Western Australian Premier Alan Carpenter has welcomed a decision by Woodside to commit to the state government’s controversial domestic gas reservation policy.

The Woodside board confirmed the arrangement when announcing its decision to invest $1.4 billion in the Pluto Liquefied Natural Gas (LNG) development off the Pilbara coast. The domestic gas deal was finalised early December in an exchange of letters between Carpenter and Woodside’s Managing Director and Chief Executive Officer, Don Voelte.

“Securing natural gas reserves for WA consumers is critical to our State’s long-term economic future”, Carpenter said. “I thank Mr Voelte for his support on this very important matter and welcome Woodside’s investment in another exciting new gas development off WA.”

Under the terms of the Pluto domestic gas arrangement, Woodside has agreed to market and sell the equivalent of 15% of the project’s produced LNG to the WA energy market, providing it is commercially viable.

Carpenter said Woodside and the state government will negotiate in good faith an appropriate test of commercial viability. “The commencement date of the commitment will occur five years after the date LNG is first exported from Pluto, or the date on which the 30-millionth tonne of LNG produced at the Pluto site is exported”, he said.

“I fully support and promote the LNG export industry and what this deal has demonstrated is that gas producers can reserve gas for both export and domestic use. It also demonstrates that the state’s 15% domestic gas reservation policy is realistic and achievable.”

Woodside is due to make its final investment decision by the middle of next year on the project, estimated to cost $6 - $10billion.

An operations room that has been established by Geoscience Australia to detect earthquakes in the Australian region following the devastating 2004 Indian Ocean tsunami has been officially opened by federal Industry, Tourism and Resources Minister, Ian Macfarlane.

The centre will be operational around the clock, monitoring around 39 Australian seismic stations and around 70 overseas stations at any one time, with information being shared with other countries in the region. It will detect earthquakes in the region and determine whether they are likely to cause a tsunami by examining the magnitude, location, depth and other seismic characteristics.

Macfarlane said the Bureau of Meteorology would collect tide gauge data and the two agencies would work together to determine whether a tsunami warning should be issued. The operations hub is part of the development of an Australian Tsunami Warning Centre (ATWC), expected to be operational by the middle of 2007.

The ATWC is part of the Australian Tsunami Warning System (ATWS), a collaborative project involving Geoscience Australia, the Bureau of Meteorology, Emergency Management Australia, and AusAID. The programme is coordinated by the Department of Foreign Affairs and Trade.

The role of the ATWS is to provide a comprehensive tsunami warning system for Australia, support international efforts to establish an Indian Ocean Tsunami Warning System and contribute to the facilitation of tsunami warnings for the South Pacific.

Production testing started at the Timmy gas field, south of Molopo’s Mungi gas field in Queensland’s Bowen Basin on 5 December.

The Timmy-1 vertical production well has been placed on pump after the two lateral wells Timmy 2 and 3 where flushed, cleaned and a new pump installed in Timmy- 1. Molopo Managing Director, Stephen Mitchell, said dewatering of the vertical well is currently in progress.

“The intersecting laterals, Timmy 2 and 3, have a combined in seam length of 1,927 m in separate seams”, Mitchell said. “The Timmy well was previously placed on a very brief production test prior to pump failure. The well yielded very high water production rates, when compared to lateral wells drilled in the Mungi and Harcourt gas fields, indicating potentially higher permeability and gas flow rates.”

In preparation for resumption of production testing, a workover was completed on the vertical and fully lined lateral wells. The completed workover established effective fluid communication between Timmy-1 and each lateral well.

Timmy 1, 2 and 3 are located in ATP602P, which covers an area of 310 km2. The area contains the Timmy prospect, which was previously drilled by Conoco, where a production test well flowed 150,000scf/d using older stimulation techniques.

Mitchell said no reserves have been established at Timmy. “However it is estimated that the target coals exceed 11 m, with gas contents estimated at between 8-10m3/t”, he said. “These characteristics, combined with the large prospect area, suggest a substantial in-place gas resource.” Production results will be announced once dewatering has been completed.