Buru Energy says commercialisation of its Rafael gas-condensate discovery in Western Australia’s Canning Basin will service the Kimberley’s power needs at reduced capital expenditure through phased development and provide the company with important early cashflow.
Management says the project, which is the first gas-condensate field in the basin, is viable for all contingent Rafael resource volumes as it moves ahead with de-risking subsurface uncertainties and firming up volumetric estimates, with a 3D seismic survey imminent and to be followed by appraisal well drilling next year.
With the 2021 Rafael-1 well successfully drilled and flow-tested, Buru has a range of gross unrisked contingent gas resources for the field, ranging from a low-case estimate of 59 billion cubic feet (BCF), to a high-case prediction of 1024 BCF. The best estimate is for 260 BCF.
Oil and condensate gross unrisked contingent resources range from a low-case estimate of 1.2 million barrels to a high-case estimate of 20.5 million barrels, with a best estimate of 5.3 million barrels.
“The work done to date confirms that Rafael gas and condensate can be technically, commercially, and economically developed across the full range of independently assessed contingent resources, with a sequenced development based on appraisal outcomes providing strategic advantages to resource development. This strategy will support the potential transformation of the Kimberley power system by providing a mix of low carbon intensity, secure and affordable energy to regional industrial consumers and communities in the near term, and also help optimise a full-scale, CCS supported, and export focussed development in the medium to longer term. Buru has the ingredients to generate significant value and benefits to stakeholders, and prospective development partners.” Buru Energy chief executive officer Thomas Nador.
For a low-case volume outcome of less than 59 BCF of gas and 1.2 million barrels of condensate, Buru will meet the energy needs of the Kimberley by developing a small-footprint, scalable liquefied natural gas (LNG) supply stream, in which gas and condensate will travel through underground pipes from Rafael to a mini-LNG plant before being trucked to Broome and regional communities for power generation.
The phase-one scheme will also include an option to export condensate via the Broome port. The regional power markets in line to be serviced by the scheme include Derby, Camballin/Looma, Fitzroy Crossing, Halls Creek and Broome.
The plan is already progressing towards front-end engineering design (FEED) and Buru is aiming for first production in 2027, with a project lifespan of 20 years. As part of the plan, Rafael will require one to two appraisal wells, which will be completed as producing wells that are expected to deliver between 0.05 – 0.10 million tonnes per annum of LNG from a gas flowrate of 8 to 16 million standard cubic feet per day (mmscf/d) and 225 to 450 barrels of oil per day (bopd) condensate.
If, as a result of next year’s appraisal drilling, Rafael’s volumes firm-up at between about 400 and 800 BCF and can be converted from contingent resources to reserves, Buru will select concepts which involve the completion of phase one. in addition to the production of blue methanol and/or ammonia products as part of phase two.
“Blue” refers to a low-carbon method of production and in this case refers to methanol and ammonia derived from natural gas in a process by which carbon dioxide by-product is reinjected into subsurface reservoirs. The process is known as carbon capture and storage (CCS) and vastly reduces “well-to-tank” carbon dioxide emissions.
As part of the phase-two plan, which management says will now deliver LNG, condensate and blue methanol, the company will commission a methanol production facility supported by CCS. The plant will produce between 0.5 and one million tonnes per annum of blue methanol and be fed by gas from five to 10 appraisal wells in Rafael, flowing at between 55 to 110 mmscf/d.
Buru says its methanol plant could reach first production in 2029 and have a project life of 20 years. With methanol becoming more widely accepted as a cleaner option for marine fuels, the company may service the international marine power markets through export or use the product for regional bunkering in Australia.
In addition to blue methanol, Buru plans on producing blue ammonia from Rafael during phase two by commissioning an ammonia plant, again supported by CCS, to meet the needs of the export market. The ammonia would be piped to the mouth of the Fitzroy River at King Sound near Derby for export, acting as feedstock for the global fertilizer market that is undergoing rapid decarbonisation.
To address Rafael’s high-side contingent resource volume case of more than 1000 BCF of gas and 20 million barrels of condensate, the company will complete its phase-one plan, in addition to producing LNG for export through a small-scale, permanently-moored floating facility in King Sound.
The facility is planned with a capacity of about 1.6 million tonnes per annum of LNG and will be fed by up to 12 appraisal wells to be drilled and completed within Rafael. The wells are modelled to flow gas at about 280 mmscf/d and the project has an estimated life of 10 years, kicking off in 2029.
Buru has its sights set on the acquisition of a 200-square-kilometre, 3D seismic survey at Rafael as a vital next step to mature the project and allow cost-effective appraisal drilling of the discovery, with an aim to reduce uncertainly surrounding gas column height and reservoir properties. Delivery of a fast-tracked seismic volume is expected in November and interpretation of the dataset is expected to be complete by year’s end.
The company says it has started discussions with potential third-party development partners, traditional landowners, product offtakers and government in support of the field development contingencies. Rig selection for next year’s appraisal drilling is also underway.
In addition, the selection of third-party engineering service providers has begun in a bid to mature phase-one technical and commercial definition to support next year’s FEED, a final investment decision in 2025 and first production in 2027.
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