Gas company to continue plans to expand southwest drilling

ORIGIN Energy has outlined it will forge ahead with its plans to expand operations in the Western Downs which will result in hundreds more gas wells to be drilled and a new pipeline built.

Speaking at the 2020 Year Ahead Breakfast at the Chinchilla Club Hotel this week, Origin Energy general manager at Condabri, Talinga and Orana Assets Alexandra Kennedy-Clark said Origin and APLNG will continue with its plans on drilling hundreds of wells and delivering a new pipeline.

"We are looking to drill quite a number of wells - and with the wells comes the infrastructure, the gathering systems, the civil works, the electrical connects etc," Ms Kennedy-Clark said.

"There will be quite a lot of activity around the Talinga and Orana field.

"Also some activity happening in Dalwogan… which is new and we are doing some initial drilling to get a better understanding of that area.

"Looking beyond (2021), the Murrungama field… we will be developing that to supply that gas into local industrial customers… and then we will start moving out to the Ironbark areas and doing some appraisal and starting to map out what our development program will look like.

"Kainama that's looking to be beyond 2025 at this stage, that will require a pipeline connecting back to the Orana gas plant."

In 2021 Origin Energy and APLNG plan to have the following amount of wells at each asset; Inner Orion Rings 68 wells, Condabri Redrills 30 wells, Talinga East eight wells, Western Orana North 10 wells, Dalwogan North East Delineation seven wells, Alfredson Western Flank and Step out eight wells, and Riley Step out two wells.

Beyond 2021 there are plans to significantly increase those numbers to the following; Murrungama 28 wells, Condabri Western Step Out, approximately 70 wells, Dalwogan North, approximately 70 wells, Ironbark Appraisal Program 15 wells, Ironbark Phase One up to 100 wells, Outer Onion Rings, approximately 50 wells, Kainama, approximately 100 wells.

During COVID-19, Origin has experienced unprecedented volatility in their key markets (Japan customs-cleared crude, domestic gas prices, and National Electricity Market forward prices).

Ms Kennedy-Clark said the Japan customs-cleared crude price, which is the oil price that underpins the APLNG export pricing, has taken a dive in the past six months.

"It's a bit of context… for some of the headwind we will see here in the industry over the next few years," she said.

"At this point in time our revenue has been pretty stable because we have a lagging pricing when that comes affect so we are really going to start seeing the impact of this price coming through in the 2021 financial year.

"The domestic price also followed that downward trend… and that's being driven by a number of things.

"From an APLNG perspective most of our domestic prices are long term prices, long term contacts with fixed pricing, and we actually support 28 per cent of the east coast domestic market."

Ms Kennedy-Clark said Origin is looking forward to continuing to work and live within the region, and to supporting the region through their various partnerships.

"Over the past 12 months we had over 96 million spent directly into (the Western Downs region)," she said.

"We have a workforce of 226, and 128 of those live local.

"It's been a big project to transition the workforce to stay and live local as much as possible."