|Subject: AU: Santos and Woodside join
Santos and Woodside join forces By Nigel Wilson, Energy Writer 18mar03
SANTOS and Woodside are discussing possible joint development of about two trillion cubic feet of gas in the Timor Sea after the latest evaluation significantly lifted gas reserves.
The proposal would see Woodside's Blacktip find linked with Santos's Petrel and Tern discoveries to supply markets in the Northern Territory.
Such a development would compete directly with the PNG gas project, which already has a potential territory sale to MIM's McArthur River zinc metal project and is seeking to supply other customers such as Alcan and the Power and Water Authority.
Woodside last year flagged that it would consider a joint development in the Bonaparte Gulf when it became clear the potential territory gas market was not large enough on its own to provide a foundation market for the Sunrise gas project further out in the Timor Sea.
A joint development might result in Blacktip gas being processed on a facility located on the Petrel field and then piped ashore to meet the Mereenie pipeline south of Darwin.
The Petrel and Tern fields are in the Bonaparte Basin, 255km west of Darwin, straddling the maritime boundary between the territory and Western Australia, while Blacktip is 330km southwest of Darwin and about 85km from Petrel in a West Australian-controlled area.
Petrel was found in 1969 and Tern two years later, while Blacktip was discovered in late 2001.
Santos's board, meeting in Darwin this week, is expected to report progress on the joint development in discussions with territory Chief Minister, Clare Martin.
Yesterday, Santos managing director John Ellice-Flint said the territory needed to replace the maturing Mereenie fields with long-term gas supplies for domestic and non-major industry and the Petrel and Tern fields were the most logical solution. Mereenie contracts expire in 2009.
He said a geotechnical re-evaluation of the resource had led to an increase in reserves to about 1.3tcf, 25 per cent more than previously estimated.
The Blacktip reservoir is estimated to contain about 1tcf of recoverable gas.
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