The oil and gas industry in Australia on March 10 launched an effort to work on ways to cut the costs of dismantling offshore oil and gas facilities at the end of their lives, a task estimated at A$50 billion ($38 billion).
Backed by BHP Group, Chevron Corp., Exxon Mobil Corp.’s Esso Australia, Santos Ltd. and Woodside Petroleum and others, the Center of Decommissioning Australia (CODA) aims to help the industry build local expertise, come up with dismantling plans and cut costs.
“We’re looking at A$50 billion of work over the next 50 years, so decommissioning represents a multi-generational challenge for Australia,” said Miranda Taylor, CEO of National Energy Resources Australia (NERA), an industry group coordinating the effort.
More than half of that work needs to begin within the next 10 years, according to a study done for NERA.
NERA sees opportunities to cut the estimated decommissioning costs by 35%, or around A$18 billion, while at the same time building up a local services industry to handle the task.
One major cost factor is that all equipment must be removed from offshore sites and disposed onshore—which currently means shipping all equipment to be disposed overseas.
“First, we’re looking at if we are to move to 100% disposal and recycling at the end of life, how do we do that in Australia,” said NERA’s decommissioning general manager, Andrew Taylor.
Companies could save A$2 billion by not having to transport materials to other countries, he said.
Firms could also save money by aligning schedules for decommissioning activities, so they could share the costs of bringing equipment from other countries to handle the work.
Other opportunities include repurposing oil and gas facilities for offshore wind farms, an idea Taylor said could work in the Gippsland Basin off southeast Australia.
($1 = 1.3016 Australian dollars)
Recommended Reading
Colonial Shuts Pipeline Due to Potential Gasoline Leak
2025-01-14 - Colonial Pipeline, the largest refined products pipeline operator in the United States, said on Jan. 14 it was responding to a report of a potential gasoline leak in Paulding County, Georgia and that one of its mainlines was temporarily shut down.
Colonial’s Line 1 Gasoline Service Restored, Company Says
2025-01-20 - Colonial Pipeline Co. stopped flows on the gasoline transport line following reports of a leak in Georgia.
MPLX Acquires Remaining Interest in BANGL for $715MM
2025-02-28 - MPLX LP has agreed to acquire the remaining 55% interest in BANGL LLC for $715 million from WhiteWater and Diamondback.
Kinder Morgan Acquires Bakken NatGas G&P in $640MM Deal
2025-01-13 - The $640 million deal increases Kinder Morgan subsidiary Hiland Partners Holdings’ market access to North Dakota supply.
Tallgrass, Bridger Call Open Season on Pony Express
2025-02-14 - Tallgrass and Bridger’s Pony Express 30-day open season is for existing capacity on the line out of the Williston Basin.