A decision by the province’s offshore regulator has paved the way for Husky Energy to move forward on plans to develop the South White Rose extension.
The Canada-Newfoundland and Labrador Offshore Petroleum Board announced Wednesday morning it has approved a development plan amendment that will use a subsea tie-back to connect the White Rose floating production, storage, and off-loading platform to the South White Rose Extension.
The project has an estimated cost of $1.2 billion.
“We are pleased with the continued interest from operators in expanding fields offshore,” said Natural Resources Minister Tom Marshall in an emailed statement. “This will help to support long-term growth and sustainability of the offshore industry in Newfoundland and Labrador.”
The South White Rose Extension, which will include six wells, is estimated to hold 33 million barrels of recoverable oil.
Twenty-four million of those barrels will come directly from the South White Rose Extension, with the remaining nine million barrels to come from the southern portion of the main White Rose field.
Some advance work on the project has already taken place according to Husky Energy spokeswoman Colleen McConnell. A drill centre was excavated last year to allow for the installation of subsea equipment.
With approval of the development plan amendment now in place, Husky will focus on the physical installation of equipment for the subsea tie-back.
“The way the program is going to work, it’s going to be developed in two phases,” said McConnell. “So Phase 1 will be the installation of gas injection equipment, and we’ll do that this summer, and then Phase 2 will be the installation of the oil production equipment, which will take place next summer.”
Of the six wells, three will produce oil, two will facilitate gas injection, and one will accommodate a water injector.
Technip Canada, the prime subsea contractor for the project, is co-ordinating installation of the gas injectors and production equipment. It had more than 100 people working on the South White Rose Extension during its last quarter.
“We’ll be extending the drilling contract because we’ll be drilling additional wells to support that work there,” said McConnell.
In terms of new work linked to the approval of the development plan amendment, G.J. Cahill will handle some of the fabrication work on the subsea structures for the project. Systems integration testing will also be done locally, according to McConnell.
“That’s when we bring all of the subsea components together in one place and make sure they fit and operate correctly before we put them on the seabed,” she said.
Vessels involved in the installation work will locally buy fuel, food and other resources necessary to operate, according to Mc-Connell. The first of those vessels is due to arrive in early July, and additional vessels are also due to reach St. John’s harbour to support work on the project.
Husky is now in the completion phase for drilling its first well at the South White Rose Extensions site. The company expects it will begin to produce oil in late 2014.
The South White Rose Extension was discovered in 2003. Other Husky oil assets in the area include the main White Rose field and satellite expansions at North Amethyst and the West White Rose Extension.
According to Husky’s website, all are located approximately 350 kilometres east of St. John’s on the eastern margin of the Jeanne d'Arc Basin.