Basin review, Markets

The Cooper Basin – Australia’s central gas hub

Located on the Queensland and South Australian border, the basin is centrally located to supply natural gas via pipelines to Adelaide, Sydney and regional areas, ethane to Botany Bay, and oil, condensate and liquefied petroleum gas via a liquids pipeline to Port Bonython.

Currently, there are approximately 160 producing gas fields in the Cooper Basin feeding into major production facilities at Moomba in South Australia and Ballera in Queensland through an extensive network of pipelines and flowlines via major satellite facilities.

The continued development and expansion of infrastructure throughout the 1970s – 80s is testament to the important part the Cooper Basin has played in securing gas supply to the east coast and central Australia.

Linking into the markets

Originally targeting oil, petroleum exploration in South Australia dates back to 1866 with the first oil exploration licence, OEL 1, granted by the government in 1945.

Santos drilled the first petroleum exploration well – Innamincka 1 – in the Cooper Basin in 1959, but it was the original discovery of gas at Gidgealpa in 1963 that initiated major development and production in the area.

The Moomba discovery in 1966 confirmed the region as a major petroleum province and gas supplies to Adelaide commenced in 1969 via the 790 kilometre Moomba to Adelaide pipeline. Since commissioning, the pipeline has undergone some looping and had seven compressor stations added to the mainline, ramping up capacity to 250 terajoules per day (TJ/d).

Two major lateral pipelines connect to the MAPS mainline. The Port Pirie/Whyalla lateral has a maximum capacity of approximately 24 TJ/d, with the majority of demand being from a major industrial gas user in Whyalla.

The Angaston lateral transports gas to the Riverland area in South Australia with a maximum capacity of around 18 TJ/d. The major connections on this lateral include large industrial gas users and the Envestra-owned Riverland Pipeline supplying users in Berri, Murray Bridge and Mildura.

Gas reached AGL Gas Networks receiving terminal at Wilton, southwest of Sydney from Moomba in December 1976 following the construction of the Moomba to Sydney natural gas pipeline. A number of laterals have been added to the 1,368 km pipeline to bring gas to rural and regional centres throughout New South Wales, as well as a lateral that provides an interconnection with the Victorian transmission system. In addition, two compressor stations were constructed on the line during the 1980s.

The 659 km, 355 mm diameter Moomba to Port Bonython liquids pipeline was completed in 1982. This year also saw the beginning of an increased search for gas in an effort to secure future supply to South Australia, which culminated in the signing of a ten year contract in 1992 to supply gas to the state.

In 1996, ethane sales to Sydney began, following the construction of Orica’s 1,375 km Moomba to Sydney ethane pipeline that links the Cooper Basin gas fields to Qenos’ site at Port Botany. Qenos supplies ethylene to other manufacturers on site to produce polyethylene, glycols and surfactants. The company is an equal joint venture between Orica and ExxonMobil.

Recently, the Cooper Basin Joint Venture extended their current contract to supply ethane to Qenos. The extension means the producers will supply up to an additional 56 PJ of ethane to Qenos’ Botany plant from late 2007 until the beginning of 2013.

Processing Cooper’s gas

The Moomba gas facility is located approximately 770 km north of Adelaide. The facility is operated by Santos, in a joint venture with Delhi Petroleum and Origin Energy, and takes gas production from 115 fields and 536 producing gas wells through approximately 5,600 km of pipelines and flowlines. The plant also incorporates substantial underground storage for processed sales gas and ethane.

The gas processing facility at Moomba comprises: inlet slugcatchers; seven Benfield CO2 removal trains; gas dehydration via molecular sieves; a natural gas liquids recovery plant; an ethane treatment plant, including amine absorption; and pipeline compression.

Total investment to date in Moomba by the Cooper Basin Joint Venture is approximately $8 billion. The Cooper Basin Joint Venture includes Santos as operator, Beach Petroleum – which acquired Delhi Australia Petroleum in 2006 – and Origin Energy.

Natural gas liquids are recovered at the Moomba facility via a refrigeration process, and then sent together with stabilised crude oil and condensate to the Port Bonython hydrocarbon processing plant. Port Bonython is located on the coast of South Australia near Whyalla at the head of the Spencer Gulf, approximately 250 km northwest of Adelaide.

The processing facility receives a mixture of condensate, crude oil, propane and butane which is processed in distillation towers and molecular sieves to produce various products.

Total investment by the Cooper Basin Joint Venture to construct Port Bonython and the liquids pipeline from Moomba was approximately $450 million.

The Ballera facility is located in southwest Queensland, approximately 90 km east of the South Australia/Queensland border and about 950 km north of Adelaide.

Gas production is fed into the facility from approximately 45 fields containing about 130 producing gas wells through approximately 450 km of pipelines and flowlines.

All field boost compression is located at the plant. Further nodal compression is operational at Ballera West, Challum and Munkah/Wackett. The Ballera facility also incorporates a moderate size underground storage for processed sales gas at the Chookoo field.

Some natural gas liquids are recovered at Ballera, with raw gas and condensate sent to Moomba via the 180 km Ballera – Moomba pipeline, which allows additional recovery of liquids via the Moomba facility’s refrigeration process.

Sales gas is sent to Mt Isa, Queensland via an 800 km pipeline and to Wallumbilla for transportation on to Brisbane via a 1,100 km pipeline. Part of this link is the 755 km, 400 mm diameter South West Queensland Pipeline (SWQP) running from Ballera to Wallumbilla.

Establishing connections of a different kind

Activity continues at the Cooper Basin hub with Epic Energy’s expansion of the SWQP.

Completed in 1996, the SWQP runs for 755 km from Ballera to Wallumbilla in southeast Queensland, and has an uncompressed capacity of 130 TJ/d. At Wallumbilla, it connects with separate pipelines to transport gas onto Gladstone and Brisbane respectively.

The SWQP is also designed to receive gas at Wallumbilla from surrounding fields, which is then transported to Gladstone and Brisbane or flowed back in a westerly direction to Ballera. The pipeline delivers gas to various locations along the pipeline, including supply to the Roma and Barcaldine power stations.

In July 2007, Epic and AGL Energy signed a long term contract – which has a minimum term of 15 years – for the transportation of a total of 390 PJ of gas from eastern Queensland to both the MAPS and the MSP, which will happen through major expansion of the SWQP and its capacity.

Stage 1 of the expansion is the construction of the Queensland to South Australia/New South Wales (QSN) Link that will provide the final link between the Queensland, South Australia and New South Wales gas markets. The 180 km extension will run from Ballera to Moomba, joining the SWQP to the Moomba to Adelaide Pipeline System and providing a delivery onto the Moomba to Sydney Pipeline System. In February this year, Epic awarded Nacap Australia the construction contract for the entire QSN Link, which has been designed to be able to transport up to 250 TJ/d when fully compressed.

Completion of project construction is scheduled for December 2008 and first gas deliveries are due in January 2009.

Stage 1 also includes the construction of a mid-line compressor station on the SWQP near Charleville and compression at the Wallumbilla compound, with an approximate capacity of 168 TJ/d.
The stage 2 expansion was announced in December 2007 and will include two additional SWQP compressor stations, an additional 56 PJ of ethane to Qenos’ Botany plant from late 2007 until the beginning of 2013.

The future for Cooper’s gas

The Cooper Basin has proved to be one of Australia’s richest regions in terms of tapped and untapped resources. Gas exploration and production continues to yield increasingly promising results although a report commissioned by the Energy Supply Association of Australia has said that Cooper gas reserves are expected to decline in the period leading up to 2020.

Santos attributed a 12 per cent drop from 2007 levels of Cooper sales gas and ethane production due to a natural field decline. With current 2P reserves of 9.7 trillion cubic feet in the Cooper Basin region, the company has said that its coal seam gas reserves in Queensland now exceed its conventional gas reserves in the Cooper Basin.

Beach Petroleum’s drilling program in the Cooper/Eromanga over the year ending in June 2008 added net gas reserves of 12 PJ to the company and brought Beach’s 2P gas reserves in the basin to 235 PJ. The company’s exploration and development drilling program for 2007/08 comprised 27 gas wells, of which 25 proved successful.

Origin’s 2007-08 drilling program in the Cooper/Eromanga included 20 wells, of which 18 were cased for production. The company foresees a potential 2008-09 drilling program of 38 gas wells in the area. As at June 2008, the company had gas reserves of 157 PJ in the region.

Other companies such as Innamincka Petroleum and Great Artesian Oil and Gas continue to explore in the Cooper Basin area.

Earlier this year, Innamincka announced plans for a modular type gas processing plant at its Yarrow oil field that would include a 30 km pipeline from the Crocus field in PEL 103 to the plant. The company said that it aims to develop a CO2 stream to Flax injection at the processing plant, which would have an expected capacity of 20 million cubic feet per day. Innamincka plans to prove up reserves for the next 12-18 months to commercially justify such a development and once a final decision has been made, this could see a gas connection from the Crocus-Yarrow pipeline to Epic’s QSN Link.

Also earlier in the year, Great Artesian Oil and Gas – who merged with Drillsearch Energy in August – proceeded to conduct a FEED study for the construction of a low emissions gas processing plant in its PEL 106 permit that would produce sales gas, LPG and condensate, with an envisaged capacity of 20 MMcf/d. The facility would use Cool Energy’s CryoCell technology for CO2 capture, storage and potential sale for use in enhanced oil recovery programs. The project is a joint venture between Great Artesian, Cool Energy and Beach Petroleum.

While the Cooper Basin gas reserves may decline over the following decades, exciting exploration and development projects continue to proceed in the region. Particularly, Santos’ proposed Moomba Carbon Storage Project is set to ensure that the basin remains an important energy hub well into the future.

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