Origin Energy Limited · ASX:ORG
Origin Energy — Technical Presentation (October 2014)
67 slides from Origin Energy's technical presentation, Oct 31, 2014
Slide 1: Origin – Australia Pacific LNG Site Tour
Origin – Australia Pacific LNG Site Tour David Baldwin, Chief Executive Officer LNG 30-31 October 2014
Slide 2: Important Information
Important Information 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 relation to the matters t
Slide 3: Safety is our first priority
Safety is our first priority LNG TRIFR 7 2,500 6.0 6 2,000 5 Recordable Injuries / TRIFR 4.7 Man Hours (x1,000) 1,500 4 3 1,000 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 - Gas processing facilities - Water treatment facilities - Landowner visit - Flyover of Curtis Island, Gladstone Presentations: Condabri Central – gas processi
Slide 5: Australia Pacific LNG has world leading operators
Australia Pacific LNG has world leading operators UPSTREAM – 85% complete1 DOWNSTREAM – 82% complete1 • Operated by Origin • Operated by ConocoPhillips • Over 16 years’ CSG production experience in Australia • Over 40 years’ LNG production experience • Complemented by over 25 years of ConocoPhillips
Slide 6: APLNG is on track for first LNG in mid-2015
APLNG is on track for first LNG in mid-2015... 2,000 Turndown strategies expected to deliver opportunities through the ramp period to maximise value by retaining gas for future LNG sales Train 2 1,500 TJ/Day 1,000 Train 1 500 Domestic 0 Mid-2016 Mid-2015 Production Post Turndown Production Pre Turnd
Slide 7: Project progress - 84% complete at September 2014
Project progress - 84% complete at 30 September 2014 $bn 27.0 • Project costs have been incurred Train 1 Train 2 100% ahead of project activity, with non- 24.0 22.5 operated activity and spend 21.0 21.0 91% incurred ahead of APLNG operated 90% fields (% project complete 85% 18.0 17.2 measured using
Slide 8: Origin contributed $751 million to APLNG in September 2014 Quarter
Origin contributed $751 million to APLNG in September 2014 Quarter $m 1000 100% • In Q1 FY2015, Project capital expenditure has reduced 88% 89% 89% to 75% of Origin’s $751 million contribution to APLNG. This 86% 85% proportion will continue to reduce during FY2015 as the Project 800 75% 80% nears co
Slide 9: Field Performance / Exploration & Appraisal
FIELD PERFORMANCE/ EXPLORATION & APPRAISAL
Slide 10: APLNG's reserves base includes prime acreage in sweet spots
APLNG’s reserves base includes prime acreage in both known and industry accepted “sweet spots” in Queensland … PJ 100% APLNG Reserves and Resources1 20,000 15,000 10,000 5,000 - Estimated Requirements APLNG tenure in the Surat and Bowen basins at 3P 2P 1P 30 April 2014 Ramp and Tail Gas Train 2 Trai
Slide 11: Improved outcomes in development areas
Strong reserve increases from recent acreage additions, successful appraisal … Increased data density from development drilling improves understanding Successful appraisal to fill in ‘data gaps’ Accelerated maturation in recent acreage additions with results better than expected … and improved outco
Slide 12: Surat & Bowen Exploration & Appraisal Programme CY 15/16
Surat & Bowen Exploration & Appraisal Programme CY 15/16 targeting upside potential and application of new technology Bowen Low Perm Horizontal pilots to be drilled in CY2015. Reids Dome. Follow up drilling complete. Excellent results obtained. Pilot to be accelerated into CY2015. Walloons Low Perm.
Slide 13: Phase 1 planning assumes 1.2 TJ/d per well on average
Maximum well deliverability considerably higher than current production levels indicate given current turndown strategy… • 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 wel
Slide 14: Typical Phase 1 Well Forecast
Typical Phase 1 Well Forecast Dewatering Stable Production Stage Decline Stage • Typical phase 1 well forecast to Stage have: – peak gas rate 1-2 TJ/d Production Rate – peak water rate 500-1000 Gas bbl/d – approx 50-70% of well’s reserves produced within first 5 years Water – average well life is 30
Slide 15: Spring Gully Production Performance
Spring Gully Production Performance Gas performance of new Phase 1 wells continues to ramp up … Phase 1 Spring Gully Gas and Water Production Spring Gully Phase 1 Production 40000 20000 Uplift due to optimisation with 35000 fixing micro turbines 17500 30000 15000 Water Production (bbl/d) Gas Product
Slide 16: Condabri Production Performance
Condabri Production Performance Gas performance of new Phase 1 wells tracking well … Condabri - Average Well Performance 1200 Actual Gas Average 1000 Field turndown capability 800 • Chart shows average performance per well for the Average Gas Rate (GJ/d) online duration of each well • Actual product
Slide 17: Condabri Outlook
Condabri Outlook As anticipated, well deliverability has increased over the last 6 months … Condabri field ~6 months production Condabri field ~12 months production Condabri Gas and Water Production Condabri Gas and Water Production 5000 5000 5000 5000 Maximum Well Deliverability for Gas (GJ/d) Maxi
Slide 18: Combabula/Reedy Creek and Orana
Combabula/Reedy Creek and Orana For those fields with little production data, completion rig flow tests provide an early indication of well performance … Flow Test Results More Productive Water Rate (bbl/d) tested by completions rig Early data indicates Orana performance better than expected: • High
Slide 19: Non-operated joint ventures progress (QGC-operated)
Non-operated joint ventures progress (QGC-operated) Bellevue (ATP 610) • 63 wells put on production* • Bellevue CPP (220 TJ/d) – 100% complete (ready for start-up and has achieved forward flow) Kenya (ATP 620) • 260 wells put on production* • Kenya CPP (180 TJ/d) - online Kenya East (ATP 648) • 609
Slide 20: Non-operated joint ventures progress (GLNG-operated)
Non-operated joint ventures progress (GLNG-operated) Fairview (ATP 526) • 200 wells online • Hub Compressors 4 (250 TJ/d) & 5 (160 TJ/d) under commissioning Arcadia (ATP 653) • E&A work only Hub Compressor 5 ATP(150 631, 745 TJ/d) & 804 – under • commissioning E&A work only Non-operated costs and pl
Slide 21: Upstream Project Delivery
O origin UPSTREAM PROJECT DELIVERY
Slide 22: Upstream Project Goals
Upstream Project Goals • Health and Safety 1 • Zero Harm – Gathering system review underway • Environment and Land 2 • Honour our Commitments – Phase 1 essentially complete • Safe & Operable Production System 3 • Automation from the central control room is operational • Project within schedule and b
Slide 23: Upstream Project progress - 85% complete and on track
Upstream Project progress - 85% complete1 and on track Upstream Operated Goals HY2015 Plan Actual Progress to 30 September 2014 Orana Train 1 mechanical completion Q1 Accomplished Reedy Creek Train 1 mechanical completion Q1 Accomplished Orana Train 2 mechanical completion Q2 Accomplished Reedy Cree
Slide 24: Upstream development land, environmental and stakeholder management is progressing
Upstream development land, environmental and stakeholder management is progressing Phase 1 Operated Drilling (no of wells) 1,200 6 109 Landholder 1,000 agreements 75 800 Drilling and 600 completion 1086 Gas and water 988 gathering 910 400 200 0 • Activity is focussed on Sustain Phase work Approvals
Slide 25: Upstream development implementation – operated well progress
Upstream development implementation – Phase 1 operated well progress - September 2014 Western Fields Eastern Fields Spring Gully Combabula / Reedy Creek Condabri Talinga / Orana 25 |
Slide 26: Upstream development implementation - Drilling and Completion
Upstream development implementation - Drilling and Completion • 910 Phase 1 operated wells drilled (spudded)* • 856 Phase 1 wells completed* • 75 Sustain operated wells drilled* • 17 Sustain wells completed* • 11 drilling rigs • 7 completion rigs • 3 flush-by rigs Drilling Completions • Rigs shiftin
Slide 27: 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 central control room to enable operator assisted 3D Model of APLNG Phas
Slide 28: Upstream development implementation - Gathering
Upstream development implementation - Gathering • 959 drilling lease preps • 583 diameter-kilometres of flow lines installed (988 equivalent wells) • Installation of cable, gas and water High Density Polyethylene (HDPE) pipe to wells through trenching operations is ongoing • Cost optimisation for Su
Slide 29: Upstream development implementation – Gas and Water Facilities
Upstream development implementation – Gas and Water Facilities • All remaining modules in laydown or on site ready for construction • Construction of all facilities to support gas production for the start of up LNG Train 1 is complete • Condabri Central Gas Processing Facility and Water Treatment Fa
Slide 30: 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 • The main pipeline construction is complete and commissioned on the mainland • First gas (for commissioning) to Curtis Island expected in Q3 FY2015 •
Slide 31: Upstream development implementation - Electrification
Upstream development implementation - Electrification • Power operational in the East • Western region progressing supported by temporary power stations Western Region Electrification 275kV/132 kV Network Power Stations: “Wandoan South to Eurombah Transmission Project” EC 1 (27 MW) – construction un
Slide 32: 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 are operational - Treated water connection between Talinga and Condabri completed with Monreagh storage and
Slide 33: Commissioning & Operational Readiness
COMMISSIONING & OPERATIONAL READINESS
Slide 34: Well Commissioning Overview
Well Commissioning Overview 1. Well Commissioning Team now delivering 70+ wells per month across the development 2. First well commissioned at Reedy Creek in late May 2014, at Orana in early July 2014 and at Combabula in October 2014 3. Phase 1 Well Delivery status (30 Sept 2014) • East: 319 wells c
Slide 35: Gas and Water Facilities Commissioning Overview
Gas and Water Facilities Commissioning Overview Eastern Region 1. Condabri - Condabri Central Train 1 commissioned during June 2014 - Condabri Central Train 2 commissioned in mid October 2014 - Condabri South Train 1 pre-commissioning activities underway. Commissioning expected in March 2015 - Conda
Slide 36: Pipelines Commissioning Overview
Pipelines Commissioning Overview 1. Pipelines a) Ruby spur line and Condabri/Talinga pipeline commissioning complete b) Gas received into Main Pipeline South in October 2014 c) Condabri Lateral North commissioning complete and line packed d) Woleebee Lateral pre-commissioning in progress and commiss
Slide 37: Operations Readiness Key Focus Areas
Operations Readiness Key Focus Areas Current Focus Areas • Safe Start Up of Orana T1 and Reedy Creek T1 • Managing defects impacting production and safety from the Phase 1 project • Handover to operations for Condabri Central T1 – critical documentation and commissioning close out • Lessons learnt f
Slide 38: Sustain Phase
O origin SUSTAIN PHASE
Slide 39: 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 • Focus on reducing drill & connect costs and testing n
Slide 40: Targeting a 30% decrease in drill and connect costs
APLNG is targeting a 30% decrease in drill and connect costs through improved execution & design improvements… • Seeking a significant decrease in drill and Average drill and connect cost / well connect costs through: ($m/single vertical well) - Changed market dynamics on resources (people, contract
Slide 41: Targeting decreases in cost/GJ through new well concepts
APLNG is targeting decreases in cost/GJ and increased productivity through application of new well concepts… 1 Horizontal wells in Spring Gully deliver increased production/well. Increased drill costs offset by reduced connections 2 Multi-well pad & deviated drilling trials underway to target increa
Slide 42: Decreasing operating costs
In addition to operational readiness, the focus is on increasing well availability to drive down costs and increase production efficiency As more wells come online, we aim to realise scale benefits, driving down operating costs, with specific areas of focus to optimise activities: • Labour and assoc
Slide 43: Downstream Project Delivery
DOWNSTREAM PROJECT DELIVERY
Slide 44: Curtis Island designated as an LNG precinct
Curtis Island has been designated as an LNG precinct by the State and Federal governments 44 |
Slide 45: 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 and each train has: - 6 General Electric (GE) Model LM 2500+ G
Slide 46: Optimised Cascade Process
Optimised Cascade Process 46 |
Slide 47: Downstream Project progress – 82% complete and on track
Downstream Project progress – 82% complete1 and on track HY2015 Downstream Operated Goals Actual Progress to 30 September 2014 Plan Accomplished: September 2014 Complete loading platform for LNG jetty Q4 FY14 (no consequential impact to critical path) Inlet Air Chiller Package received on Curtis Q1
Slide 48: Project Highlights
Project Highlights • Downstream project completion at 82% at 30 September 2014 – Engineering and Procurement are both >99% complete – All materials needed for Train 1 start-up are now available with no impediments to construction – Construction manning is at peak and will remain at peak until Q1 CY2
Slide 49: Downstream project current status - Construction
Downstream project current status - Construction LNG TRAINS MARINE FACILITIES • Train 1 construction 77% complete (at 30 • All concrete pours are complete. Electrical works September 2014). All modules and major are complete on the loading platform and dolphins equipment have been set. Critical path
Slide 50: Construction
Construction Pipe and Cable Installation Progressing Hydro testing complete on both LNG Tanks 50 |
Slide 51: Full operations
Full operations • Key data 4.5 mtpa per LNG 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 & every 3 days with two trains <12-14hrs to fill a
Slide 52: Curtis Island - August 2014
Curtis Island - August 2014 52 |
Slide 53: Trains 1 & 2 Inside Battery Limits – August 2014
Trains 1 & 2 Inside Battery Limits (ISBL) – August 2014 53 |
Slide 54: Train 1 – August 2014
Train 1 – August 2014 Train 1 Pipe connections between Compressor Building and Module 101D (Cryo Coolers) 54 |
Slide 55: Train 2 Area – August 2014
Train 2 Area — August 2014 O origin
Slide 56: Train 2 – August 2014
Train 2 – August 2014 Large-Bore Spools Ready for Pneumatic Testing Setting Module 202NB (Propane Condenser) 56 |
Slide 57: LNG Tanks – August 2014
LNG Tanks – August 2014 57 |
Slide 58: Permanent Buildings – August 2014
Permanent Buildings – August 2014 Train 1 Compressor Control Building, Cable Pulling under Floor 58 |
Slide 59: LNG Jetty – August 2014
LNG Jetty - August 2014 O origin 59 |
Slide 60: Module Yard – August / September 2014
Module Yard – August / September 2014 Shipment of Propane Condenser Module 202NA – 9 August Cryo/AGRU Rack 202EA Shipped 19 September 60 |
Slide 61: Module Yard – October 2014
Module Yard – October 2014 Shipment of Inlet Air Chiller Loose Spools 3 October 2014 Cryo/AGRU Rack (202DB) & Methane/NRU Cold Box Rack (202GA) Sailed away 6 October 2014 61 |
Slide 62: Appendix 1 - Metrics
O origin APPENDIX 1 - METRICS 62|
Slide 63: First full year of earnings and cash flows from both 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 64: APLNG Reference Information
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 65: APLNG Reference Information
APLNG Reference Information Operating Expenditure Reference Metric Source Operating expenditure Key components comprise May 2014 site tour presentation • Downstream liquefaction costs • Upstream operating expenditure includes: • Upstream well & facilities maintenance and reliability • Upstream field
Slide 66: APLNG Reference Information
APLNG Reference Information Upstream Sustaining Capital Expenditure Reference Metric Source Upstream sustaining capital • Expect around 300 operated wells drilled per May 2014 site tour presentation expenditure year in near term • Drill, complete, connect cost approximately $3m per operated well, wi
Slide 67: Thank You
O origin THANK YOU
Origin Energy — Technical Presentation (October 2014) on 6ix