Spar gas find to boost WA supplies

Western Australia's domestic gas supply outlook has received a welcome boost, with Apache Energy and Santos revealing an impending increase in reserves at their Halyard gas project now being developed.

Santos, a 45 per cent partner in the Apache-operated venture, today reported a bigger than expected 55m gas column in the Spar 2 well at Halyard, which flowed unassisted at a rate of 58 million cubic feet of gas per day, and 16 barrels of condensate per million cubic feet of gas.

Confirming the result was better than the partners' pre-drill estimates, Santos said it now expected recoverable resources at the Spar discovery to be significantly greater than the originally forecast 335 petajoules (315 billion cubic feet).

Furthermore, the well also returned 40m net gas pay in a deeper secondary target zone which flowed at a rate of 5 million cubic feet of gas per day.

The find is good news for local gas customers, as it will form part of the joint venture's Halyard development, now under construction, which will feed into Apache's Varanus Island production facilities.

Varanus accounts for around 35 per cent of the state's domestic gas supplies.

The $120 million Halyard development, due to start production next year, will produce up to 160 terajoules of gas per day, equivalent to around 15 per cent of WA's current daily demand.

Apache is in the midst of its biggest ever Australian investment program, with its $1 billion Devil Creek domestic gas project nearing completion and work on the BHP-managed $1.6 billion Macedon development also now underway.

It has also boosted output at Varanus by 20 per cent to 390 Tj/day, and hopes to exceed 450 Tj/day as projects such as Halyard are brought on-stream.

Santos is also a significant supplier to the WA gas market, mostly in partnership with Apache. It has significant stakes the Apache-managed John Brookes and East Spar gas projects, which feed into the Varanus Island facility.