FLOW testing at Strike Energy Ltd's South Erregulla SE1 well near Eneabba has provided reassurance it will become the gas supply for the company's proposed urea fertiliser production plant at Geraldton.
SE1 Kingia sandstone flow testing since the start of the month had achieved one of the highest sustained flow rates in Perth Basin history, Strike told the Australian Securities Exchange (ASX) last week.
Pressure testing of the target Kingia sandstone had been "constrained" by the capacity of well testing equipment, Strike said, with "good quality gas composition", low impurities and no sand or water mixed with the gas.
It is banking on the SE1 well providing at least 350 petajoules of gas required as raw material and heating fuel for Project Haber, which proposes to produce 1.4 million tonnes per annum of granulated urea fertiliser at a manufacturing facility located in a Geraldton industrial estate.
"This excellent flow testing provides additional confidence that the Kingia gas discovery at South Erregulla is a large, productive source of low-cost, low impurity natural gas and that it can form the foundation of Project Haber's globally competitive nitrogen-based urea fertiliser," said Strike managing director and chief executive officer, Stuart Nicholls.
"In a time where undeveloped sources of gas are nationally and globally short, the significance of Strike's Perth Basin success continues to rise," he said.
Strike told the ASX it has been testing "producibility" this month from 15 metres of perforations across the Kingia sandstone gas reservoir from a depth of 4844 metres in the SE1 well.
The multi-rate test "has delivered excellent results that are reflective of the high-quality gas charged reservoir observed in the well's petrophysical and core analysis", it said.
It has produced a choke coefficient peak rate of 80 mmscfd (a million standard cubic feet per day - a commonly-used American gas industry measurement) and a sustained rate of more than 78 mmscfd.
This was measured at a 198 centimetres to 162cm choke, with flowing tubing head pressure of 2590 pounds per square inch (17,857 kilopascals) over a five-hour period.
Production testing at higher rates was limited by the testing package's pipework and the results indicate potential for the well to produce at unrestricted rates of more than 100 mmscfd, Strike said.
The flow testing to date "demonstrates high productivity from the field which can support a low-cost development profile", it said.
After final Kingia sandstone flow testing is completed, testing will start on the Wagina sandstone gas reserves found from 4072 metres and immediately overlaying the primary target Kingia Sandstone in SE1.
As previously reported in Farm Weekly, the Wagina sandstone gas discovery is similar to wells at the Beharra gas field, 14 kilometres to the west of SE1, where production over the past 20-30 years significantly exceeded original recoverable reserves estimates.
Earlier this year Project Haber was awarded Major Project Status by the Federal government because of its potential to reduce the carbon intensity of the urea used in Australian agriculture by 60 per cent.
Cheap natural gas is the key to local urea manufacturing because it represents about 70pc of production cost and is why Project Haber hinges on the success of Strike's SE1 gas to be piped to Geraldton.
Australia's only existing urea production plant in Queensland is set to shut at the end of the year because of gas supply shortage and rising prices on the east coast where, unlike Western Australia, none of the local gas supply has been reserved for local use (see story on opposte page).
Synthetic urea is manufactured by reacting natural gas, atmospheric nitrogen and water together at high temperature and pressure to produce ammonia and carbon dioxide.
These gases are reacted again at high temperature and pressure to produce molten urea which is cooled and processed into prills as fertiliser and for industrial use.
Further processing produces UAN (Urea Ammonium Nitrate) liquid fertiliser and SCR (Selective Catalytic Reduction) urea - the main component of AdBlue pumped into exhausts of most diesel trucks to clean up nitrous oxides.
Strike is currently negotiating an offtake agreement with United States fertiliser giant Koch, which is expected to give Koch sole access to the 1.4 million tonnes a year of granulated urea for the first 10-15 years of Project Haber production.
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