Bayu-Undan

Bayu-Undan Field Information

Bayu-Undan and other gas fields to the north and north-west of Darwin will make the Territory Australia’s fourth gas hub (following Bass Strait, Moomba and the North West Shelf).

The Timor Sea contains over 20 trillion cubic feet (tcf) of gas (this is equivalent to 1000 years’ gas supply for Darwin), compared with 11tcf of known gas reserves in the North West Shelf when it was first developed for LNG. Of the gas fields in the Timor Sea, Bayu-Undan, with 3.4tcf, will come on line first. Sunrise, further to the north east, is the biggest undeveloped field in the Timor Sea, with 8.4 tcf of gas.

The Bayu-Undan field was discovered in 1995, will have 26 wells and will provide condensate (a light oil used in refineries) and Liquid Petroleum Gas (LPG) for about 20 years. Once the wells are in place, later this year, ConocoPhillips, the operator of the Bayu-Undan project, will start the ‘liquids stripping’ phase, in which the condensate and LPG are removed and the gas is recycled back into reservoirs in the seabed. This part of the project is well on track, with condensate production due to start in 2004.

Latest Developments

The Timor Sea Treaty between the Federal Government and East Timorese Government was ratified on 6 March 2003. This is a major step forward for the Bayu-Undan field as the Treaty needed to be ratified before proceeding with the planned $3 billion investment in a pipeline to Darwin and an LNG plant at Wickham Point, near Darwin. The Bayu-Undan field joint venture board is expected to meet later this month.

ConocoPhillips has signed a Heads of Agreement (HOA) with the Tokyo Electric Power Company Incorporated (TEPCO) and Tokyo Gas Co. Ltd (TG) for the sale of three million tonnes per year of LNG from the Bayu-Undan field. This agreement commits nearly 100% of the proven reserves of this field.

Darwin - Supply and Service

Darwin is already a key player in development of the Timor Sea, with many Territory based companies providing support and supplies to the five operating fields, including Laminaria/Corallina. Most major contracts have been let for construction and installation of the offshore Bayu-Undan facilities and for drilling of production wells, with about $15 to $20 million a year expected to flow into the Territory economy in the next three years.

Toll Energy is establishing a $1 million supply base at Berrimah, with all subcontracts awarded to local companies. Oil and gas service company Baker Hughes Inteq is building a $2.3 million drilling fluid plant at Darwin’s East Arm Wharf, with 80 per cent of the subcontracts awarded locally. Darwin fabrication company EC&E is doing most of the structural work.

The biggest opportunities, however, will be in the 20-year operational phase of the Bayu-Undan project, with up to $100 million a year to be spent on operating supplies (fuel, water and food), repairs and maintenance, air and sea transport, and staff.

Wickham Point LNG Plant

The next phase of Bayu-Undan is to bring gas onshore. ConocoPhillips previously gained environmental approvals for its proposed $3 billion LNG site at Wickham Point, on Middle Arm Peninsula. It has since readvertised and received approval for the project as a staged development of a world-class 10 million tonne per annum plant.

There will be significant opportunities for jobs and contracts in pipeline installation and building the LNG plant and support operations. The joint venture board has announced final approval for the investment, and work on the LNG plant has begun. The LNG plant will create up to 1300 jobs over the life of the project. The Northern Territory Government is spending $19 million on gas related infrastructure for Wickham Point, with road works already well underway.

Bechtel, the world's largest engineering/construction company, has been chosen by ConocoPhillips to build the Wickham Point LNG plant. Bechtel is well advanced in its plans to construct the $1.6 million dollar plant and has already signed Territory businesses up to major construction contracts.

For more information on the Bayu-Undan project, please read the Bayu-Undan Gas Fact Sheet, the Timor Sea Gas Onshore newsletter and other Bayu-Undan publications.

Updated 14 July, 2003

Last updated: Monday, September 15, 2003