Jadestone Energy Inc, an independent oil and gas production company focused on the Asia Pacific region, announces new offtake arrangements for its Stag oilfield.
Jadestone’s 100% owned and operated Stag oilfield produces crude oil via a fixed leg, central processing facility platform, which, since the field’s original development, has been offloaded to a floating storage and offloading vessel (“FSO”), the Dampier Spirit, which is moored to a catenary anchor leg mooring buoy. In May 2020, the owner of the Dampier Spirit advised the Company of its intention to retire the Dampier Spirit later in 2020, and, as required under the terms of their agreement with Jadestone, they have been unable to provide a suitable replacement vessel.
As a consequence, the Company has developed a new operating strategy, utilising offtake tankers to directly offload Stag crude oil, in place of the existing long term leased FSO. To implement this strategy Jadestone has awarded a contract to a respected international tanker provider who will supply modern double hulled tankers, operated to the highest safety and environmental standards. This new operating model has significant environmental risk mitigants over the existing model, by eliminating the need for ship to ship oil transfers in field. These arrangements are expected to realise annual savings of approximately 20% over the current FSO operation.
The first offtake tanker is scheduled to arrive in the field coincident with the Dampier Spirit departure in mid September 2020. Ultimately multiple offtake tankers will rotate through the field on a schedule that optimises production continuity.
The new model has also required a change to the regulatory structure that was in place for the FSO. Jadestone has worked with Australian regulators, the National Offshore Petroleum Safety and Environmental Management Authority and the Australian Maritime Safety Authority (“AMSA”), to ensure the model complies with all relevant laws and regulations and to obtain their acceptance. This includes both the requisite updates to the Company’s safety case for the Stag asset, and agreement that the vessels should be regulated by AMSA.
Paul Blakeley, President and CEO commented:“I’m delighted with the new offtake arrangements that are being implemented for Stag, which will realise annual savings of approximately 20% over the current FSO operation, and which in turn will enhance the value of our booked reserves. At the same time, we are always mindful of our safety and environmental obligations and have arrived at a more efficient cost-effective solution that significantly reduces environmental risk.”