Western Gas selects McDermott and BHGE as development partner for Equus Gas Project in Australia

12/12/2018

HOUSTON -- 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.

Pre-FEED work will commence immediately and is estimated to be complete by second-quarter 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," said Ian Prescott, McDermott's senior V.P. 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," said 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.

Project details

The Equus gas fields are located about 124 mi (200 km) north-west of the Western Australian town of Onslow. The fields' water depth ranges from 3,280 ft (1,000 m) to 3,937 ft (1,200 m) with an anticipated downstream nearshore LNG facility and pipeline connection to the Western Australian gas market.

The Equus Gas Project is a development-ready asset with an extensive history of exploration and appraisal activities and development studies.

McDermott and BHGE have participated in the exploration appraisal drilling program and FEED studies with the previous owner Hess before Western Gas acquired the asset in November 2017. This includes BHGE's Gaffney, Cline & Associates having independently certified the contingent resource.

io has also performed a number of technical studies for Western Gas to assess development options. The MOU and the expected scope of work for the EPCIC were built on these past studies.

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