australian oil and gas company Beach Energy is one approval shy of completing all connection activities for four wells, which are part of the Otway Basin development offshore Australia. However, the firm highlighted that it remains on schedule to wrap this up and achieve first gas by mid-2023.

At the start of 2022, Beach Energy confirmed that the first two wells of its offshore Otway Basin campaign – Geographe 4 and 5 – had been connected to the Otway Gas Plant and started delivering gas into the East Coast market, following the completion of the commissioning phase.

Come July 2022, the Australian player completed the seven-well offshore drilling campaign, which was described as the largest in the basin’s history. In addition to gas discovery at the Artisan field, it delivered six successful development wells in the Geographe and Thylacine fields.

The Otway Basin is approximately 500 km long from Cape Jaffa in South Australia to northwest Tasmania, covering both onshore and offshore. Using Diamond Offshore’s Ocean Onyx semi-submersible rig, the drilling started in February 2021 and concluded with the final well of the campaign, Thylacine North 2, which was completed in July 2022.

In an update on Tuesday, 31 January 2023, Beach Energy reported that the offshore Otway development connection activities continued for the four recently drilled offshore Thylacine development wells. Activities during the fourth quarter of 2022 included the departure of the Scandi Acergy subsea installation vessel from the UK in December 2022, with arrival in Australia expected in February 2023.

The company says that the delivery of all major procurement items, including umbilicals, connecting pipes and spools, and hydraulic and electrical flying leads has been completed along with all diving construction and engineering activities.

In addition, the company underscored that substantial progress was made on required modifications to the Thylacine platform. Therefore, the connection of the Thylacine wells is on schedule and awaiting approval of the Thylacine Installation and Commissioning Environment Plan. Beach claims that this final approval will allow for all outstanding connection activities to be completed.

Connection of the four Thylacine development wells by mid-2023 is expected to enable the Otway Gas Plant to produce at full nameplate capacity of 205 TJ/day while this gas will be sold into existing contracts. Beach believes that this increase in production is coming when a new gas supply for the East Coast market is desperately needed. The pipeline connections and tie-in of the Thylacine wells are expected to begin in 2Q 2023 post the winter period. All wells are expected online by mid-2023.

Morné Engelbrecht, Beach Energy’s Chief Executive Officer, remarked: “Beach is navigating a challenging period while we work hard to deliver our major growth projects in the Otway and Perth basins… We are preparing to connect four offshore Otway Basin wells which remain on target to deliver first gas by mid-2023, subject to regulatory approvals. Once this work is complete, it will allow for up to 100 terajoules per day of additional gas supply to be made available for the East Coast market.”

In addition to connecting the four Thylacine wells, Beach is progressing with the connection of the Enterprise discovery to the Otway Gas Plant. Due to severe wet weather and having regard for land access negotiations, the Australian player is now targeting Enterprise coming online in mid-2024, subject to receipt of these approvals. The Enterprise discovery was drilled from an onshore well pad in H1 2021 and resulted in a 2P gas and associated liquids reserves booking of 34 MMboe gross (20 MMboe net to Beach), including 2P gas reserves of 161 PJ (gross).

According to Beach Energy, a planned shutdown of the Otway Gas Plant is scheduled for 3Q 2023 and routine turbine maintenance and further tie-in activity for the Thylacine and Enterprise wells will be undertaken during the ten-day shutdown in March.

Previously, the Australian firm said that the activities for the further development of the Kupe offshore natural gas reserves within the existing Petroleum Mining Licence (PML 38146) through Phase 2 were expected to start in late 2022 to early 2023.

However, after Beach Energy lodged consent applications with the Environmental Protection Authority (EPA) related to offshore drilling in Taranaki, Climate Justice Taranaki members set the wheels into motion for these consents to be declined. The development drilling for Phase 2 entails up to two new wells at the existing Kupe wellhead platform, some 30 km off Manaia in South Taranaki

Located along the west coast of the North Island in New Zealand, the Taranaki Basin covers about 115,000 square kilometres with most of the area being offshore. Beach Energy acts as the operator of the Kupe natural gas processing plant which produces gas from the Kupe field, situated approximately 30 kilometres off the New Zealand North Island.

At peak, the gas produced from the Kupe field was predicted to meet about 15 per cent of New Zealand’s annual natural gas demand and 50 per cent of New Zealand’s LPG demand. Beach’s Kupe project consists of three production wells up to 3.8 kilometres in depth and the Kupe unmanned offshore platform.

Beach Energy underlined in its recent update that subsurface analysis, planning and regulatory activities continued during the fourth quarter of 2022 for the drilling of the Kupe South 9 development well.

The spudding of this well is now targeted in 2Q 2024, subject to the joint venture and regulatory approvals and rig access. The company claims that this well has the potential to return the Kupe Gas Plant to capacity gas processing rates of around 77 TJ/day.