Kathryn Mitchell
Santos

The $200 million offshore Casino gas development is the centrepiece of Santos expanding southern Australia gas assets. Brought into production in record time early in 2006, the development is located 30 kilometres off Victoria’s south-west coast. In its first year, the field produced an average of 100 mmscf/d of gas with limited downtime for the onshore Iona gas processing facility at Pt Campbell operated by TRU Energy.

Casino is part of the emerging Otway Basin gas hub which also includes the Henry and Martha gas discoveries.

Henry gas field, located 8.5 kilometres north-west of Casino, will be the next offshore Otway field developed by Santos.

The Company approved the commencement of FEED for Henry in late 2006, with a final investment decision on the project to be made in the second half of 2007.

As well, Santos and its joint venturers AWE and Mitsui have a number of attractive exploration prospects in tenement VIC/P44, which hosts Casino and Henry. If successful, these prospects would add to the resources which could be developed in conjunction with the Henry gas field.

Dave Gaudoin, Exploration Manager, Offshore Southern and Western Australia said there is potential for significant further gas discoveries and appraisal in the area surrounding Casino.

“Further 3D seismic acquisition (planned for 2007) in addition to the exploration drilling due to commence in December 2007 will help to establish the potential in the rest of the permit area VIC/P44,’ Dave said.

“There are opportunities to increase production in this area through the development of the Henry field, and possibly the Martha discovery, as well as multiple exploration prospects including Netherby, Pecten East and Katheran and Matador.”

What is already clear is that the Casino project is a significant foundation for future development of a gas hub in south-west Victoria.

TRUenergy’s Iona plant processes Casino’s gas and dispatches it to consumers in Victoria, South Australia and New South Wales.

Santos’ contract with TRUenergy broke new ground in the commercial energy sector in 2004. The gas retailer and electricity generator agreed to buy Casino’s gas if a third well on the field proved sufficient reserves for a development.

The arrangement eliminated two elements of doubt, and hence risk, usually encountered by oil and gas developers: finding a market for the product and the time taken to secure a buyer.

In minimising delays between discovery and delivery, the TRUenergy deal made an important contribution towards the rapid development of the Casino field.

The agreement provides for TRUenergy’s purchase and processing of a base contract quantity of up to 293 petajoules of gas, plus an option to take up to 420 petajoules over 12 years. It also has an option to process a further 105 petajoules over three years.