The two companies will complete and tie back the Halyard well in WA 13L and the Spar-2 appraisal well in WA 4R, both located in the offshore Carnarvon Basin, where expected recoverable resources of approximately 335 petajoules could supply the state with gas until at least 2025.
“This development is a significant new addition to the Western Australian supply portfolio, with gas from this area expected to supply around 10 per cent of Western Australia’s domestic gas needs from 2012,”? Santos said.
To facilitate the Halyard and Spar development, Santos has sold 55 per cent of its working interest in Spar to Apache for an initial payment of approximately $A34 million, with the potential for additional payments of up to approximately $A94 million depending on the level of certified reserves in Spar following the drilling of Spar-2 later this year.
Santos will hold 45 per cent equity in both Halyard and Spar, while Apache will hold 55 per cent equity and will be the operator of both fields.
Santos said that Halyard is expected to be operational in mid-2011, and Spar in late 2012.
Santos Vice President of Western Australia and the Northern Territory John Anderson said “Halyard and Spar are perfectly positioned to be developed in the near term by tying the gas fields back to the existing gas hub at Varanus Island.”?
The East Spar upstream pipeline, which is owned by Apache and Santos and designed to transport over 200 million cubic feet per day of gas, will be recommissioned to accept gas from the Greater East Spar Area. Sales gas will be exported from Varanus Island via existing export pipelines that connect to the Dampier to Bunbury Natural Gas Pipeline and the Goldfields Gas Pipeline.