A joint venture between US-based ConocoPhillips and Karoon Gas Australia has received the necessary federal government approvals to begin a drilling campaign in three blocks in the Browse Basin, with a view to firming up sufficient gas reserves to pursue an LNG project, Karoon said Monday.
The go-ahead was given by the Australian government's Department of Sustainability, Environment, Water, Population and Communities.
The partners are now moving quickly into the phase two drilling program, which will comprise five to eight wells, Karoon said. Final drilling contracts for the campaign are currently being negotiated.
The joint venture has identified a range of exploration targets near the greater Poseidon/Kronos structure from new 3-D seismic data. At least four wells are planned for the WA-315-P and WA-398-P permits, which contain the Poseidon and Kronos gas discoveries, with one well planned for the WA-314-P permit.
"We expect the drilling program to commence in the fourth quarter 2011," Karoon added. "Drilling operations are estimated to run for eighteen months to two years."
The drilling campaign will allow the size and quality of the hydrocarbon accumulations in the permits to be determined in preparation for a development decision, Karoon said. The company added that it believed the new prospects had the potential to underpin a meaningful increase in the capacity and economics of an eventual LNG project.
The Browse Basin is located 350 km off northwestern Australia and already hosts significant known gas reserves. A joint venture led by Woodside Petroleum is currently conducting front-end engineering and design studies for a 12 million mt/year LNG project based on 14 Tcf of gas in the basin's Torosa, Brecknock and Calliance fields.
Woodside and its partners BHP Billiton, BP, Chevron and Shell are planning to build their foundation LNG project at James Price Point, a site designated by the Western Australian state government as a hub for the development of all Browse Basin gas.
The WA-315-P and WA-398-P permits are owned 40% by Karoon and 60% by ConocoPhillips. The WA-314-P permit is held 90% by Karoon and 10% by ConocoPhillips.
