International Risk Consultants Pty Limited
Prepared for Department of the Environment, Water, Heritage and the Arts, October 2007
The most economically significant industries dependent on the Northwest Marine Region are those related to the exploration, production or export of petroleum (crude oil, liquefied natural gas (LNG), liquefied petroleum gas (LNG), domestic gas and condensate) and minerals (metals, mineral sands, diamonds, coal and salt). To assist in understanding the nature and extent of these industries, the Department has contracted International Risk Consultants (IRC) to advise it on the anticipated expansion of the petroleum and mineral exporting industries in the Northwest and related shipping, port and other marine infrastructure needs. The Department is interested to understand the potential implications for the marine environment of industry expansion so as to be able to better meet the information and referrals assessment needs of industry, while protecting the ecological health and conservation values of the Northwest Marine Region.
The Northwest Marine Bioregional Plan is currently in its first stage, which is development of a Bioregional Profile. A key component of the Profile is describing the regions ecosystems, heritage values and human uses. Gaining a better understanding of the human uses in the Region and their characteristics is essential in ensuring that any conservation measures that might be contemplated in developing the Bioregional Marine Plan are designed to minimise their potential effects on industries and communities whilst still achieving conservation objectives.
This document presents the anticipated petroleum and minerals industries expansion and reviews the environmental impacts of potential petroleum and mining developments in the Northwest Marine Bioregion as defined The Australian Government Department of the Environment and Water Resources (the Department) under Section 176 of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).
The Minerals Industry
Production of other key mineral commodities during 2005-06 included 11.5 million tonnes of alumina, 161 tonnes of gold, 191 000 tonnes of nickel and 244 million tonnes of iron ore (DITR 2006a). The sector is experiencing rapid growth and projections indicate that sector output is likely to grow by 50-75% over the next decade (Chamber of Minerals and Energy, 2005).
Currently, there are five operating iron ore export ports in the Northwest Marine Bioregion are Port Hedland, Cape Preston, Cape Lambert and Dampier.
WA accounts for 93 % of Australias salt production with centres in Dampier, Onslow and Shark Bay.
The Petroleum Sector
The Northwest Marine Region is the major region for the production of petroleum products (crude oil, liquefied natural gas (LNG), liquefied petroleum gas (LNG), domestic gas and condensate) with over 70% of crude oil and condensate production. The Northwest Marine Bioregion also accounts for over 90% of current Australian gas reserves.
In 2005-06 the total value of WA petroleum sales was $15.2b. This was a 23% increase over 2004-05 in spite of an overall decline in production as existing fields mature. The major contributor was crude oil sales (43.3%) followed by LNG (30.3%), condensate (18.1%), natural gas (4.6%) and LNG (3.7%).
LNG output from Western Australia could triple over the next 10 to 15 years to 150 million tonnes per annum. Growth in output was over 20% since 2005 and Western Australia holds an estimated 140 trillion cubic feet of gas reserves. The major LNG projects under development are summarised in Section 5.
The existing petroleum infrastructure and typical onshore and offshore facilities are presented and discussed in Section 4. There are currently five onshore oil and gas production facilities located adjacent to the Northwest Marine Region. These are the Woodside Energy operated Karratha Gas Plant on the Burrup Peninsula (Dampier), the BHP Billiton operated Turbridgi Gas Plant to the south-west of Onslow, and the island based facilities on Barrow, Thevenard and Varanus islands.
There are currently nine Floating Production, Storage and Offloading (FPSO) facilities and two production platforms with offloading facilities operating in the Northwest marine region.
The primary focus of petroleum exploration has been the offshore northern Carnarvon basin, where field development and infrastructure continue to grow. Planning is underway for 20 new petroleum projects involving a minimum $22 billion investment over the next few years. Most of the future oil developments come from Exmouth Sub-basin fields and contain heavy oil. The current boom in the liquefied natural gas (LNG) market underpins a number of LNG developments, and it is expected that industry will apply to develop other LNG projects in the near future. The majority of these oil and LNG developments are expected to come on stream during the coming decade. The likely expansion of the petroleum industries in and adjacent to the Northwest Marine Bioregion is summarised in section 5.
The northern Carnarvon basin at present is by far the largest producing basin in Western Australia with 97% of WAs oil and gas production. Western Australian sedimentary basins currently hold more than 80% of Australias discovered natural gas resources. The number of developed and producing fields has almost doubled over the past decade. Currently there are 67 producing fields.
A peak in oil production is expected around 2008-09 mainly attributable to the development of heavy oilfields in the Exmouth Sub-basin), though there is a sharp decline after this point. Between 2010 and 2020, condensate production from gas condensate fields will play a key role in maintaining WA liquid hydrocarbon production in the future. Since condensate production comes principally from LNG developments, the forecast decline in condensate production is much slower than the decline in oil production. Future gas production is committed to upcoming LNG projects.
The majority of WAs new oil developments are located in the Exmouth Sub-basin. These include a series of significant discoveries, namely, Enfield, Vincent, Pyrenees, Stybarrow and Laverda, which contain more than 48 GL (300 MMbbl) of heavy crude reserves. These fields are expected to come on stream before the end of this decade and their combined initial production is estimated at nearly 40 000 kL/d (250 000bbl/d).
The development of these fields represents a number of technical challenges. The oil in these fields is heavy (17E2° API), has relatively high viscosity (7E1 cp), and some of these fields have thin oil legs. As such, their production would decline very rapidly. These fields are situated close to an environmentally sensitive area: the Ningaloo Marine Park, which requires additional precautions in the development process.
Example projects presented are:
- Stybarrow-Eskdale Development (Operator, BHP Billiton)
- Pyrenees Development (Operator, BHP Billiton)
- Vincent Development (Operator, Woodside Energy)
WA's North West Shelf has estimated natural gas resources of more than 3168 Gm3 (130 Tcf). Australia is strategically located to supply LNG throughout the Asia Pacific region with LNG exports playing an increasingly important role in the Western Australian energy scene.
In the next decade several significant gas discoveries such as Greater Gorgon, Jansz-Io, and Scott Reef-Brecknock, each in excess of 560 Gm3 (20 Tcf), will be bought on stream supplying export LNG. These forthcoming developments include fields that were regarded as stranded gas when they were discovered 20 to 30 years ago.
While some of these gasfields contain significant condensate reserves, producing this condensate would depend on the timeframe of the LNG contracts. Fields with a low condensate-gas ratio (CGR), ie. less than 56 m3/Mm3 (10 bbl/MMscf), such as Gorgon, Jansz-Io, and Scarborough, would not have a significant contribution to condensate production. However, for Ichthys, with a CGR of over 280 m3/Mm3 (50 bbl/MMscf), and Brecknock fields, which are expected to have a combined daily condensate production of 12.7 ML/d (80 000 bbl/d) sustainable for more than 20 years, the contribution is much more significant.
Example projects presented are:
- Angel Development (Operator, Woodside Energy)
- Gorgon Development (Operator, Chevron)
- Jansz-Io Development (Operator, ExxonMobil)
- Pluto Development (Operator, Woodside Energy)
- Scarborough Development (Operator, ExxonMobil)
- Brecknock / Brecknock South and Scott Reef Development (Operator, Woodside Energy)
- Ichthys Field Development (Operator, INPEX)
- Perseus-over-North Rankin / Perseus-over-Goodwyn (Operator, Woodside)
- Goodwyn Western Flank Development (Operator, Woodside)
Currently uptake of Australias offshore petroleum exploration permits is at an all time record high with over 300 permits in operation. Indications are that this increase is likely to continue the new exploration areas for 2007 the Northwest Bioregion are shown in Figure 5.2.
Giant gas fields continue to be found in the Carnarvon Basin. Chevrons Chandon gas discovery, located west of ExxonMobils giant Jansz field and Woodsides Pluto gas discovery demonstrate that there are still significant hydrocarbon discoveries in Australia's offshore waters, and that the Carnarvon Basin is a world class hydrocarbon province.
Within the NW marine region there are three port authorities (Broome, Dampier and Port Hedland) which are autonomous bodies operating under the Port Authorities Act 1999 and reporting to the Minister for Planning and Infrastructure. The existing ports in the North West Marine Bioregion are: Port of Dampier, Port Hedland, Port of Broome, Port Walcott (Cape Lambert), Yampi Sound (Cockatoo Island), Koolan Island, Onslow (Airlie Island and Thevenard Island), Carnarvon (Cape Cuvier and Useless Loop), Wyndham, Derby, Varanus Island and Barrow Island.
An overview of the oil and gas trunklines connections between offshore facilities (NWS) including , size, length and summary notes is provided in Section 6.2
On both a global and national scale the NWS ports, in particular Dampier and Port Hedland, handle a large tonnage of mineral and gas exports. Other export cargoes include salt, manganese, feldspar, chromite and copper.
Presented are the major shipping routes in the NWS region and the distribution of types of vessel in the Northwest Region subregions during 2004 and 2006.
Section 6 presents an overview of the currently planned future and proposed ports and presents a generalised assessment of the main environmental aspects, values and sensitivities. Activities related to ongoing maintenance dredging and port expansion are presented for Dampier, Port Hedland, Cape Lambert/ Port Walcott , Ronsard Island, Cape Preston, Maret Island, Quandong Point.
There are a number of activities common to both mining and petroleum exploration and exploitation that may result in potential impacts to the marine environment. The typical environmental hazards associated with petroleum and mining activities are discussed in Section 7.