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It's a gas

Sunday, June 22, 2003
In the far north-west there is a truly awesome place that could hold the key to Australia's future. In this world that's burning oil like there's no tomorrow, Australia needs all the homegrown fuel supplies it can get. Well, off the Top End there are vast reserves of natural gas. Finding the gas fields was relatively easy. The hard part is recovering and processing this fabulous resource. It's also wildly expensive, but then everything about this business is big — including the risks, and the rewards.


TARA BROWN: I've just come back from the far north-west, from an amazing place that could hold the key to Australia's future. In this world that's burning oil like there's no tomorrow, we need all the home-grown fuel supplies we can get. That's where this area comes in. Off the Top End, there are vast reserves of natural gas. We know exactly where they are — finding the gas fields was relatively easy. The hard part's recovering and processing this fabulous resource. It's also wildly expensive — think billions upon billions of dollars. But then, everything about this business is big, including the risks and the rewards.

The land around Karratha in north-western Australia is more like Mars than Earth. Iron ore has made this place famous and very, very wealthy. But just off the coast, there are greater, hidden riches. This is the Goodwyn A platform, a $2 billion gas rig, and it's here that they've hit the jackpot. Two kilometres below me is a huge natural gas reserve where they're producing 34,000 tonnes of gas a day. Now, it might look like we're in the middle of nowhere, but in this place of colossal distances, the Western Australian coastline is just 135km that way, the hungry Asian market is just a 10-day boat ride in that direction, making the gas fields of the north-west shelf Australia's most valuable. For first-timers like me, the Goodwyn A seems precariously out of place, a mountain of metal on flimsy legs. But she is one of the biggest, most technologically-advanced gas production rigs in the world. She's operated by an Australian company, Woodside.

You do feel a little vulnerable, don't you?

GLEN BAJARS: Yeah, you do, yeah. You're hoping that this is not rusted down here out in the middle of the ocean and things like that.

TARA BROWN: Do you ever go fishing off here?

GLEN BAJARS: No fishing from here, no. You'd never want to fall in down there, that's for sure.

TARA BROWN: Glen Bajars is a 20-year veteran of gas rigs and Woodside.

GLEN BAJARS: Every time we drill a well, it's $50 million at least to drill that well, to put it down, and there's not necessarily going to be a find at the end of it there.

TARA BROWN: Here on the north-west shelf, the gamble for gas is paying off. Woodside runs two massive rigs, mining more than 20 trillion cubic feet of gas. In dollar terms, that's worth $200 billion. These long pipes tap the vast gas fields beneath the seabed.

GLEN BAJARS: They go down, some of them down as far as 8.2km worth of well, which is one of the longest rig wells in the world, and it goes down about 2700m and then deviates off for about 5km off to the side, parallel with the actual platform.

TARA BROWN: And how does a drill go like that?

GLEN BAJARS: How does a drill do that? I always think that it's actually black magic the guys that are actually doing this.

TARA BROWN: Sorcery or not, this is an amazing place. For me, everything about it is audacious. Fifty five thousand tonnes of steel strong enough to withstand fierce cyclones. Eighty men and women working 24 hours a day in highly hazardous conditions.
So effectively we're standing on a potential explosion.

GLEN BAJARS: Effectively you could say that we have got it, but that's what we actually … our business is to control that situation to make sure that we don't have a risk like that.

TARA BROWN: Have you ever had one here?

GLEN BAJARS: No.

TARA BROWN: Good news. Everything's geared towards safety. A visit is a rare privilege granted only under the strictest guidelines.

GLEN BAJARS: There's no mobile phones, no cigarette lighters, no torches, calculators, anything like that. We actually control all of those things to make sure that we haven't got any type of uncontrolled ignition.

TARA BROWN: It's a very restricted lifestyle. Does it take a special breed of person to want to work out here and to cope with it?

GLEN BAJARS: I think so. I think the people out here … it's a lot of pressure, like I said. They're living 1600km away from their families. It is a different type of person, it is a different lifestyle.

TARA BROWN: Work days are 12 hours, 14 days straight, then two weeks off.
They're not big rooms.

GLEN BAJARS: They're not big rooms. Obviously space is at a premium everywhere we are.

TARA BROWN: And there's no chance to let off steam with a beer after work. Alcohol's banned. But judging by the menu on the day we were on board, the crew doesn't go hungry. At times it's more like a cruise ship than a hard ship post.

GLEN BAJARS: You've played the Goodwyn Alpha golf course. Very few people in the world can say they've done that.

TARA BROWN: I know, it has to be one of the remotest, doesn't it?

GLEN BAJARS: It is the remotest — I'd say the most remote golf hole in the world without a doubt. I don't think you could get any better than this.

TARA BROWN: Back on shore, this is Karratha's $6 billion processing plant and this is where we get technical. Gas is piped in from the offshore rigs and then cooled to temperatures so low it turns to liquid natural gas, or LNG as it's called. The process shrinks the gas by 600 percent, making it easier and cheaper to transport to Japan and China.

Basically what we're looking at here is a huge refrigerator?

GLEN BAJARS: Absolutely. It's the same as your fridge, the same process at home as what your fridge is except it's a lot more complicated process, but it is basically the same refrigeration process.

TARA BROWN: And it's these monsters that turn our liquid gas into export gold. There are eight of these LNG ships on a non-stop round trip between here and Asia. Every load is worth another $30 million.

GLEN BAJARS: It's 125,000 cubic metres of LNG on board her and that's enough power to sit there and power the MCG lights for 24 hours a day for 22 years on board.

TARA BROWN: Gas is being shipped from here to Japan since 1989. It was only last year with great fanfare that a deal was signed with China. Our gas for 20 years, for $25 billion.

CLARE MARTIN: Darwin is a very cosmopolitan city. I don't think the rest of Australia really appreciates this.

TARA BROWN: So, not surprisingly, over in the Northern Territory, the Chief Minister Clare Martin is desperately spruiking Darwin as the new natural gas capital.

CLARE MARTIN: Our economic development and job creation is dependent so many times, in so many circumstances, on having an abundant and relatively cheap supply of energy. That's what gas is.

TARA BROWN: The gas reserves are certainly there. As well as the north-west shelf, there are huge undeveloped fields on Darwin's doorstep in the Timor Sea, one in particular, called Sunrise, which Clare Martin thinks could become the Territory's north-west shelf.

CLARE MARTIN: It's a very big field, Sunrise. It's eight trillion cubic feet of gas which, in anyone's terms, is big mobs of gas and so there would be capacity for some of that gas to be in an LNG plant. Other parts of it to fuel industrial development in the north and then more, perhaps, to join the national grid.

TARA BROWN: But there is a problem and, of course, it's all about money. There is a lot of gas off Darwin, but, unlike the north-west shelf, it's a long way off the coastline, at least 500km. To make it viable, the operators say they need to process the gas offshore, on huge, never-before-built barges, a floating liquid natural gas plant, shipping it directly to the export markets, and that would mean no gas here, no local jobs. Clare Martin's vision of a gas-driven boom might just be a pipe dream.

CLARE MARTIN: I fought very hard, the Territory fought very hard over the last 18 months to say that a floating facility was a tremendous loss in terms of revenue and jobs for Australia. I mean, it's not a rocket science argument, it's a very logical, sound, sensible argument and it's about time Australia stopped saying, "Let's dig it up and ship it off."

JOHN AKEHURST: We spend a lot of time trying to find solutions which are good for the nation.

TARA BROWN: John Akehurst is the CEO of Woodside, the Australian company wanting to develop the Sunrise field with multinational partners Shell and Philips. He says the huge distances and the shortage of local customers mean that Sunrise gas has to be processed offshore.

JOHN AKEHURST: Unfortunately that means that a lot of the spin-off benefits which everybody would like to see come to Darwin and Clare Martin, of course, particularly, would not transpire.

TARA BROWN: In dollar terms, what is the difference between processing the gas offshore and processing it on shore?

CLARE MARTIN: The figures are in the sum of about $15 billion additional to Australia, but in terms of the Territory, it would be the difference of about 4500 jobs.

TARA BROWN: But there is a consolation prize for the Northern Territory. A $27 billion contract has just been signed with Japan to bring gas to Darwin from a smaller field in the Timor Sea. That means a small processing plant over there in the mangroves, some local jobs and the hope of bigger things to come.

CLARE MARTIN: This is the first gas from the Timor Sea and once we get that first gas and a pipeline coming in from the Timor Sea, I believe it will open up the opportunities for more gas.

TARA BROWN: While Darwin's gas project is just beginning, the north-west shelf venture gets bigger by the day. So much so that you could become blasé about millions, billions and even trillions. For instance, they're building another one of those giant refrigerators at Karratha. The cost: $1.5 billion.

Do you ever talk in small dollars?

GLEN BAJARS: No, I mean everything on this site and everything on this project is very big as far as cost and expense. It's an expensive project to get up and running.

TARA BROWN: And out at sea they're spending $800 million on a new undersea pipeline so that even more gas can be pumped from the offshore platform. So just imagine the rewards — little wonder everyone's fighting for a cut.

Do you think people are really aware of how abundant it is, how much we have of it?

CLARE MARTIN: I don't think we are as a nation. I think we're aware that we've got lots of coal, brown and black coal, but not aware of how important gas is in our overall energy supply. I'd like to see it grow. Those who want to see clean, green energy supplies would like to see it grow and the best thing about it all, it brings dollars to Australia.

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