By Sarah Byrne

WITH its Bayu-Undan field maturing, ConocoPhillips is looking at cost competitive development options for its Darwin LNG facility, according to ConocoPhillips vice president exploration and development Frank Krieger.

Speaking to Oil & Gas Australia in Darwin at SEAAOC, Mr Krieger said the company was looking to backfill the facility, with the company anticipating a decision by mid-2017.

“We need to have a sufficient understanding of cost,” he said.

“The sooner the better in reality, but certainly that first quarter to mid-2017 is the place where we would see ourselves having an answer,” he said.

Greater Poseidon and Caldita-Barossa are the development options ConocoPhillips is currently considering for the backfill of its Darwin facility, with the company running the two development options parallel.

Mr Krieger said greenfield construction costs must come down significantly to justify expansion at Darwin LNG after the BayuUndan production sharing contract concludes in 2022.

“We are part way through the appraisal phase of our drilling programs. Speculation that we are in Pre-FEED or are about to announce a project are premature,” he said.

The Greater Poseidon field is about 480 kilometres north of Western Australia, located within the offshore Browse basin.

ConocoPhillips operates two exploration permits, WA 315 P and WA 398 P, with a 40 per cent interest alongside co-venturers Origin (40%) and PetroChina (20%).

The second phase of exploration drilling concluded in August 2014, with a technical review of the drilling results continuing throughout 2015, along with feasibility engineering of the two development options.

Located in the Bonaparte basin, CalditaBarossa is operated by ConocoPhillips (37.58%) with co-venturers Santos (25%) and SK Energy (37.5%).

In January this year the final well Barossa 4 was spudded.

Mr Krieger said discoveries at both Poseidon and Caldita-Barossa provide ConocoPhillips and its co-venturers opportunity to advance development.

“Leading development concepts leverage the Darwin LNG facility through backfill and a possible brownfield expansion opportunity.”

Commercial alignment with its partnerships and the cost of delivery were fundamental aspects of the projects that require consideration, Mr Krieger said.

“We have seen a significant downturn in price [commodity prices] and it [project costs] must follow.”

“And if it doesn’t, then what we will continue to see is projects in Australia unable to be competitive with the projects in the rest of our portfolio,” he said.

Mr Krieger said conversation around driving costs down has begun but at this stage the effect hasn’t fully taken hold.

“In the near-term, we will continue to focus on completing the appraisal process for Greater Poseidon and Caldita-Barossa.”

“We are collaborating with our peers, to discuss commercialisation options for their resources,” he said.