PLANS for new gas fields off the south-west coast are a step closer following a deal between two major exploration companies.
WHL Energy announced it had signed a binding farm-out agreement with AWE for an exploration permit over a 811-square-kilometre survey site in waters between Warrnambool and Port Campbell.
The multi-million-dollar deal will allow seismic testing of the permit area, known as Vic/P67, to start in November or December.
The testing, which won federal government approval in March despite protests by environmentalists, aims to refine mapping of the area.
Permission for the exploration comes with stringent conditions, including four “marine mammal observers”, who will board ships carrying out the testing. Air cannons will also be forced to either shut down or operate on lower levels if whales are sighted nearby.
The International Fund for Animal Welfare (IFAW) is still opposed to the project, yesterday describing the area as one of only five in Australia that are “whale hotspots” and warning it could affect the future of the south-west as a whale-watching capital.
The IFAW warned the testing would occur at a time when endangered whales were known to frequent the area.
“What is of particular concern is that the area earmarked for industrial development is the very place where 20 rare blue whales were sighted in November and a record 70 in December last year,” the IFAW said.
“Additionally, the numerous southern right whales observed just a couple of days ago at Warrnambool, will be the very same ones, along with their calves, passing through the area on their journey to the Antarctica, just as WHL’s seismic air guns start blasting, 24 hours a day and seven days a week.”
WHL has already finalised tenders for the survey and begun negotiations with a preferred seismic contractor.
The site contains the undeveloped La Bella gas discovery and multiple exploration targets nearby.
AWE already holds significant gas pipeline and processing infrastructure in the Otway Basin and holds a 25 per cent interest in both the Casino and Henry gas projects located near the exploration area.
Under the terms of the agreement, AWE will pay 75 per cent of the total cost, capped at $US9 million (about $A9.9 million ) to buy a high-tech 3D marine seismic survey over the La Bella field and surrounding targets.
Once the new seismic data is reviewed, AWE has the right to surrender its interest or commit to drilling two exploration wells at either 30 per cent or 60 per cent working interest.
“The La Bella gas and condensate field is located close to existing infrastructure which significantly enhances its development potential,” AWE managing director Bruce Campbell said.
“Gas prices in south-east Australia are expected to rise over coming years, making the economic case attractive.”