A deal between the Western Australian Government and DDG Tubridgi has been signed that approves the construction of the state’s largest gas storage facility, which is expected to be complete by June 2017.
With an expected total construction cost of $69 million, the facility will utilise DDG’s depleted Tubridgi onshore gas reservoir, located about 30km from Onslow in the state’s North West.
The project is strategically located in close proximity to the Chevron-operated Wheatstone and BHP-operated Macedon domestic gas production facilities, and will be connected to the Dampier to Bunbury Natural Gas Pipeline by existing gas transmission laterals.
The Department of Mines and Petroleum’s (DMP) Executive Director Petroleum, Jeff Haworth, said the project would play an important role in enhancing energy security in Western Australia when fully operational.
“The Tubridgi facility will enable banking of unused gas to cover planned production facility outages,” Mr Haworth said.
The agreement provides for effective regulation in respect of safety, environmental and resource management associated with injection, storage and recovery of petroleum.
CITIC Pacific, developer and operator of the Sino Iron magnetite project at Cape Preston, will be the foundation customer under a 10-year gas storage agreement with DDG with options for a further five years.
DDG Tubridgi is currently negotiating with other companies in the region to sign additional contracts.
DDG Chief Executive Officer, Stuart Johnston, said, “The Tubridgi gas storage facility will benefit producers and customers alike who may require storage capacity to bank unused gas, smooth production profiles or to store gas to cover planned production outages.
“DDG has an outstanding reputation as a safe and reliable developer, owner and operator of critical gas infrastructure, and we look forward to ensuring these standards are continued on this project.”
Mr. Johnston said DDG was pleased with the support from traditional owners, the Thalanyji people, and local landowners during the project’s development.
“Support from government agencies, particularly DMP, has also enabled DDG to quickly progress to a final investment decision.”
The facility has a storage capacity of around 42 petajoules with daily injection and withdrawal rates of around 50 terrajoules per day.
One of the advantages of the project is that the reservoir is quite shallow at approximately 550 metres, meaning that the required injection pressures are low.