They just need to bung a hole in the Timor sea bed and hey presto gas!
Wonder if Darwhine power station will ever get a whiff of this lot before its all carted off to China for use in the manufacture of useful plastic ****.
Santos's Timor Sea gas discovery
Andrew Trounson
30sep05
SANTOS and US oil major ConocoPhillips yesterday reported a "significant" new gas discovery in the Timor Sea that could open the way for a doubling in size of the $US1.5 billion ($2 billion) Darwin liquefied natural gas plant now nearing completion.
News of the Caldita-1 drill success some 265km north-northwest of Darwin, combined with a rise in oil prices, sent Santos shares up 6.8 per cent, adding about $400 million to the value of the stock.
Santos closed at $12.25, up 68c, after earlier hitting a record high of $12.47.
Drilled in 137 metres of water and to a depth of more than 4km, the Caldita-1 well has flowed natural gas at a rate of 33 million cubic feet per day. The flow rate could have been higher but was constrained by limited available surface equipment.
The flow rate raised hopes that Santos and ConocoPhillips could realise their pre-drill target of a discovery of more than 1.5 trillion cubic feet of gas.
However, the market has been left short on detail with no indication yet of the size of the gas column or whether the gas is contaminated by high carbon dioxide levels that are common in the area.
"If the gas is clean enough and the resource large enough to trigger an LNG expansion then it will be very valuable," Morgan Stanley oil and gas analyst Stuart Baker said.
Piping the gas into an expanded Darwin plant would be the most obvious development option but depending on the quality of the gas the partners would probably need close to 3 trillion cubic feet or more to support a second LNG processing train at Wickham Point.
Wickham Point is designed to take in gas from the ConocoPhillips and Santos Bayu Udan development 390km to the west of Caldita. Bayu-Undan has 3.4 trillion cubic feet of gas, all of which is needed to underwrite the 3.5 million tonne a year LNG plant.
ConocoPhillips farmed into the Caldita-1 exploration permit area in July last year, earning a 60 per cent stake by financing the drilling, and leaving Santos with 40 per cent. The two reached an understanding that they could use the existing Bayu-Undan/Wickham Point infrastructure if Caldita proved commercial.
Santos is a junior partner in Bayu Undan/Wickham with a 10.6 per cent stake, but now stands to have a much bigger slice of any expansion based on Caldita.
"This is an encouraging result and further evaluation will be carried out to assess the appraisal and development potential of Caldita and nearby resources," Santos chief executive John Ellice-Flint said.
But further appraisal work will probably have to wait until next year. The Caldita drill rig is now due to head off and drill the Firebird well near Bayu Undan.
Any development of Caldita would need an offshore facility to process the gas before piping it ashore, since the Bayu Undan facilities are too far away
http://www.theaustralian.news.com.au...764726,00.html