Oil and gas firm Jadestone Energy has signed new offtake arrangements for its Stag offshore oil field in W. Australia as the FSO used to take oil off the Stag platform is set to retire.
Jadestone’s Stag oilfield produces crude oil via a fixed leg, central processing facility platform, which, since the field’s original development, has been offloaded to a floating storage and offloading vessel (“FSO”), the Dampier Spirit, which is moored to a catenary anchor leg mooring buoy. The FSO is owned by Altera (formerly known as Teekay Offshore).
According to Jadestone, in May 2020, the owner of the Dampier Spirit FSO advised Jadestone of its intention to retire the Dampier Spirit later in 2020, and, as required under the terms of their agreement with Jadestone, "they have been unable to provide a suitable replacement vessel."
As a consequence, Jadestone has developed a new operating strategy, utilizing offtake tankers to directly offload Stag crude oil, in place of the existing long term leased FSO.
"International tanker provider"
To implement the new strategy Jadestone said it has awarded a contract to "a respected international tanker provider" who will supply modern double-hulled tankers, "operated to the highest safety and environmental standards." Jadestone did not say who the tanker provider was.
"This new operating model has significant environmental risk mitigants over the existing model, by eliminating the need for ship to ship oil transfers in field. These arrangements are expected to realize annual savings of approximately 20% over the current FSO operation," the company said Thursday.
Dampier Spirit leaves mid-September
The first offtake tanker is scheduled to arrive in the field coincident with the Dampier Spirit departure in mid-September 2020. Ultimately multiple offtake tankers will rotate through the field on a schedule that optimizes production continuity, Jadestone said.
The new model has also required a change to the regulatory structure that was in place for the FSO.
"Jadestone has worked with Australian regulators, the National Offshore Petroleum Safety and Environmental Management Authority and the Australian Maritime Safety Authority (“AMSA”), to ensure the model complies with all relevant laws and regulations and to obtain their acceptance. This includes both the requisite updates to the Company’s safety case for the Stag asset, and agreement that the vessels should be regulated by AMSA," Jadestone said.
Paul Blakeley, President and CEO commented: “I’m delighted with the new offtake arrangements that are being implemented for Stag, which will realize annual savings of approximately 20% over the current FSO operation, and which in turn will enhance the value of our booked reserves. At the same time, we are always mindful of our safety and environmental obligations and have arrived at a more efficient cost-effective solution that significantly reduces environmental risk.”
Jadestone agreed to acquire the producing Stag oilfield, from Quadrant Northwest and Santos Offshore in 2016.