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Tuesday
20 September 2011
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WA equipment deal could be close
Friday, 24 June 2011
James McGrath
THE Western Australian government could announce a plan to
bring a rig capable of drilling for tight and shale gas into WA
during the third quarter, Department of Mines and Petroleum
executive director Bill Tinapple said.
The government has been in consultation with drillingcompanies in the Perth and Canning basins since October
last year about helping to bring in another rig capable of
drilling to the depth required to access unconventionaltargets after the Weatherford 826 departs.
Tinapple responded to claims made to
EnergyNewsBulletin from a source close to negotiations
that we should hear something within three to fourweeks, saying that while a final deal was close, nothingconcrete had been worked through.
Were close, but its really up to the companies now to
come to the party. Theyve said that theyd be willing tosign off on a deal, but until we get the piece of paper to
them and they sign on the dotted line the deals not
done, he said.
He did confirm that one rig would be brought in, and thegovernment was looking to pay for mobilisation costs,thought to be in the $3-5 million range, conditional upon
the oil and gas companies concerned forming a drillingclub.
Tinapple also confirmed that the technical requirements
of the rig had been agreed upon by all parties, and an expression of interest hadbeen floated in front of rig suppliers, a process he said was going well at this
stage.
A shortage of equipment in the state, particularly the prospective Perth Basin,has hampered efforts to commercialise tight gas resources.
The only rig capable of drilling at depths required to crack unconventionalreservoirs in WA, the Weatherford 826 rig, is slated to go interstate within
months.
Fraccing equipment is in short supply as well, with operators having to source
the equipment from interstate before they can frac, adding considerably toproject economics.
Scottish-based junior tight gas explorer Warrego Energy has previously told ENB
that it was part of the consultation process, but was looking at sourcing its ownequipment and had grown frustrated with a lack of progress made.
Access to infrastructure in WA for the type of work were trying to do is a barrier
of entry for all of us really, director Duncan McNiven said.
What we have to look at is bringing in a rig ourselves. Thats something that
weve talked to the [state] government about and the government is talkingabout having a proposal to fund the mobilisation costs and introduce
infrastructure into the state.
Its in the nature of government that its not moving as quickly as government
would like.
The WA government sees unconventional gas resources in WA as a vital cog in
getting more supply to the domestic gas market, where despite the plethora ofLNG projects in the state, gas prices remain higher than the eastern states.
Tinapple told ENB back in October last year that the exploitation of the states
unconventional resources was vital.
Weatherford Rig 826 on
location at Arrowsmith-2,courtesy Norwest Energy
Gas drainage at Tahmoor.
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Page 1 of 2EnergyNewsBulletin.net - WA equipment deal could be close
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Despite the large gas resources off our coast, were projecting that there maybe a risk of having a domestic gas shortage over the coming years until the bigLNG projects get up and operating and their domestic gas commitments come
into play, he said.
Given that, weve been trying to stimulate domestic gas sources andunconventional and geothermal are really the two energy sources that weve
been focusing on.
We want to facilitate this embryonic industry of unconventional gas and weve
looked at what are the problems, what are the hurdles to get over to try and get
exploration demonstration projects off the ground.
It seems like the gas prices are enough to make it worthwhile but we donthave equipment. Were trying to get out and see what we can do about that as a
government.
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