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Gulliver Productions

The Point Torment gas field, in the Canning Basin, could be producing 6 MMcfpd to provide power for towns and mine sites in the West Kimberley region over a 20 year period, starting 2005.

Point Torment field part-owner and operator, Gulliver Productions' Managing Director, Bevan Warris, said a heads of agreement has been signed with LNG International Pty Ltd (LNGI), which has been sponsored by Kimberley Power Pty Ltd, one of four short-listed to provide fuel and power to Western Power in the Kimberley.

Warris said the deal was contingent on three factors: Kimberley Power winning the bid from Western Power, Gulliver confirming that the Point Torment field (EP 104) has the capacity to provide enough gas, and obtaining the necessary approvals to carry out appraisal drilling. If it wins the contract, Kimberley Power plans to use LNG as its primary fuel for the power plants in each of the West Kimberley towns of Broome, Derby, Fitzroy Crossing, Halls Creek and Looma and at several mine sites.

Warris said LNGI's proposal was based on generating power from a 'mini LNG plant' to be built in Derby. If the Point Torment field is found to be of sufficient size to provide gas for the project, the remaining LNG would be trucked to other towns and mine sites in the region. Warris said the Point Torment gas would be piped to Derby, about 20 km away.

He said the proposal, if successful, could increase Point Torment's value to $30 MM, provided the gas reserves, which he estimates could be between 80 - 100 bcf, can be proved. "Potentially, we've got 80 bcf in the three upper sands, and the lower sand is about 30 m thick but it's tight", he said. "That one has also potentially got 80 bcf in place but we probably need to go back and test it, it probably won't flow much but from that we can work out if it's better to fracture or do a horizontal well, but there is a lot of gas potentially in that sand as well."

Warris is preparing to drill the Torment-2 appraisal well, estimated to cost about $2 MM, in either July or August. "That could be an optimistic assessment, as long as it is drilled before November because of the wet season", he said. The drilling project would include the need to build a causeway on mud flats to support the drilling equipment.

The Torment-1 well was drilled in 1992 and deepened in 1994. "The hole condition started to deteriorate so we couldn't actually test all the sands we wanted to, which was a bit of a pity", Warris said. "So if we do another well and intersect the same general section, then we can test the well properly, and each of the sands, because it may be one continuous gas column or it could be in individual sands."

"One thing about the Canning, it may have a bad name, but the seismic is good", Warris said.

"The seismic over Point Torment is good data, its just a matter of drilling some more wells." Warris said if Torment-2 was successful,

Gulliver would look at going back into Torment-1 and re-test that well in preparation for production, which he predicts should flow at 3 - 4 MMcfpd.

He said although two wells would produce the required gas for the LNGI contract, if successful, a third well would probably also be drilled as a backup. "We are aiming to drill one well this year and, if it looks good, drill two wells next year and get the whole thing set up", Warris said.

The other three bidders for the project to provide power to the region were Burns and Roe Worley Pty Ltd (BRW), EDL Group Operations Pty Ltd and StateWest Power Pty Ltd. An announcement on the winning tender is expected in May 2003. The proposals that are being evaluated have been submitted by:

Burns and Roe Worley Pty Ltd (BRW)
BRW is a WA-based engineering company specialising in the power and water industries. BRW was established in 1971 and is jointly owned by Burns and Roe of the USA, and Worley Limited of Australia. BRW's client base includes power and water authorities, independent power producers, the government, the financial community, the mining and process industries, as well as manufacturing and chemical industries with large energy needs.

EDL Group Operations Pty Ltd (EDL)
EDL is an Australian based independent power producer that develops, owns and operates power generation, renewable energy and waste-to-energy projects. EDL owns and operates energy projects across six countries. It undertakes all aspects of power project development, including initial feasibility studies, design, fabrication, site construction, financing and long-term operations and maintenance. EDL has experience in remote area power generation.

Kimberley Power Pty Ltd
Kimberley Power Pty Ltd is jointly owned by ANZ Infrastructure Services (ANZIS) and The Power Place Pty Ltd. The Power Place is a newly established company, but the principals have many years of experience in the energy industry. It was established to develop, own, construct and operate power plants primarily fuelled by LNG. ANZIS is a specialist division of ANZ and is an infrastructure adviser and fund manager.

StateWest Power Pty Ltd (SWP)
SWP is a majority owned subsidiary of Wesfarmers Limited (WFL). SWP is an independent power producer specialising in electricity supply to mining operations and regional towns. StateWest also constructs, operates and maintains power supply infrastructure on behalf of third party owners. WFL is a major Australian public company with operating revenue in 2001/02 of $7.4 billion and operates through diverse business units, including Wesfarmers Energy.