Kuwait Energy
EL-12-211107
46
KE plans to develop Siba with 17 wells (including Siba-1). This number is judged to be
sufficient to meet the required 9-year, 100 MMscfd plateau production given the best
estimate of GIIP. Well deliverability has been estimated based on the results of the 1993
and 2013 production tests in Siba-1. This may be a conservative estimate, since a larger
perforated interval could be envisaged in most of the development wells. On the other
hand, condensate deposition in the reservoir may reduce well productivity as reservoir
pressure falls. Overall, it represents a reasonable base case assumption.
KE has performed material balance modelling to estimate gas production forecasts based
on the low, best and high estimates of GIIP shown in Table 3.1. Gas volumes in the
material balance model are in fact reduced by 10-20% to account for volumes that may
not be drained by the wells due to limited connectivity within these heterogeneous
reservoirs. Initial CGR is taken as 95, 130 and 150 Bbl/MMscf in the low, best and high
cases, declining as reservoir pressure declines. In the low case, the gas volumes are
insufficient to maintain the plateau production rate for more than 3 years.
The planned Siba production facilities comprise wells and flow-lines to a central reception
area comprising two 60 MMscfd wet gas trains with sweetening, dew-pointing, LPG
extraction and condensate stabilisation, and export compression and pipelines. Key cost
estimates include:
US$19 MM for drilling and completing a development well;
US$30 MM for the deep exploration well;
US$315 MM total facilities and pipeline costs (from June, 2014 onwards, based
substantially on awarded tenders); and
Approximately US$9.5 MM p.a. OPEX (varying slightly with production rate) and
G&A costs of US$6.0 MM p.a.
Due to government delays in issuing permits, progress since the signature of the GDPSC
has been slower than anticipated. However, 280 km
2
of 3D seismic data were acquired in
2013 and processing and interpretation are expected to be completed by September,
2014. The CNPC Bohai rig was finally released from the port on 28
th
April after delays at
customs and drilling of the Siba-4 appraisal well spudded on 18
th
May, 2014. The well
services tender has been awarded to Halliburton.
The plan now is to drill seven appraisal/development wells (including Siba-4) in the period
2014-2016 and the remaining nine in 2018-2020. The deep exploration well would be
drilled in 2015-2016. Gas production is now expected to start at 50 MMscfd in July, 2015,
ramping up to the plateau rate of 100 MMscfd three months later.
On the facilities side, the pipeline route has been surveyed and construction has begun.
KE has elected to act as project manager for the development and has awarded a
“design and supply” contract for the main gas plant to UOP, a reputable manufacturer,
and contracts of similar type for the main equipment items (generators, pumps etc). This
“Fast Track” execution method is enforced by the limited time available.
FEED is complete, but the FEED scope excluded the gas plant (functional specifications
were used for the gas plant procurement). That means that things like QRA, HAZOP and
constructability are spread across multiple contractors, placing an additional technical
integration burden on KE. At present the EPC contract, which is really limited to
foundations, utilities and interconnections, is out for tender; KE expects to award the
contract in September, with work commencing in mid-October, 2014. The contract is
comprehensive, but KE has taken on the commissioning itself, with some allowance for
support from the EPC contractor. The EPC contractor will have overall responsibility but
