With public input period up and running, more gas drilling on the cards for Australia

March 19, 2024, by Melisa Čavčić

Beach Energy (Operations) Limited, a subsidiary of Australia’s oil and gas player Beach Energy, has submitted a proposal for a natural gas project off the coast of Australia, which is now open for public consultation. The primary motivation behind this project is the development of gas reserves for use in the east coast domestic gas market.

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has confirmed that Beach Energy’s Otway Offshore Gas Victoria project proposal is open for nine weeks of public consultation. This comes after Australia’s offshore regulator put the project proposal in the pile with those that meet the regulatory requirements to be published for public comment.

All interested stakeholders are encouraged to provide comments on the proposal by May 20, 2024. However, NOPSEMA has not yet considered the acceptability of the project and its associated environmental impacts, thus, this will happen only once the consultation is closed and Beach has considered and addressed issues raised by the public.

Before any activities begin further regulatory approvals will be required – including environment plans, safety cases, and well operation management plans – if the proposal meets all of the regulatory requirements and is accepted by the regulator. The Australian player plans to start the initial drilling campaign in 2025 with an operational life of up to 30 years if all required approvals are secured.

Located approximately 20 km south of the Victorian mainland and 40 km west of Tasmania (King Island) at its closest points, the Otway Offshore Gas Victoria project will be undertaken through integrated subsea drilling and installation campaigns to develop reserves and potential resources adjacent to existing Beach Energy permits and infrastructure.

Based on the draft proposal plan, this is a staged subsea development starting with an initial drilling campaign conducted by a semi-submersible drilling rig. Wells that yield hydrocarbons will be tied back to the existing Otway Gas Production Pipeline (OGPP) and/or the existing Thylacine A platform, with the installation of new subsea flowlines and facilities.

The recovered gas is expected to be transported through the OGPP to the Otway Gas Plant (OGP) near Port Campbell, Victoria, which supplies gas to the domestic market in southeast Australia. The project is adjacent to the firm’s current production operations at the offshore Otway Basin‘s Geographe and Thylacine gas fields.

Furthermore, the proposed gas project encompasses exploration, appraisal, and development of existing and future gas discoveries in Beach’s exploration permits: VIC/P43, VIC/P73, and T/30P, located in the offshore Otway Basin.

The site consists of discoveries and exploration opportunities to both the north and south of the existing Thylacine platform, with gas discoveries – Artisan and La Bella – to the north and exploration prospects within about 10 km of these discoveries and pipeline tie in points with corridors for subsea connections along with exploration prospects to the south within exploration permit T/30P and corridors for future subsea tie-back.

Moreover, the proposed scope of this gas project entails seabed surveys (geotechnical and geophysical); exploration, appraisal, and development drilling; completion of successful wells; subsea infrastructure installation; commissioning; operations and maintenance; future tie-backs; and decommissioning. Beach explains that up to six wells may be drilled and completed, with one existing well to be re-entered and completed as part of the initial drilling campaign.

The company highlights that the installation of subsea infrastructure including wellheads, flowlines, umbilicals, manifolds, and skids will be undertaken to connect any gas discoveries from the initial drilling campaign or future campaigns to the OGPP.

While the initial drilling campaign is planned to kick off in 2025, installation of new subsea facilities is intended to start in 2026. The earliest achievable date for commissioning and first gas is anticipated in 2026, subject to a final investment decision, joint venture, and regulatory approvals.

Based on the firm’s plans, the production from prospects may have an operational life of up to 30 years, dependent upon resource size, well pressure, and other factors. Beach has an equity emissions reduction target to curb Scope 1 and 2 emissions intensity by 35% by 2030.

Therefore, the emissions from this gas project are expected to align with the company’s climate change policy and GHG management plan. This project will need to comply with Australian legislative frameworks established to manage emissions, including the Climate Change Act 2022.

Beach Energy is working on various growth projects. The firm’s targeted start date for drilling operations at its development well off Taranaki is towards the end of 1Q 2024. These activities will be carried out with one of Valaris’ heavy-duty modern jack-up rigs.