McDermott and BHGE selected as development partners for Equus gas project in Australia

Source: press release, 12 December 2018

The Equus gas and condensate fields are located in the Carnarvon Basin, about 200 kilometres north-west of Onslow in Western Australia
The Equus gas and condensate fields are located in the Carnarvon Basin, about 200 kilometres north-west of Onslow in Western Australia (illustration: Western Gas)

McDermott International, Inc. has announced they, with Baker Hughes, a GE company, have signed a memorandum of understanding (MOU) with Western Gas Corporation Pty Ltd to be the exclusive development partners for the Equus Gas Project in Western Australia. The companies were also awarded a contract to support the planning phases of the project.

As part of this initial contract, McDermott and BHGE will work with Western Gas to advance the pre-front end engineering design (pre-FEED) and front-end engineering design (FEED) to final investment decision (FID). McDermott and BHGE’s joint venture, io Oil & Gas Consulting, will provide the pre-FEED support to deliver a technically robust and cost-efficient development plan. McDermott’s portion of the contract is classified as sizable (McDermott defines a sizable contract as between USD 1 million and USD 50 million).

Pre-FEED work will commence immediately and is estimated to be complete by Q2 2019. McDermott and BHGE will continue with FEED work thereafter.

Upon FID, McDermott and BHGE are expected to undertake the engineering, procurement, construction, installation and commissioning (EPCIC) of the entire field development scope under a separate contract. The scope will cover reservoir evaluation, drilling and completions, subsea, production facilities, an export pipeline, an LNG facility and a domestic gas connection facility.

“This project underscores the value of McDermott’s vertically-integrated capabilities and our collaboration with BHGE, who will leverage their broad portfolio to support the project,” says Ian Prescott, McDermott’s Senior Vice President for Asia Pacific. “In close collaboration with BHGE, we are taking a holistic approach to field development from drilling, subsea, production facilities and an export pipeline to an LNG facility and onshore gas connection. By more closely connecting each stage of the project, we aim to drive significant efficiencies and cost savings for Western Gas through the full life of the field.”

“It was important to us to engage with partners that could offer a full field development and execution solution that would help deliver an efficient development plan, enhance project economics and reduce time to first gas,” says Andrew Leibovitch, executive director for Western Gas. “BHGE and McDermott bring a wealth of global expertise, products and services to help drive efficiencies across the life of the field.”

The contract award will be reflected in McDermott’s fourth quarter 2018 backlog.