Origin Energy Limited · ASX:ORG
Origin Energy — Technical Presentation (May 2014)
67 slides from Origin Energy's technical presentation, May 29, 2014
Slide 1: Origin-APLNG Operational Review and Asset Visit
Origin-APLNG Operational Review and Asset Visit David Baldwin, Chief Executive Officer LNG 29 & 30 May 2014
Slide 2: Important Notice
Important Notice Forward looking statements This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events. Such statements are not statements of fact and there can be no certainty of outcome in rel
Slide 3: Safety is our first priority
Safety is our first priority LNG TRIFR LNG TRIFR 8 2,500 7.3 7 2,000 6 Recordable Injuries / TRIFR Man Hours (x1,000) 5 1,500 4.7 4 1,000 3 2 500 1 0 Total Man Hours LNG TRIFR (Rolling 12 Months) 3|
Slide 4: Operational Review and Asset Visit
Operational Review and Asset Visit CONDABRI - Day 1 Site Tour: - Flyover of gas operations - Bus tour Condabri Central construction area - Wellhead - Water treatment - Gas facilities - Flyover of Curtis Island, Gladstone Presentations: Condabri Central - water and brine ponds, February 2014 - Upstre
Slide 5: Australia Pacific LNG has world leading operators
Australia Pacific LNG has world leading operators UPSTREAM – 71% complete DOWNSTREAM – 70% complete • Operated by Origin • Operated by ConocoPhillips • Over 16 years’ CSG production experience in • Over 40 years’ LNG production experience Australia • Using ConocoPhillips’ Optimised Cascade® technolo
Slide 6: Upstream Project Delivery
O origin Upstream Project Delivery
Slide 7: APLNG is progressing in line with budget and on track for first LNG in mid-2015
APLNG is progressing in line with budget and is on track for first LNG in mid-2015 … 2,000 Demand demand 1,800 Production 1,600 • Demand includes domestic 1,400 contracts, committed ramp Gas Production Rate, TJ/d gas sales and LNG contracts 1,200 • Opportunity exists to use 1,000 some or all product
Slide 8: Upstream Project Goals
Upstream Project Goals 1 • Health and Safety • Zero Harm 2 • Environment and Land • Honour our Commitments 3 • Safe & Operable Production System • Automation from central control room 4 • Project within schedule and budget • On track to support LNG trains 5 • Team effectiveness • Operations team rea
Slide 9: Upstream Project progress - 71% complete and on track
Upstream Project progress - 71% complete and on track at 30 April 2014 Upstream Operated Goals FY2014 Plan Actual Progress to 30 April 2014 First gas and water production from Reedy Q3 Accomplished May 2014 Creek (western area) Main pipelines complete Q3 Accomplished Condabri Central Train 1 commiss
Slide 10: Upstream development land, environmental and stakeholder management is progressing
Upstream development land, environmental and stakeholder management is progressing 1200 1000 18 330 397 800 Lease acquisition 600 969 400 766 700 Drilling and completion 200 Gas and water gathering 0 Approvals Gathering Drilling (well equivalent) Fully approved Compensation Arrangements Agreed Gathe
Slide 11: Upstream development implementation – Phase 1 operated well progress
Upstream development implementation – Phase 1 operated well progress – April 2014 • Western Fields • Eastern Fields Spring Gully Combabula / Reedy Creek Condabri Talinga / Orana 11 |
Slide 12: Upstream development implementation - Drilling and Completion
Upstream development implementation - Drilling and Completion Progress Update (30 April 2014): • 700 Phase 1 operated wells drilled • 587 Phase 1 wells completed • 11 drilling rigs • 7 completion rigs • 3 flush-by rigs Drilling Completions 12 |
Slide 13: Well head technology
Well head technology Key features that enable a wellhead separator to operate under a wide range of operating conditions include the following: 1. Automated Control System – includes instrumentation, communication/Telemetry to a 3D Model of APLNG Phase 1 Wellhead Separator central control room to en
Slide 14: Upstream development implementation - Gathering
Upstream development implementation - Gathering Progress Update (30 April 2014) • 791 drilling lease preps • 452 diameter-kilometres of flow lines installed (766 equivalent wells) • Installation of cable, gas and water High Density Polyethylene (HDPE) pipe to wells through trenching operations WHS S
Slide 15: Upstream development implementation – Gas and Water Facilities
Upstream development implementation – Gas and Water Facilities • All 15 compressor trains and modules in Queensland • Construction under way on all gas processing and water treatment facilities • First production wells in Condabri Central commissioned in August 2013, with gas flowing into gathering
Slide 16: Upstream development implementation - Pipeline
Upstream development implementation - Pipeline • Pipeline design features: 360 km 42-inch main trunk line and 160 km lateral pipelines to gas fields with 50 year design life • The main pipeline construction is complete including hydrotest • First gas (for commissioning) to Curtis Island expected 4Q
Slide 17: Upstream development implementation - Electrification
Upstream development implementation - Electrification • Power available in the East • Western region progressing supported by temporary power stations 275kV/132 kV Network Power Stations: “Wandoan South to Eurombah Transmission Project” EC 1 (27 MW) – equipment deliveries Forecast first transmission
Slide 18: Upstream development implementation - Water
Upstream development implementation - Water • Eastern water management systems are in place and operating, – Produced water connections between Condabri, Talinga, Orana and QGC Kenya facility completed – Treated water connection between Talinga and Condabri completed with Monreagh storage and Fairym
Slide 19: Commissioning and Operational Readiness
Commissioning and Operational Readiness
Slide 20: Well Commissioning Overview
Well Commissioning Overview 1. Well Commissioning Team resourced to meet 2 well/day capability • East/West development split now established with resources in place across both fields. Technical Lead and Delivery Manager roles now appointed and operational. 2. Well Delivery status (as at 9 May 2014)
Slide 21: Gas Facilities Commissioning Overview
Gas Facilities Commissioning Overview Eastern Region 1. Condabri a) Full commissioning team in place for Train 1 Condabri Central b) 100% of process systems achieved mechanical completion; instrumentation loop testing >97% complete c) Utilities fully commissioned 2. Orana a) Partial commissioning te
Slide 22: Pipelines Commissioning Overview
Pipelines Commissioning Overview 1. Pipelines a) Wet commissioning completed on Condabri Talinga water pipeline b) Orana Talinga water pipeline pre-commissioned c) Condabri Talinga high pressure gas pipeline hydrocarbon packed d) Condabri Lateral North pipeline pre-commissioned e) Woleebee receiver
Slide 23: Operations Readiness Key Focus Areas
Operations Readiness Key Focus Areas Current Focus Areas • Safe Start Up of Condabri Central with Pre-Start Up Safety Review scheduled end of May • Brisbane Control Room ready to commission increasing number of wells and facilities • Safety Management Plan implementation across new assets • Critical
Slide 24: Field Performance / Key Exploration & Appraisal Areas of Focus
Field Performance / Key Exploration & Appraisal Areas of Focus
Slide 25: Origin has over 16 years of CSG production experience
Origin has over 16 years of CSG production experience APLNG tenure in the Surat and Bowen basins at 30 April 2014 APLNG has prime acreage in both “sweet spots” in Queensland, with 2P reserves more than sufficient to cover gas requirements for all domestic contracts, as well as off-takes from both LN
Slide 26: APLNG has significant remaining development in high confidence areas
Looking ahead, APLNG has significant remaining development in high confidence areas with proven success … Gilbert Gully … followed by development expanding into greenfield areas ( ) 26 |
Slide 27: Maximum well deliverability considerably higher than current production levels
Maximum well deliverability considerably higher than current production levels indicate … • The operated wells to be drilled for Phase 1 are expected to produce around 1,200 TJ/d1, with an additional 200 TJ/d1 from non-operated assets • The observed maximum average well deliverability2 across operat
Slide 28: Typical Phase 1 Well Forecast
Typical Phase 1 Well Forecast Dewatering Stable Production Stage Stage Decline Stage • Typical phase 1 well forecast to have: Production Rate – peak gas rate 1-2 TJ/d Gas – peak water rate 500-1000 bbl/d – approx 50-70% of well’s Water reserves produced within first 5 years Time Spring Gully (pre-LN
Slide 29: Spring Gully Production Performance
Spring Gully Production Performance ... gas performance of new Phase 1 wells tracking well Spring Spring Gully Gully Phase Phase 1 – 1Average Gas RateWell Comparison Performance 1400 • Chart shows average performance Actual Gas Average (GJ/d) per well for the online duration of each well 1200 • Rate
Slide 30: Condabri Production Performance
Condabri Production Performance ... gas performance ramping up towards targeted rates Condabri –Condabri AverageGas Well Performance Rate • Chart shows average performance 900 per well for the online duration of Actual Gas Average (GJ/d) each well 800 • Actual production has been turned Adjusted Gas
Slide 31: Condabri Outlook
Condabri Outlook ... water performance lower than Talinga (as expected) but still very productive, expect gas performance to grow with time Condabri field ~6 months production Talinga field~5 years production Condabri Gas and Water Production Talinga Gas and Water Production 5000 5000 5000 5000 Maxi
Slide 32: Combabula/Reedy Creek early water rates
Combabula/Reedy Creek ...early water rates are in line with expectations Chart shows water Flow Test Results production rate More Productive observed during Water Rate (bbl/d) tested by completion rig completion operation This provides an indication of ultimate well performance Talinga wells produce
Slide 33: CSG Water – Update on Brine Solutions
CSG Water – Update on Brine Solutions Base case strategy for brine management Going forward, the focus is on the base (outlined in the EIS) is holding brine in case and Brine Injection ponds prior to storage in a mixed salt Optimization studies show that storage facility construction of a limi
Slide 34: Bowen E&A programme CY14/15
Bowen E&A Northern Bowen – programme CY14/15 Multi-well vertical pilots underway. Frac Pilots and Horizontal well pilots planned. • Looking forward, Exploration & Appraisal is focused on areas outside the core high confidence development areas • Objectives are to Spring Gully Flank prove up – Good r
Slide 35: Surat E&A programme CY14/15
Surat E&A Exploration programme Upside – Deep Conventional Test CY14/15 Walloons Low Perm – encouraging pilot results. Frac Condabri South – Pilots underway. Prove up reserves & secure tenure as PL 35 |
Slide 36: Sustain Phase
O origin Sustain Phase
Slide 37: Drilling continues in the Walloons and Spring Gully areas through to 2020
Drilling continues in the Walloons and Spring Gully areas through to 2020 … Development focused on Walloons and Spring Gully in period to 2020: • Moving out from, and infill drilling in, initial development areas • ~75% of wells in the Walloons • Low percentage of fracced wells • Focus on reducing d
Slide 38: Optimisation of Drill Complete Connect costs
A key focus of the sustain phase is optimisation of current Drill Complete Connect costs of approximately $3 million per well Opportunities for reducing Drill Complete Connect costs: • Process improvement • Contracting strategy • Technology and Innovations: • Horizontal drilling and other new well d
Slide 39: Extracting scale benefits to drive operating cost reductions
Extracting scale benefits, utilising new technologies and maximising productivity to drive operating cost reductions As more wells come online expect to realise scale benefits, driving down operating costs, with specific areas of focus to optimise activities: • Labour and associated costs $/GJ Decre
Slide 40: Metrics
O origin Metrics
Slide 41: First full year of earnings and cash flows from both APLNG trains expected FY2017
The first full year of earnings and cash flows from both APLNG trains is expected to be FY2017… • With the phased start up of Train 1 and Train 2, APLNG’s FY2016 financial results will be subject to the following factors: • The rate at which LNG production ramps up from ready for start up to full pr
Slide 42: APLNG Reference Information - Sales
APLNG Reference Information Reference information in respect of the APLNG project and operations Sales Reference Metric Source LNG Train Capacity 9.0 mtpa FID2 Presentation 4 July 2012 Contract LNG Export Volumes 8.6 mtpa FID2 Presentation 4 July 2012 LNG Export Contracts Terms 20 year contracted of
Slide 43: APLNG Reference Information - Opex and Project Finance
APLNG Reference Information Operating Expenditure Reference Metric Source Operating expenditure Key components comprise This presentation • Downstream liquefaction costs • Upstream operating expenditure includes: • Upstream well & facilities maintenance and reliability • Upstream field power costs R
Slide 44: APLNG Reference Information - Sustaining Capex
APLNG Reference Information Upstream Sustaining Capital Expenditure Reference Metric Source Upstream sustaining capital • Expect around 300 operated wells drilled This presentation expenditure per year in near term • Drill, complete, connect cost approximately $3m per operated well, with cost reduct
Slide 45: Downstream Project Delivery
Downstream Project Delivery
Slide 46: Curtis Island designated as an LNG precinct
Curtis Island has been designated as an LNG precinct by the State and Federal governments 46 |
Slide 47: APLNG Downstream Facilities
APLNG Downstream Facilities Liquefaction of natural gas is an established technology. The project utilises the Optimised Cascade Technology similar to the Darwin LNG project which has operated since 2006 • Two trains of 4.5 mtpa capacity, consisting of: – 6 General Electric (GE) Model LM 2500+ G4 dr
Slide 48: Optimized Cascade Process
Optimized Cascade Process 48 |
Slide 49: Downstream Project progress - 70% complete and on track
Downstream Project progress - 70% complete and on track at 30 April 2014 FY2014 Downstream Operated Goals Actual Progress to 30 April 2014 Plan First cryo modules set Q3 Accomplished: Feb 2014 Last Train 2 refrigeration compressor set Q3 Accomplished: Mar 2014 Complete loading platform for LNG jetty
Slide 50: Project Highlights
Project Highlights • Downstream project is on schedule – Engineering is effectively complete with no holds for construction remaining – Procurement is in line with plan. All major equipment has now been delivered and set. Minor critical items are expedited as necessary – All dredging is now complete
Slide 51: Downstream project current status - Construction
Downstream project current status - Construction LNG TRAINS MARINE FACILITIES • Train 1 construction approaching 60% • Piling has been completed. The loading arms complete. All equipment has been set. One have been installed module remaining (due to be set early June). • The jetty is expected to be
Slide 52: Downstream project current status - Construction
Downstream project current status - Construction Train 2 Cold Boxes loaded out for shipment Module 101DA delivered to site 52 |
Slide 53: Full operations
Full operations • Key data • 4.5mmtpa per train • ~730TJ/day gas rate per train • ~30,000m3/day of LNG per train • ~6 days to fill a Tank when one train running ~3 days to fill a tank when two trains running • Ship every 6 days with one train & 3 days with two trains • <12-14hrs to fill a ship (165,
Slide 54: Fishermans Landing Northern Expansion (FLNE) Bund Wall
Fishermans Landing Northern Expansion (FLNE) Bund Wall 54 |
Slide 55: Port of Gladstone Overview
Port of Gladstone Overview 55 |
Slide 56: Curtis Island Site – May 2014
Curtis Island Site – May 2014 Construction Facilities Accommodation Village RO/RO Control & Ramp Utilities Maintenance Ferry & Rock Causeway Train 2 Train 1 MOF Tank B Tank A LNG Jetty 56 |
Slide 57: Trains 1 & 2 Outside Battery Limits (OSBL) – May 2014
Trains 1 & 2 Outside Battery Limits (OSBL) – May 2014 57 |
Slide 58: Trains 1 & 2 Inside Battery Limits (ISBL) – May 2014
Trains 1 & 2 Inside Battery Limits (ISBL) – May 2014 58 |
Slide 59: Train 1 – May 2014
Train 1 – May 2014 Hot Oil Heater/Incinerator Area – Piping Installation Propane Refrigeration Area – Setting “Candy Cane” on Propane Suction Drum 59 |
Slide 60: Train 2 Area – May 2014
Train 2 Area – May 2014 60 |
Slide 61: Train 2 – May 2014
Train 2 – May 2014 Propane Suction Drums Set Compressor Substation being moved into position 61 |
Slide 62: LNG Tanks – May 2014
LNG Tanks – May 2014 62 |
Slide 63: Permanent Buildings – May 2014
Permanent Buildings – May 2014 63 |
Slide 64: LNG Jetty – May 2014
LNG Jetty – May 2014 Loading Platform & Trestle Loading Arms installed on Platform 64 |
Slide 65: Module Yard – April / May 2014
Module Yard – April / May 2014 Final Train 1 Module (Propane Chiller 101JA) & First Train 2 Module (Sub-Cooler 202 NE) shipped on 22 April Propane Condenser 202ND shipped 13 May 65
Slide 66: Curtis Island - May 2014
Curtis Island - May 2014 66
Slide 67: Thank you
Thank you