Waitsia FID due by end of 2017

PERTH (miningweekly.com) – The joint venture (JV) partners in the Waitsia gas project, in Western Australia, are expected to make a final investment decision on the Stage 2 development by the end of 2017.

The Stage 2 development could supply 10% of Western Australia’s domestic gas demand, some 100 TJ/d, for ten years.

“Feedback from potential customers indicates that gas from Waitsia Stage 2 is a welcome addition to the Western Australian domestic gas market because it increases diversity of producers and offers a low-risk onshore supply train,” said ASX-listed AWE CEO David Biggs.

Meanwhile, AWE and its JV partner Origin have approved the 2017 development activities budget for the Waitsia JV, which will include drilling of the final two appraisal wells required for Stage 2 of the project.

AWE has also started the tender process for Waitsia Stage 2 gas sales, and some bids have already been received, Biggs said.

ASX-listed Origin earlier this week announced plans to spin out its conventional upstream business, including its Perth basin assets.

Biggs told shareholders on Friday that a new entity focused solely on upstream exploration and production should be a positive for the Waitsia project, and that it was unlikely to cause delays to the project schedule.

“Origin was very supportive of the Waitsia gas project Stage 1A and the sales process for their Perth basin assets, recently concluded, did not impact the schedule. First gas was successfully delivered on time and under budget in August 2016.

“On the numbers provided by Origin, Waitsia will represent around 25% of the new company’s current estimated 2P reserves, and will therefore be a valuable growth asset in a post-initial public offering environment.”