Joint venture partners Mitsui E&P and Beach Energy have made a final investment decision (FID) on stage two of the Waitsia gas project in the onshore Perth Basin, Western Australia.
The 50:50 partners announced the milestone in late December after signing key commercial agreements with the North West Shelf joint venture, the Western Australian Government and the Australian Gas Infrastructure Group.
With the FID, Mitsui and Beach have committed initial funding for the 250 terajoule (TJ) per day stage two development, with full funding to be committed once certain conditions and commercial conditions have been satisfied.
Operator Mitsui is now moving the project towards its environmental impact assessment approval, which is part of the final phase.
Mitsui is ramping up detailed engineering and procurement work, with initial construction activities planned to commence from July 2021. The JV has forecast production to start in the second half of 2023.
The development involves the drilling of up to six wells, construction of a new gas processing facility and associated gas gathering infrastructure.
Beach managing director Matt Jay said the sanctioning of Waitsia stage two was an important milestone for the company, being one of its most significant growth targets over recent years.
“Waitsia is a world-class, low-cost onshore gas resource and we are thrilled to be growing the Beach portfolio in Western Australia,” Kay said.
An average of 125 workers will be employed during the construction phase, with a peak workforce of 200.
The long-term operational workforce will be around 12 to 15 people. In addition, 20-30 Perth-based operation and engineering support workers will be required throughout the life of the project.
According to the WA Government, the 250TJ/day gas facility will be the first large-scale gas plant built in the Perth Basin.
Consistent with the WA Domestic Gas Policy, the Waitsia joint venture will make 15 per cent of its LNG exports available to the domestic market up until 2028.
From 2029, all remaining Waitsia reserves will be made available to the domestic market.
WA Premier Mark McGowan commented: “The Waitsia gas project stage two will provide energy certainty to the Mid West and the state, and will deliver direct economic benefits to the WA economy while filling capacity at the Karratha gas plant.”