Empire Awards Operation and Maintenance Contract for Red Gully to Oceaneering Services

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Researched by Industrial Info Resources (Perth, Australia)--Empire Oil & Gas (ASX:EGO) (Perth, Australia) has awarded Oceaneering Services (Houston, Texas) the contract to commission, operate and maintain its Red Gully Gas and Condensate Processing Facility in Western Australia. This is the first major component of work that has been awarded to a non-Western Australian-based company.

Momentum Engineering (Perth, Australia) and Primero Group (Perth, Australia) were responsible for the design engineering and construction, respectively. However, Oceaneering is no stranger to Western Australia, as its team in Perth already operates and maintains six other facilities in the Perth basin. The company has a proven track record with local regulators and authorities.

Empire Oil & Gas says that Oceaneering's local experience and availability of technically trained personal will be vital to ensuring that the final stages of construction, commissioning and operation of the plant are successful.

Originally, Empire had intended to commission the plant in stages starting in January 2013, but now it intends to undertake commissioning of the entire facility once it is handed over from Primero Group at the completion of construction. This is expected sometime in March 2013.

Optimal production is expected to be reached quickly to maximise condensate yields from the Red Gully-1 and Gingin West-1 wells. These Jurassic-aged wells are very high in condensate, producing between 50 and 80 barrels of condensate per 1 million cubic feet of gas.

During testing, Gingin West-1 processed 7.5 million cubic feet (MMcf) of gas and 375 barrels of condensate per day. Red Gully-1 performed slightly better, with 12 MMcf of gas and 832 barrels of condensate per day.

The Red Gully Processing Facility is conveniently located approximately 3 kilometers from Western Australia's primary long-distance natural gas transmission pipeline, the Dampier Bunbury Natural Gas Pipeline (DBNGP). The operator of the pipeline, DBP (Perth, Australia), has constructed an inlet on the DBNGP that will be the tie in point for the Red Gully export pipeline.

Careful consideration was taken during the design phase of the project to ensure the processing facility would comply with both the gas requirement specifications of the DBNGP and the condensate requirements for the BP Refinery. The Red Gully facility is designed to remove most of the liquefied petroleum gas, such as propane and butane, from the condensate prior to being trucked approximately 150 kilometers (90 miles) to the BP Refinery in Naval Base, Washington.

Several components of the facility have been completed ahead of schedule, including the earthworks by Lenane Holdings (Perth, Australia) and the export pipeline being buried and pressure-tested by Thistle Fabrication (Perth Australia).

All gas produced at the Red Gully facility will be sold to Alcoa Incorporated (NYSE:AA) under an existing sales agreement for 15,000 terajoules of gas.

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