VGP Technical Report 54 - Commercial feasibility of potential underground gas storage fields Onshore Otway Basin, Victoria

Category: Victorian Gas Program	Product Code: MP-R-162090
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Product description:

About the Victorian Gas Program:
The Victorian Gas Program (VGP) is a comprehensive science-led program, incorporating geoscientific and
environmental research to assess the risks, benefits and impacts of potential onshore conventional gas
exploration and production.

The program is also investigating the potential for further discoveries of onshore conventional and offshore gas in the Otway and Gippsland geological basins and assessing the feasibility of additional onshore underground gas storage in depleted reservoirs around the Port Campbell area.

The VGP includes an extensive, proactive and phased community and stakeholder engagement program, through which the results of the scientific studies are being communicated.

Executive summary:
The opportunity for further underground gas storage (UGS) in depleted gas fields in the onshore Otway Basin is being investigated as part of the Victorian Gas Program (VGP). There are currently three depleted gas fields used for UGS in Victoria. These sites are in the Port Campbell area in the onshore component of the Otway Basin.

AWT International (Australia) Pty Ltd (AWT) was engaged by the Geological Survey of Victoria (GSV) to assess the commercial feasibility of developing depleted gas fields for underground gas storage in the onshore Otway Basin. Six sites (Croft, Fenton Creek, McIntee, Mylor, Penryn and Tregony depleted gas fields) were selected through a ranking process (Bagheri, 2019) for static and dynamic modelling. Dynamic modelling was used to predict storage capacity, injectivity and deliverability to investigate the dynamic capacity of each site and to optimise potential development options for this study.

This commercial feasibility assessment estimated development and operational costs, and considered the potential financial return for three scenarios:

Field operations with third party processing
Field operations using the capacity of an existing plant for processing
Field operations using a new processing plant.

For this assessment, a commercial model was constructed, utilising key inputs from the dynamic modelling and other inputs from AWT to define and calculate key technical, revenue, cost and financial parameters. Outputs generated from the commercial model included aggregation of field combinations and commercial feasibility for stand-alone gas storage development and operation. This was in addition to the assessment of overall commercial feasibility, using an existing gas processing facility or construction of a standalone gas processing facility. An assessment of commercial viability was completed for individual fields in addition to combination cases, which aggregated fields using high capacity cases.

The results from the individual field cases indicated that:

Stand-alone field operations only cases were commercially viable for the McIntee, Mylor, Fenton Creek and Tregony depleted gas fields.
Integrated field operations and existing plant tieback scenarios provide more attractive commercial outcomes for all six fields as single field developments, due to efficient use of existing infrastructure.
Integrated field operations and new processing plant scenarios were not viable for single field gas storage development.

Combination cases provided better economic outcomes compared to the single field cases. Field aggregation provided significant value for commercialisation, including providing alternatives for commercial stand-alone development using independent new processing plants.

Bibliographic reference:
Lay, K.R., Veroba, G.A., Perkins, G.M.P., & Garnett, A.J., 2021. Commercial feasibility of potential underground gas storage fields Onshore Otway Basin, Victoria. VGP Technical Report 54. Geological Survey of Victoria, Department of Jobs, Precincts and Regions, Melbourne, Victoria.

Download:
The downloadable version of this report is supplied as (PDF 15 MB), Att A1 (ZIP 24.6 MB) & Att A2 (ZIP 6.5 MB).