Subject: Lloyd's List: Woodside heralds dawn of new era in Timor Sea

Lloyd's List

July 15, 2008

Woodside heralds dawn of new era in Timor Sea.

Martyn Wingrove

PIPELAY vessel owners must be licking their lips at the prospect of installing gas pipelines across the Timor Sea after Woodside Petroleum started engineering work on its long-awaited Greater Sunrise gas development, writes Martyn Wingrove.

Subsea contractors and shipowners will hotly anticipate a number of multi-million dollar awards for the project, as Woodside has called on Mustang Engineering to undertake conceptual study work.

The project will involve the Sunrise and Troubadour fields, which were originally discovered in the 1970s, and pipelines either to East Timor or to Darwin, Australia.

Woodside, ConocoPhillips, Shell and Japan's Osaka Gas have been considering options to develop the Sunrise gas resources for more than 10 years and were looking into installing a floating liquefied natural gas production vessel in the Timor Sea at the start of this decade. That option has fallen on the wayside and the partners are looking at the economics of piping the untreated gas and condensates to a shore-based LNG plant.

With the field lying 150 km south of East Timor, this is the shortest distance, but the partners will have to build a brand new LNG plant on the island.

Although this would be seen as politically more advantageous because of the location of the fields in a jointly-owned area, there is already an LNG plant and export facilities in Darwin, which the partners would like to employ and expand.

ConocoPhillips' Wickham Point LNG facility is around 450 km from the fields so one of the longest offshore pipelines ever to be laid off the Australian coast would be required if it needed a dedicated line and a new LNG train built.

An alternative could be to send the gas to the nearby pipeline that takes Baya Undan gas to Wickham Point, but this could have capacity constraints.

Mustang, a subsidiary of Aberdeen-based Wood Group, said it will perform the engineering and conceptual study work in the Perth, Western Australia, office and that the work includes studying options to pipe gas to Wickham Point LNG or to East Timor.

If the project does progress into development then a few contractors will be well placed to undertake a sizeable volume of work. Mustang will be in the running for front-end and detailed engineering.

FMC Technologies will be top of the pile to supply subsea systems as it has a five-year frame agreement with Woodside.

FMC head of global subsea production systems Tore Halvorsem said last month that this deal can include Woodside's Pluto LNG project, Greater Sunrise and developments in the Browse basin off Western Australia. This could lead to the installation of up to 80 subsea trees and controls in the next five years.

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