The JV reached the agreement after receiving approval from the Australian Competition and Consumer Commission (ACCC) for joint marketing arrangements.
The JV agreed and signed Authorities for Expenditure to confirm the drilling of West Mereenie-26 and an immediate upgrade of the processing plant.
Given the delay in the commencement of drilling, the JV decided the best use of funds was to drill only one Stairway well and utilise the funds earmarked for the second Stairway well for a larger than envisaged plant upgrade.
The upgrade is aimed at increasing capacity from its present 25 TJ/d, of which 15 TJ/d is sold into the Northern Territory market, to a new capacity of 63 TJ/d, where 58 TJ/d will be sold as gas without adversely affecting current crude oil production.
“Ideally the plant upgrade decision should have been made in February to ensure the work was completed by the time the Northern Gas Pipeline became operational,”? said Central Petroleum Managing Director Richard Cottee.
“But Central was never, nor should it be, in control of regulatory approvals and while it will be tight Central, as operator, will use every endeavour to ensure the Mereenie processing plant has the capacity to sell 58 TJ/d of sales gas by the end of this year.”?
The Mereenie joint venture is a 50:50 split between Central Petroleum and Macquarie Mereenie, a subsidiary of Macquarie Group.