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Santos’ Fairview gasfield problem audit and cracks appear at Narrabri

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Pipeline signage on a high pressure buried gas pipeline in QLD (image by North West Protection Advocacy)

An audit by Queensland’s Petroleum and Gas Inspectorate revealed discrepancies between company and government reporting and appears to play down problems including leaking wellhead equipment and coal seam gas well integrity.

In May 2018, the Inspectorate was called in to do an audit of Santos’ wells in the Fairview gasfield. Top-level inspectors attended the Santos-owned Fairview gasfield to perform a one-day inspection.

Freedom of Information documents reveal that a complaint from the public was lodged with the Department of Environment and Science in March 2019. A coal seam gas well was filmed by the complainants as "visibly and audibly leaking gas".

The well, named Fairview 103, had an information tag indicating a problem that went back to 2014. The FOI also reveals that there was concern about publicity from the investigators.

Some FOI documents read:

'Can you allocate this one to [DES Officer]? There is some media interest. I’ll come to discuss.'

 

'As a result of the allegations contained in the activist YouTube video reportedly related to Santos FV103 the P&G Inspectorate inspected this site and a number of adjacent CSG wells.'

Fairview has long been regarded as Santos’ prized methane-producing gas field. Roughly 600 wells have been drilled of the 1,122 approved. However, there is now evidence that as the field declines in production, early shut-ins of gas wells are occurring, some possibly waiting for remedial actions. Previously high performing wells (~1TJ/d) are being replaced with lesser performing wells, thus a net decline outcome in production is occurring. 

Department of Resources (DNRME), led by Director of the Petroleum and Gas Inspectorate Brigadier William Date, conducted an audit of nine Fairview wells, calling for numerous corrective actions but concluded none were leaking and that there were no serious problems despite the obvious video evidence and Santos’ own tag.

 

According to Queensland Globe, a Government database, five out of nine inspected wells have since been listed as suspended/capped/shut in (or were possibly at the time of inspection) and most of the inspections occurred in the immediate vicinity of the Central Processing Plant known as GLNG Hub 4 at the end of Fairview Road.

The Department relies on gas operators to submit accurate information which then appears on Globe publicly, production data is submitted to the Department by operators every six months as required under legislation.

Maintenance issues identified

Some of the problems revealed by the community complaint triggered audit included:

  • Subsidence under pipework;
  • Occurrence of weeds and dry grass posing a fire hazard;
  • Potential for gas release;
  • Potential for component failure;
  • The need to implement a well integrity monitoring program;
  • Pressure Release Exhaust Valve need adjusting (several incidences);
  • Open ends on water discharge valves; and
  • Dust covers not in correct position (several incidences).

The inspection of the leaking well was reported as 'no reportable gas leaks identified during inspection'.

The FOI documents reveal that the P&G Inspectorate went to Fairview and met with the company before conducting their nine-well investigation. Santos are brought along with the complaint investigation every step of the way. The investigation was treated seriously, evidenced by the close involvement of the Inspectorate head, Bill Date.

Casing leaks and satellite data: leakage is systemic

In March 2019, wellbore repairs at Fairview were conducted by oil and gas industry well integrity service provider Wellcem. A published case study revealed problems with casing leaks and detailed a program to seal these leaks.

In September 2020, Mike O’Connell, CSG Drilling and Completions Operations Manager for Santos, said:

“Over the last two years Auscoil continued to provide efficient, safe and innovative operations in multiple FOAM-X campaigns and remedial cementing operations.”

Remedial cementing is undertaken to correct issues with the primary cement job.

Another company, Saltel Enterprises (who are owned by Schlumberger) published details of a technology known as expandable packers, sealing leaks caused by corrosion in coal seam gas wells in southwest Queensland.

Schlumberger said:

“Microbiologically-influenced corrosion seems to be systemic in the region, and other operators might encounter similar issues in their CSG wells.”

Despite this statement from industry leader Schlumberger, Santos told the Narrabri NSW CCC:

'Santos has had no instances of microbial induced corrosion (MIC) requiring casing remediation in its Queensland CSG operations.'

The Saltel article was then removed from the internet after it was published and shared publicly.

The ABC’s coverage of aerial monitoring using methane detecting technology shows visible evidence of methane in the immediate vicinity of CSG gas wells. The extent of the leaks across southwest Queensland is not known, companies that fix leaks are certainly active in the region.

The Queensland Government has set an emissions reduction target of net zero by 2050 and in the meantime has committed to reduce emissions by 30 per cent below 2005 levels by 2030. Since this target was set more gas projects have been announced.

MethaneSat is a satellite that is dedicated to monitoring methane emissions. The moment of truth will be arriving soon for the oil and gas industry in Australia. It will offer higher sensitivity measurement than any satellite, enabling high-precision tracking of emissions that others can’t see. It will turn its data around in days, and offer it free to everyone according to the website.

Cracks at Narrabri

It was previously exposed that high CO2 levels at another Santos gas field at Narrabri, which the company sought to conceal at its 2020 Annual General Meeting.

Santos has now acknowledged this CO2 problem in this statement to the Australian Stock Exchange concerning the Oil Search and Santos merger.

Analysts Grant Samuel & Associates has confirmed that the Hoskissons Seam – which was last year characterised as being only 5 per cent CO2 by Santos’ chair Keith Spence – is now 'predominantly high in CO2'.

This same report states:

'In June 2019, the project underwent a major review that resulted in a revised project development plan. The plan contemplates the multi-phased development of approximately 400 production wells.'

Santos had originally sought approval for 850 wells from the NSW Government.

The extent to which Santos appears to have misrepresented its potential gas production at Fairview and Narrabri to the ASX and investors is unclear regarding the risks and valuations. GLNG gas production is steadily declining but the company claims production is “steady” in its first quarter reporting.

Is the company limiting its disclosure about both its gas production capabilities and the emissions at these gas fields?

Community compliance cops in action

Uncovered gas field data discrepancies (like those detailed above on Qld Globe) have so far evaded the knowledge and scrutiny of regulators, investors and ASX.

When Santos decides to cut their losses at fields like Fairview, will the subsurface problems as evidenced above, have sufficient funding provisions available to remedy?

Will the maintenance problems be repeated at Narrabri and the job left to the community to expose?

At 30 December 2020, Santos had 1,965 producing coal seam gas wells and plans indicate they may have as many as 6,000 producing wells by 2035. 

The medium to long-term management of abandoned wells and the subsequent requirement to decommission may be cost-prohibitive for all companies, not just Santos, and these costs should be updated and provisioned while these companies have the financial means to cover them.

The community complaint about Fairview revealed an ageing gasfield in disrepair that the Inspectors would not have been aware of. The Inspectorate plan to conduct 1,250 inspections and 74 audits during the 2022 financial year covering just a small sample of the extensive Queensland gasfield operations.

One of the latest inspections has uncovered “night drilling crew members without the competency required under the safety regulation”.

At Narrabri, the EPA has a new officer tasked with overseeing the regulation of the industry and the community will continue their efforts to monitor what is happening on the ground. The Santos Annual General Meeting will be held on Tuesday 3 May.

Johanna Evans is currently campaigning for the State of NSW to become CSG free and for a statewide ban on unconventional gas. She is a volunteer for North West Protection Advocacy. You can follow Johanna on Twitter @jo_noCSG.

The FOI document, 'Gas Inspection Report', can be accessed here.   

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