Devil Creek Development Project, Australia

In early 2008 Apache Energy and its joint venture partner Santos announced the go-ahead for the Devil Creek development project (DCDP), a greenfield gas development about 40km south-west of Dampier in Western Australia.

The project, which is reported to entail an investment of about A$900m, will consist of an unmanned offshore gas production platform, an offshore gas supply pipeline, an onshore gas supply pipeline, a gas processing plant and a sales gas export pipeline.

Devil's Creek platform

The offshore platform will sit in the Apache-operated Reindeer field, which was discovered in 1997 and lies 85km north-west of Dampier in permit WA-209-P. Apache has a 55% interest in the field, which has reserves quoted at more than 390 billion cubic feet and an expected life of ten to 14 years.

In contrast, the DCDP is expected to have a life of 20-30 years, so although gas will initially be supplied by Reindeer, the project will have the capacity to tie in future prospective gas fields.

The platform will be connected to the mainland by a 92km-long pipeline. From the shoreline crossing, which will be created using horizontal direct drilling to minimise its environmental impact, an onshore 16in pipeline will take the raw gas another 11km to the Devil Creek gas plant for processing to remove produced water, after which it will be compressed and fed into the Dampier-to-Bunbury natural gas pipeline.

Produced water is expected to be less than 500bpd in the first eight years, rising to 2,500bpd thereafter.

The produced water treatment and disposal system will consist of two degassing vessels, two 200m³ storage tanks, and two hydroclones and stripping column systems designed to handle about 10,000bwpd.

The system's evaporation ponds will have a total capacity of about 100,000bwpd.

A second commercial product derived from the gas stream will be gas condensate, which will be stabilised, stored in two 20,000-barrel tanks and exported in 400-barrel tankers to Kwinana in metropolitan Perth.

Gas plant

The gas plant itself will consist of two gas processing trains to provide initially up to 100Mmscfd of dry natural gas and 80,000l a day of gas condensate, although the facilities are being designed to process up to 200Mmscfd and 160,000l a day of condensate.

To meet construction requirements a facility to accommodate 300 transient workers is nearing completion. Gas plant operations will require a variable permanent workforce of 20-30 people.

The original timeline for the project was to have included engineering and procurement, plus fabrication and assembly, to start in Q2, 2009, construction from mid-Q3 2009, commissioning by Q3 2010 and first gas around Q4 2011. But in December 2008 the JV partners decided to defer the onshore and offshore aspects of the project because of the global downturn.

Consequently Apache Energy terminated several contracts but continued to progress the necessary regulatory approvals.

A month later Apache announced a deal to supply about 154Bcf of gas from Reindeer over seven years to CITIC Pacific's Sino Iron project in Western Australia, beginning in the second half of 2011, and the DCDP was reactivated. As a result the project schedule has been revised, with the construction of the pipeline shore crossing that was originally scheduled for Q1 and Q2 2009 being deferred for about 12 months.

In March 2009 Apache signed a contract with Clough Projects Australia for the engineering, procurement and fabrication of the gas plant. The work includes engineering, design works, procurement of all permanent materials and equipment, and fabrication and assembly of all modules for the onshore facility.

The present scope of the work is worth about A$45m and is a reimbursable style of contract, with options to increase the scope of work based on mutual agreement between Clough and Apache.