Just to the north of Australia in the Timor Sea, vast gas resources are under development.
Just to north of the Northern Territory vast gas resources are under development in the Bonaparte Basin. The Timor Sea is regarded as a highly prospective petroleum region and contains world scale oil and gas fields under various stages of operation, construction and consideration. With some fields already under production and others imminent, the Northern Territory Government is working to secure and develop these resources.
Significant energy resources in the Northern Territory include onshore natural gas in the Amadeus Basin at Palm Valley and Mereenie, and world class offshore reserves in the Bonaparte Basin at Bayu-Undan, Greater Sunrise, Caldita, Evans Shoal, Blacktip and Petrel Tern.
There is currently onshore oil production at Mereenie and offshore production at Jabiru, Challis/Cassini, Laminaria/ Corallina, Buffalo, and Elang/Kakatua in the Timor Sea. The Puffin field is expected to begin production in the first half of 2007.
The Bayu-Undan field is operated by ConocoPhillips Australia and has recoverable reserves of more than 3.4 Tcf (trillion cubic feet) of natural gas and approximately 400 million barrels of liquid hydrocarbons (LPG and condensate). Stage One of the Bayu-Undan development, the liquids stripping phase, became operational in March 2004. The second stage, gas development, which included construction of a $750 million, 500km underwater pipeline from the Bayu-Undan field to an LNG plant near Darwin, was completed in 2005.
In February 2006, the first shipment of liquid natural gas left Darwin from the newly commissioned $1.75 billion, 3.24 million tonne per annum LNG plant in Darwin Harbour. LNG is sold to Japanese energy companies under a 17-year contract. The plant is geared for new gas developments in the Timor Sea, with approval for expansion up to 10 million tones per annum of LNG production.
There are also plans to develop the Blacktip field in the southern Bonaparte Basin to supply the Northern Territory’s own energy needs for the long term. A gas sales agreement has been signed by the Territory's Power and Water Corporation and energy developer Eni Australia - another milestone towards meeting the Northern Territory's electricity needs for the next 25 years. The agreement will see Power and Water purchasing around 750 petajoules of gas that will be used to run power stations in all regional centres from Alice Springs to Darwin. A separate Gas Transportation Agreement between Power and Water and the Australian Pipeline Trust will lead to the construction of a 275 km Bonaparte Gas pipeline linking the gas processing plant at Wadeye to the existing Amadeus Basin to Darwin gas pipeline.
For those looking to take advantage of the arrival of gas onshore, the Government has made land available for industrial development at Middle Arm near Darwin.
Oil and gas exploration in the Timor Sea has surged up to an estimated $185 million for the 2005 calendar year. The upturn has resulted in the discovery of four moderate size oil fields and one large gas field, creating the potential for a spate of new energy projects across the region.
Other major gas fields in the Timor Sea being considered for development are:
- Greater Sunrise - gas/condensate (Partners – Woodside | Shell | ConocoPhillips| Osaka Gas)
Estimated recoverable reserves of 7.7Tcf - Evans Shoal - gas/condensate (Partners – Santos | Shell | Osaka Gas)
Estimated recoverable reserves of 6.6 Tcf - Petrel /Tern - gas (Partners – Santos | Origin Energy)
Estimated recoverable reserves of 1.4 Tcf - Blacktip - gas (Partners – ENI Australia).
Estimated recoverable reserves of 1.1 Tcf - Caldita – gas (Partners – ConocoPhillips, Santos) New gas discovery
- Swallow – Coogee Resources. New gas discovery
Potentially, the development of the petroleum resources in the Timor Sea and piping of gas from Bayu-Undan to Darwin will be followed by other fields including Greater Sunrise, Blacktip, and the newly discovered Caldita reserves. These projects will bring substantial benefits and economic growth to Darwin and the Northern Territory.
A ‘clean fuels cluster' is being developed to make Darwin a centre for downstream oil and gas-based industries.These include a $77 million biodiesel production facility currently under construction and a $450 million condensate processing facility proposed for Darwin Business Park announced in February this year. Darwin Clean Fuels' plant will process condensate from Australia's northern gas fields, producing high quality fuel for road transport.
Another value adding proposal is a $33 million plant which will extract helium from the LNG plant's vent gas stream. LNG production in northern Australia could benefit from an announcement by Indonesia that it won't extend some gas supply contracts beyond 2010, as the fuel is needed within the country. With Asian demand for LNG expected to surge, companies such as ConocoPhillips, Santos and Woodside are well placed to capitalise on existing and future discoveries.
With its abundant petroleum resources, central location to Asian markets and an increasing number of major resource projects in the Timor Sea and beyond, the Northern Territory is ideally positioned to be an energy centre of global significance.
