Armour Energy has started commercial sales of gas from its Kincora project in the Surat Basin.
“This is a major milestone for Armour and a further step in our evolution toward becoming a significant oil and gas producer in the Roma region,” chief executive officer Roger Cressey said.
“The Armour team and its contractors are proud to have restarted production from this long-established gas province, particularly at a time when the Australian eastern seaboard gas market is facing an acute supply shortfall.
“This is just the beginning for Armour in terms of gas production, and we look forward to contributing to the local region and more broadly to the east coast gas market as a steady and growing supplier for the long term.”
From this week, gas sales are targeted at 5 TJ/day, with gas being sold under the company’s gas sales agreement with Australia Pacific LNG.
Gas is presently being produced from the Newstead gas storage facility, processed and compressed at Kincora, then delivered to market through the downstream pipeline facilities.
The next stage of Phase 1 of the Kincora restart project will involve ramp-up of gas production from existing wells which are currently shut-in, with Armour planning to increase gas producton to 9 TJ/day.
Phase 2 of the restart project will involve drilling of new wells plus work-overs and stimulations of existing wells.
Armour said this, together with any necessary further work on the Kincora gas plant, would allow gas production to be ramped up to 20 TJ/day over the next 12 to 18 months.
The Kincora gas plant was among a raft of Roma Shelf assets Armour Energy acquired from Origin Energy in September 2016.