Opening of East Spar gas field shows benefits of industry deregulation

26/11/96

The opening today of the $275 million East Spar gas field is proof of the enormous benefits now embracing the Western Australian resources industry as a result of the deregulation of the State's energy industry.

Officially opening the gas field from Varanus Island in the Carnarvon Basin today, Resources Development Minister Colin Barnett said the commitment to take the field into full production coincided with the Government's decision to deregulate the energy industry.

Mr Barnett said the East Spar gas field was now supplying the new gas-fired power stations feeding off the Goldfields Gas pipeline, a project which the Government had facilitated to bring about cheaper energy prices on the Goldfields.

"Energy prices on the Goldfields have been reduced by up to 30 per cent through the use of gas from the pipeline in comparison to diesel," he said.

"East Spar gas is being sold to customers using both the Goldfields Gas and Dampier-to-Bunbury pipelines and will, in many cases, be used in place of diesel for power generation.

"The East Spar joint venture partners - WMC, Ampolex, Apache Oil and Santos - have negotiated long-term contracts to supply gas to WMC Resources power stations along the pipeline route and to its nickel refinery in Kwinana, to BHP's Newman power station and to AGL for the Westlime project near Geraldton."

Mr Barnett congratulated the joint venture partners on their project and for their initiative in utilising world-first technology.

A unique feature of the project is the world's first unmanned buoy, which manages and monitors the subsea gas field. Located 40kms west of Barrow Island, the 360 tonne buoy controls the production from two wells piping gas to processing facilities on Varanus Island offshore in the Carnarvon Basin.

"The buoy and subsea gas metering modules were fabricated by Transfield at its Henderson facilities at Cockburn Sound, while the gas processing plant was built in modules at Clough Engineering's premises in Kewdale and transported to Varanus Island by barge," Mr Barnett said.

"In all, the Australian content for the project was 83 per cent, which is pleasing, given the strong national and international competition for work involving oil and gas projects.

"Construction of the project created 600 jobs, half of those on Varanus Island to erect the gas processing plant.

"Skills gained in construction of complex pieces of engineering underpin Western Australia's future prospects for further contracts in this highly technical area of oil and gas production."

The East Spar gas field development is a joint venture of WMC Resources Ltd (operator and 30 per cent), Ampolex (35 per cent), Apache Oil Australia Pty Ltd (20 per cent) and Santos (BOL) Pty Ltd (15 per cent).

Media contact: Justine Whittome (09) 222 9699