The Northern Territory government has declared the gas leak detected at Chinese oil giant Sinopec's Puffin oil field in the Timor Sea poses no threat to the environment.
The Northern Territory government has declared the gas leak detected at Chinese oil giant Sinopec's Puffin oil field in the Timor Sea poses no threat to the environment.
As revealed exclusively by WA Business News yesterday, Sinopec Australia has confirmed that it detected a "minor gas leak" from the subsea production facilities at Puffin, which lies about 50km north west of the Montara oil field which has been spewing condensate for almost ten weeks.
The leak at Puffin, which has been out of production since early May, was detected during a routine underwater inspection of the field's subsea facilities early last month.
Sinopec Australia general manager projects and operations Steve Kanthan yesterday told WA Business News that although the leak was considered minor it had been reported to the relevant authorities, the National Offshore Petroleum and Safety Authority as well as the Northern Territory Department of Primary Industry Fisheries and Mines.
"During routine ROV inspection, the Joint Venture became aware of an anomaly in one of the subsea production trees," Mr Kanthan told WA Business News yesterday.
"A minor gas leak from the subsea tree was noted. While this was minor in nature, the occurrence was reported to the relevant authorities, NOPSA and NTDPIFM as per the statutory reporting requirements. Remedial action may be required but is not considered to be of an urgent nature."
This morning, a spokesman for the Northern Territory primary industry department told WA Business News that the "miniscule" leak at Puffin was not a threat to the environment and that no oil had been released.
"The leak does not pose any threat to the environment in either its current form or the extremely unlikely event that the gas were to be suddenly released in bulk. It is an inert gas used to pressurise, not oil," the spokesman said.
The leaking Puffin 8 well was "very weakly pressurised", he said, meaning the well required a separate injection of gas to enable the oil to flow to surface. That injected gas was the material which had escaped.
Even if it all leaked out, the gas was inert and the well would still be secure, he said.
Furthermore, the leak would eventually stop of its own accord as the internal pressure in the well eased.
Nonetheless, he said East Puffin Pty Ltd, the Sinopec-controlled company which operates the Puffin joint venture, had informed the department that it would bring a rig in to de-pressurise the chamber and rectify the situation.
The time frame for this was not yet known. The spokesman said it was normal procedure to fix such a leak when a rig was in the area.
In a statement today, federal resources minister Martin Ferguson also stated the leak was minor and posed "no threat to the safety of people or the environment, or the integrity of the facilities, vessels or aircraft".
He said EPPL was preparing monitoring and management plans and had undertaken to repair the equipment as soon as practical.
Despite the apparently minor nature of the Puffin leak, it is already attracting further scrutiny of oil and gas operations off WA's far north coast, coming in the wake of the far more serious Montara spill.
It also represents a further and unwanted headache for Sinopec which has suffered a string of difficulties since it acquired a 60 per cent interest in the Puffin permits for $US560 million in mid 2008.
Developed by Melbourne-based partner AED Oil, which retains 40 per cent, in 2007, technical problems have consistently prevented the project from meeting its targeted production rates.
In May this year, Sinopec and AED suspended operations and terminated the contract of the production vessel operator due to a number of "material breaches" of its contract. AED last month said the breaches related to "serious matters of occupational health and safety and the environment".
The Puffin development involved several subsea oil wells connected to a charted floating production storage and offloading vessel (FPSO).
Puffin was initially intended to produce over 15,000 barrels of oil per day, but produced at less than half that rate during 2008.
Meanwhile, the costs to PTTEP associated with the oil leak from the Montara gas field have been presented the the Thailand stock market.
In a statement lodged today Thai-based PTTEP estimated the incident cost at Baht 5.174 billion (A$170 million) with expenses of Baht 1.762 billion (A$57 million)
The statement said on 21 August 2009, Montara field's H1 development well in Timor Sea of the PTTEP Australasia project experienced an uncontrolled leakage of oil and gas.
"The Group estimates incident cost totaling Baht 5,174 million and recognized as expenses for the three months and nine months periods ended 30 September 2009," PTTEP said in a statement.
"Such incident cost includes costs for drilling a relief well, environmental response, clean-up, and any costs in relation to the delaying in Montara project.
"The Group estimats the above cost based upon an assessment of information currently available. However, there is some expenditure which is in the process of negotiation with suppliers and there is significant uncertainty surrounding these issues.
"The resolution of these uncertainties may ultimately be on a different basis than presently assumed which could result in the actual cost being different than the current estimates. Expenses of Baht 1,762 million apart from total incident cost are classified as short term provision under current liabilities."
