Page 11 - AsianOil Week 33 2022

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Dorado partners postpone development,

citing cost risks

PROJECTS & SANTOS has postponed the $2bn development in the project to help share and de-risk their
COMPANIES of the Dorado oilfield off the coast of Western expenditure.
Australia, concluding that soaring costs relating “The joint venture has been working with
The cost risks relate to to the construction of a floating production stor- the relevant contractor to ensure the contract
the project's planned age and offloading (FPSO) meant that the project is in an acceptable form,” Carnarvon said. “This
FPSO unit. was too risky. requires the cost environment to be more stable
The Australian major reported in its half-year and more certainty around supply chain capac-
results last week that “inflationary cost environ- ity. Because the FPSO represents more than
ment and supply chain uncertainty [do] not 50% of the expected project cost, it is important
support [a final investment decision] in 2022.” that this work scope is carefully contracted and
Santos’ partner in the project, Sydney-listed managed, especially in the current supply chain
Carnarvon Energy, said separately that front-end environment.”
engineering design (FEED) work on the project The FEED study, undertaken by Singapore’s
was now “substantially complete.” But while the Sembcorp Marine, covered both the FPSO and
study showed that the project was “technically the field’s planned wellhead platform. The pro-
robust,” it too warned that the risk of cost escala- ject envisages opportunities to tie back other
tion was “unacceptably high and requires fiscal discoveries in the area, including Pavo. Dorado
discipline until the environment shows signs of would involve drilling 10 wells into four reser-
stabilising.” voirs – Caley, Baxter, Crespin and Milne – and
At issue is the finalisation of an engineer- using a 100,000 barrel per day (bpd) FPSO to
ing procurement and construction contract handle production. The unit would also handle
(EPC) for Dorado’s FPSO, given the surge in 215mn cubic feet (6.09mn cubic metres) per day
international costs for such units. Both compa- of gas injection, and store up to 1mn barrels of oil
nies have said they are looking to divest shares and condensate. ™

Australian LNG export revenues spike in July

PIPELINES & AUSTRALIAN LNG export revenues soared operating at 84% of their nameplate capacity
TRANSPORT to a record AUD6.84bn ($4.8bn) in July, up 2% during the last month, EnergyQuest reported.
month on month, as soaring market prices more LNG shipments from the country’s East
Soaring market prices than offset the impact of a dip in volumes, energy Coast projects meanwhile totalled 1.7mn tonnes
offset the impact of a consultancy EnergyQuest reported on August in July, versus 1.8mn tonnes in the previous
dip in volumes. 17. month and 1.8mn tonnes in July last year. Those
Revenues were also up 59% year on year, the projects are working at 79% of their nameplate
consultancy said. LNG export volumes came to capacity during the month.
6.2mn tonnes during the month, down from a Most of Australia’s LNG is sold under long-
record 7.31 tonnes in June. On an annualised term contracts, and the country sold only five
basis, exports amounted to 73mn tonnes. The spot cargoes last month, all from West Coast
country exported an annual record of 82.6mn projects.
tonnes in the 12 months ending June 30, accord- The further climb in Australian LNG export
ing to EnergyQuest. revenues in July comes as the government voices
Twenty-five Australian LNG cargoes were concerns that the country may face a domestic
dispatched to China during July, compared with supply crunch in the coming years. The Austral-
27 in the previous month and 32 in July last year. ian Competition and Consumer Commission
Thirty-six cargoes went to Japan, versus 37 in (ACCC) issued a report recently projecting that
June this year and 32 in July last year. Japan has the country would face gas shortages and steep
re-established itself as the top buyer of Australian price hikes in 2023 and 2024. It has suggested
LNG in recent months. that the government invoke, if necessary, the
LNG exports from Australia’s West Coast fell 2017 Australian Domestic Gas Supply Mecha-
to 4.5mn tonnes in July from a record of 5.5mn nism (ADGSM), that would enable authorities
tonnes in June, and versus 5mn tonnes in July to redirect supplies that had been meant for LNG
last year. West Coast liquefaction terminals were export to the domestic market. ™

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