Perth innovation to unlock stranded oil

THE function performed by a large structure out the back of Perth Airport may not be immediately apparent, but it holds significant promise for smaller players in the world’s oil, gas and decarbonisation industries.

The 44-tonne tangle of yellow and red metal, valves and piping in question is an innovation by Perth firm Pivotree that could reduce the cost of developing small offshore oil and gas fields and improving carbon sequestration.

“This is a prototype unit we have constructed based on the Pivotree design, which has got all of the equipment needed to facilitate production of a single-well oilfield,” Pivotree managing director Chris Merrick said.

“There is no other equipment required aside from the tree and the permanent guide base.

“No spread moorings, no pipelines, no manifolds; all of that extra equipment is taken out of the design.

“You don’t need any other equipment or an installation phase, and no crane vessels before you get to that first oil, which is critical for the small end of town.”

Currently, oil and gas is extracted from the seafloor using separate mooring points and subsea trees, on top of manifolds, pipelines and platforms.

It is expensive and time consuming to install and decommission.

This method has been manageable for multi-billion-dollar global oil and gas companies working on large offshore fields: the Woodsides and Chevrons of the world.

However, the cost has proved prohibitive for smaller companies targeting smaller fields.

Pivotree’s system combines mooring and extraction infrastructure into one rotating subsea platform, which allows for floating tanker movement while tethered to the field.

It’s comparatively straightforward to install and decommission, which means one single cost and a more efficient setup and removal.

Last year, the American Association of Petroleum Geologists estimated basins in the North West Shelf contained discovered-but-undeveloped assets of 97 trillion cubic feet of gas, 350 million barrels of oil, and 1.6 billion barrels of condensate.

For comparison, 138 trillion cubic feet of gas, 3.1 billion barrels of oil and 2.6 billion barrels of condensate have been sanctioned for development.

Mr Merrick said there were about 25 small oilfields off the North West Shelf which could be tapped cheaply with reduced infrastructure costs.

“They are typically deposits of less than twenty million barrels and more than ten kilometres away from an existing host facility,” he said.

“What we’re trying to do is give them a tool that will allow them to come into production.

“(Australia) does not really have a small or middle part of the market anymore. It tends to be dominated by the larger players at the top end of town.

“What we’re hoping with this innovation is it reignites that desire at the smaller end of the market to get fields into production.”

Most of the interest in Pivotree to date is coming from the UK, where Mr Merrick said 1 billion barrels of oil were still stranded more than 10km away from tiebacks in what’s considered a larger market for small and mid-sized companies.

The product has been six years in the making.

Backed by private equity, sophisticated investors and high-net-worth individuals, prototype testing was finished in November last year.

Mr Merrick hopes to have a final international validation ticked off this year.

“That last technology qualification is not really stopping us from doing anything at the moment, but it will give us and the clients every assurance that we’ve done all of the engineering and every possible test that we can do,” Mr Merrick told Business News.

“We do have a pipeline of sales targets.

“Here in Australia, we have been lucky with IPB Petroleum, a small operator with a stranded resource offshore the North West Shelf.

“They have made a binding commitment to take one of these on for their Gwydion field.”

Mr Merrick intends to put his money where his mouth is by using Pivotree on two oil blocks in the UK over which another company of his, Harvester Energy, has title.

Back in Western Australia, IPB’s December report noted Pivotree’s cost-saving potential and low environmental impact as key to its decision to work with the company.

The other side of Pivotree’s sales pitch is carbon sequestration, and this is where the prototype out behind the airport will be put to work.

Another Merrick-run company, Sea-Quester, last year won a $500,000 state government grant to determine the viability of sequestering carbon emissions from the Kwinana industrial area into the South Perth Basin.

That would be done via a carbon harvesting vessel attached to a Pivotree unit on the ocean floor.

“We want to test Pivotree in CO2 mode, where we circulate the CO2 through the tree, through the systems, test all the sealing elements, test all the sub-components in that mode so that we can verify that it’s fit for purpose for carbon sequestration,” Mr Merrick said.

He said this use held high promise for carbon capture and storage, which had proved complicated so far for its major proponent in WA, Chevron.

“The technology is working perfectly, so the capture side works,” Mr Merrick said.

“It is just they’ve got issues with the reservoir that stops them injecting at the full rate.

“If they could have picked the best possible reservoir, rather than the one that was under their feet, I have no doubt they would be able to inject the full four million tonnes per annum they were supposed to.

“Anyone bashing Chevron should take a step back, really, because they are the only ones in Australia doing anything at the moment.”