Vintage Energy ready to ramp up new Odin gas operations
Vintage Energy (ASX: VEN) is moving quickly to ramp up activities at its Odin-1 gas development in the onshore Cooper Basin after receiving all important start-up approvals from relevant officials.
Odin will become Vintage’s second successful commercial gas field under a strategy to supply the energy hungry Australian east coast after its Vali field came on stream earlier this year.
Vintage, the operator and a 50% interest-holder in permits ATP 2021 and PRL 211 with its joint venture partners Metgasco (ASX: MEL) (25%) and Bridgeport (25%), is now finalising plans to commence commissioning operations at Odin following receipt of approvals from the regulator to commission and operate the Odin-1 well.
Discovered in 2021
Located in licence PRL 211 in the South Australian section of the Cooper Basin, Odin-1 was discovered in 2021 and Vintage and its partners have already signed an agreement to supply gas to, Pelican Point Power, a joint venture between ENGIE Australia and New Zealand (72%) and Mitsui & Co Ltd (28%).
Under the contract, gas will be supplied from Odin from field start-up until 31 December 2024. Negotiations to expand on that initial contract are underway.
The Pelican Point power station is a 497-megawatt combined cycle gas power plant in South Australia operated by ENGIE and Mitsui.
The plant is regarded as a critical infrastructure asset for energy security and system stability in South Australia.
Significant supply upside
Vintage currently holds more than 40 petajoules of uncontracted 2P gas reserves connected to east coast markets which is available for contracting.
Notably, its Vali and Odin gas supplies are exempt from the $12/GJ price cap set by government regulators.
The PRL 211 JV is already considering the drilling of a second well at Odin, where Odin-1 is the only single completed gas well, while Vintage has already identified significant exploration potential around both of its fields.
Vali production still hampered
Vintage has confirmed that while gas production from the Vali gas field in ATP 2021 continues to supply a contract with AGL Energy (ASX: AGL), two of the wells in the field are still running into flow issues.
The restart of the Vali-2 and Vali-3 wells continues to be delayed by fluid in the well bores.
At Vali-2, the joint venture is awaiting independent interpretation of data from a memory production log tool (MPLT) which has been brought in to assess the zonal gas and water contribution in the well bore.
Results from this program are expected within coming weeks.
Vali-3 issues continue
Similar MPLT logging was initially proposed at the Vali-3 location but could not be performed.
Vali-3 commenced supply in March but was unable to restart after fluid accumulated in the well bore during a downstream 3rd party network outage prevented the resumption of stable gas flow.
Despite numerous attempts at fluid removal operations, the most recent being in the first week of September, production has still not been restarted from this well, which remains shut in.
The JV is now considering a number of potential remediation options to improve performance of the Toolachee producing zone in this well.
Another option being evaluated is the potential to produce from other gas bearing zones such as the Patchawarra formation.
Vali, which is located in Queensland, adjacent to the Queensland-South Australia border, was discovered in 2020 and in 2022 the JV signed its inaugural gas sales agreement with AGL.