Page 15 - AsianOil Week 14

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Origin increases stake in Beetaloo project
PROJECTS & COMPANIES
AUSTRALIAN developer Origin Energy will increase its stake in the Beetaloo Basin shale gas project in exchange for covering a larger share of junior partner Falcon Oil and Gas’ cost obligations.
Origin said on April 7 that Falcon had agreed to hand over a 7.5% stake in exchange for Origin increasing its carry by AUD25mn ($15.6mn) to AUD59mn ($36.8mn). Origin, which will now operate the licence with a 77.5% stake, will also control the timing, direction and budgets of future project activity.
The company said the partners’ decision on March 26 to pause the second stage of its Beeta- loo operations meant that work at the Kyalla 117 well would be delayed by at least three months. Stimulation and an extended production test are slated to take place in the first half of financial year 2020-2021, with drilling of the Velkerri Flank well now scheduled for the second half of the period.
The project was put on hold in response to the coronavirus (COVID-19) pandemic. Origin said that it could defer exploration and appraisal
work beyond the second stage while still ful- filling its permit obligations. The company has begun reviewing its spending plans in response to the pandemic as well as the crash in interna- tional oil prices.
Origin said on April 6 that its capital expend- iture for financial year 2019-2020, excluding the Australia Pacific LNG (APLNG) project, was set to be 5-10% lower than its previous guidance of AUD530-580mn ($330.1-361.3mn).
Origin said it was also pursuing a range of cost reduction initiatives for 2020-2021, including a 25-30% year-on-year cut in 2020-2021’s capex, a targeted AUD100mn reduction in retail costs of service by 2020-2021 and a AUD300-400mn ($186.9-249.2mn) cut in APLNG’s 2020-2021 upstream capex budget.
The company said it maintained its earnings before interest, taxes, depreciation, and amor- tisation (EBITDA) guidance of AUD1.4-1.5bn ($872.1-934.3mn) from energy markets, but that this was “subject to any material increase in bad and doubtful debt provisioning associated with the changing economic conditions”.™
Woodside steps up pursuit of hydrogen export goals
PROJECTS & COMPANIES
Woodside envisages large- scale hydrogen production taking off at a global level by 2030
AUSTRALIAN oil and gas developer Woodside Petroleum has unveiled the next step in its ongo- ing development of a hydrogen export strategy.
The company said on April 6 that it had teamed up with Japan’s JERA, Marubeni and IHI to study large-scale hydrogen-as-ammonia exports for use by the East Asian country’s coal-fired power generators.
Hydrogen can be used in much the same way as gas, with Woodside saying that exports to Japanese power producers could help to reduce their carbon footprint. The Australian company said Japan’s government-backed New Energy and Industrial Technology Development Organ- ization (NEDO) had given the consortium the green light to conduct a feasibility study covering the entire hydrogen-as-ammonia value chain. The study will look into the construction and operation of world-class ammonia facilities as well as optimising supply chain costs.
Woodside said it intended to investigate mov- ing from blue to green hydrogen for export. Blue hydrogen is produced from gas using steam meth- ane reforming, while green hydrogen is produced from renewable energy using electrolysis. In both production processes hydrogen is combined with nitrogen to form ammonia to enable it to be
shipped as a liquid. Ammonia does not produce any on-site carbon emissions when consumed in a power plant.
Woodside’s executive vice-president of explora- tion, Shaun Gregory, told the Australian Financial Review in October 2019 that blue hydrogen pro- duction costs were about a third of those of green hydrogen and that the cost gap needed to shrink.
JERA, a 50:50 joint venture between Tokyo Electric Power Co. (TEPCO) and Chubu Electric Power, is the world’s single largest LNG importer and controls nearly half of Japan’s domestic thermal power generation capacity.
Woodside envisages large-scale hydrogen pro- duction taking off at a global level by 2030 and has argued that Australia needs to invest heavily now in order to be a sector leader. Gregory said last year that his company wanted to be at the forefront of a hydrogen export industry that might come to rival the liquified natural gas (LNG) segment.
Woodside signed a non-binding agreement with state-run Korea Gas (KOGAS) on the joint study of the technical and commercial feasibility of a green hydrogen pilot project. The agreement built upon a memorandum of understanding (MoU) signed by the two companies in mid-2018.™
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