Addressing the CSG–LNG economic challenge with surface engineering solutions

Abstract

Since 2014, Australia’s LNG producers have seen a significant reduction in LNG price. To support ongoing profitability, the Australian CSG–LNG industry must reduce the cost of the additional surface infrastructure required to sustain gas production to their LNG processing plants. This paper explores how engineers can assist the Australian CSG–LNG industry to reduce the cost of that sustain phase surface infrastructure.

Through use of a case study, this paper concludes that the ability of the engineer to significantly reduce costs through detailed design optimisation and project execution are limited. To significantly lower costs, the engineer must be mandated to review and challenge the established upstream infrastructure design as part of a revisited concept select stage.

The revisited concept select stage should consider a philosophy that initially provides infrastructure with only the minimum functionality and capacity to ensure safe transfer of production fluids into the gathering networks. For any particular well, modular additions could be made to that infrastructure, if economically justified, based on the known performance of that well.

Through use of a minimal cost base design that is flexible and expandable, the engineer can allow for the unique performance of any particular well or field section without subjecting the project to the high cost of providing unnecessary infrastructure on each well.

To support the recommended approach, small and knowledgeable engineering teams who are willing to challenge the status quo and incorporate lessons from present operations will be required.