13/12/2018 - 15:31

Baker Hughes, McDermott for Equus

13/12/2018 - 15:31

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GE subsidiary Baker Hughes and McDermott International have been picked for front end engineering and design work on Western Gas’s Equus project, under a contract arrangement whereby they will see the project through to commissioning.

Andrew Leibovitch and Will-Barker are directors of Western Gas. Photo: Attila Csaszar

GE subsidiary Baker Hughes and McDermott International have been picked for front end engineering and design work on Western Gas’s Equus project, under a contract arrangement whereby they will see the project through to commissioning..

Western Gas, which acquired the field from US-based Hess Corporation in November 2017, said the project was on track for first gas in the 2024 financial year, with pre-feed analysis to be complete by the second quarter of 2019.

A final investment decision on Equus will be made in late 2019 or early 2020, although there is still work to be done to determine if the gas will flow to domestic markets or overseas as LNG.

The company said the 2 trillion cubic feet resource was enough to supply a quarter of Western Australian gas demand for 20 years.

Hess had previously floated a standalone LNG processing plant option, and then a tolling agreement via the North West Shelf Venture's Karratha plant, but neither eventuated.

McDermott International is a Texas-based oil and gas contractor, while conglomerate GE is headquartered in Boston.

Baker Hughes was acquired by GE in a worldwide deal about 18 months ago, and at the time the stated aim was to give a full service offering across the whole life cycle of energy projects.

McDermott senior vice-president for Asia Pacific, Ian Prescott, said the company had been collaborating with GE, and that this particular project benefited from vertical integration of a contractor.

"In close collaboration with BHGE, we are taking a holistic approach to field development from drilling, subsea, production facilities and an export pipeline to an LNG facility and onshore gas connection," Mr Prescott said.

"By more closely connecting each stage of the project, we aim to drive significant efficiencies and cost savings for Western Gas through the full life of the field."

Western Gas executive director Andrew Leibovitch said the design to install contract approach was the first time it was used on a project of similar size in Australia.

“We ran a very successful and well-received request for proposal process to identify a like-minded and collaborative service provider who could engage early and provide an integrated technical and project delivery solution,” he said.

Finding an anchoring partner to offtake gas and securing financing will also be necessary steps for Western Gas before a final decision.

There are a number of other energy projects in the pipeline in WA, including Woodside Petroleum’s Browse and Scarborough developments, Chevron’s Janzi/Io Compression, Gorgon stage two and Clio/Acme and onshore, Mitsui’s Waitsia expansion.

All up, they add to around $48 billion of investment.

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