A series of new projects off the North West Shelf of Western Australia are preparing for world markets.

A huge new supply of natural gas is making its way from the stranded category to the deliverable phase as major oil and gas companies prepare to commercialize Australia's supergiant fields within this decade.
The Alaska North Slope claims gas reserves at 25 Tcf, and another 9 Tcf of proved reserves is being readied for the Mackenzie Delta pipeline from Arctic Canada, probably by 2008. Russia's 105 Tcf Shtokman field in the Barents Sea is at least a decade away, but a group of oil and gas companies is preparing to put some 40 Tcf gas reserves into the market from Australia's North West Shelf.

A recent decision by Australian authorities allows ChevronTexaco to establish a two-train LNG plant on Barrow Island about 40 miles (64 km) off the coast of Western Australia has set in motion a US $7.2 billion investment program.

That program will develop fields as far as 85 miles (137 km) northwest of Barrow Island with the Jansz field, the farthest in a cluster of giant gas fields in the deepwater portion of Australia's Carnarvon Basin.
ChevronTexaco is operator for the Gorgon field, the first of the giants in line for development. It has agreed with production partners ExxonMobil and Shell to take 2 million tonnes of LNG a year from the plant for 20 years, starting in 2008. The LNG plant capacity probably will be in the neighborhood of 10 million tonnes a year. Gorgon field is about halfway between Barrow Island and Jansz field.

ChevronTexaco is one of the companies seeking approval for an LNG import terminal and regasification plant in Baja California in Mexico. "Growing North American demand for natural gas is widely projected to outstrip supply capabilities. Gorgon is well positioned to help satisfy demand on the West Coast of the US and Mexico. The greater Gorgon area is also ideally situated to meet growing demand in Asia," said John Gass, president of global gas for the major oil company.

Shell also has contracted for gas from the Gorgon complex. Shell Eastern already has a permit from the Mexican government for a $747-million terminal and regasification plant near Ensenada in Baja California that will produce 1 Bcf/d of gas for Mexican and US markets.

In addition, China offshore major CNOOC is negotiating to get into the Gorgon project. It typically takes an equity interest in projects that supply LNG to China. It already has interests in BP's Tangguh LNG project on Papua, Indonesia, and in Woodside Petroleum's North West Shelf consortium expansion anchored by the 12-Tcf North Rankin field offshore Australia.

A potential partnership with in the Gorgon LNG program will be good for Australia and China, said Wei Liucheng, chairman and chief executive officer of CNOOC.

Gorgon isn't the only gas source in this game. According to Western Australia government figures, stranded gas giants clustered in the Gorgon-Jansz area include:

• Gorgon with 18.4 Tcf of gas,
• Jansz with 15.5 Tcf of gas,
• Geryon with 3.3 Tcf of gas,
• Orthrus/Maenad with 1.2 Tcf of gas,
• Io/Eurytion with 5.8 Tcf of gas,
• Io South with 1.2 Tcf of gas,
• Iago with nearly 1 Tcf of gas, and
• Urania with 270 Bcf of gas.

ExxonMobil already is working toward production from Jansz field, which it operates in the 50-50 partnership with ChevronTexaco. To date, it has drilled three wells in the massive field. The Jansz-3 well tested at a rate of 72 MMcf/d of gas. ExxonMobil drilled that well in a water depth of 4,355 ft (1,328 m).
The company drilled the Jansz-2 well late last year to confirm the discovery well drilled in 2000 in permit area WA-18-R.

According to ExxonMobil, that well was drilled in 4,429 ft (1,350 m) of water and reach total depth at approximately 10,827 ft (3,300 m). Following completion of the Jansz-2 well, the partners said the wells indicated a field size of more than 760 sq miles (2,000 sq km) with a 1,300-ft (400-m) gas column. They said the complex contained approximately 20 Tcf of recoverable gas when combined with the Io South structure on ChevronTexaco block WA-267-P immediately southeast.

"Looking ahead, the potential for development of the Io-Jansz structure and the Greater Gorgon area offers great prospects for Australia and for customers throughout the Asia-Pacific Basin," George Kirland, president of ChevronTexaco Overseas Petroleum, said.

ChevronTexaco shares in gas resources off Western Australia total more than 25 Tcf of gas.
ExxonMobil is equally enthusiastic. "ExxonMobil is encouraged by the results of the recent production test. The Jansz field represents around 40% of the undeveloped, discovered gas resources in the deepwater Carnarvon Basin," Jon Thompson, president of ExxonMobil Exploration Co., said.