AUSTRALIA • CHINA • INDIA • JAPAN • NEW ZEALAND • ASIA PACIFIC
DIGGING&DRILLING November 2013 - January 2014 • Issue 6
AUSTRALASIA
AustralaSIA’s QUARTERlY Oil, Gas & Mining Magazine
Kipper Tuna Turrum Project ExxonMobil has announced the startup of the Kipper Tuna Turrum project in Bass Strait, Australia
Sorby Hills Project The WA EPA has approved ASX-listed KBL Mining’s development of the Sorby Hills silver/lead/zinc project
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Editor’s Letter I would like to congratulate Prime Minister Abbott and the Coalition for their election win and commend their recent announcement to develop a one-stop shop and single approval process under the Environment Protection and Biodiversity Conservation Act, between the Australian Commonwealth and the States. This change will greatly reduce the burden that green tape currently places on resources companies. We have seen some recent disappointing data from China and exports out of China are slowing but we are also seeing continuing strong growth in our Australian Iron Ore exports into China. Because Australia is such a low cost producer of Iron Ore, we will continue to attract markets for our exports. The good news here highlights our strong export volumes. The Shanghai Free Trade Zone in PR China was launched in late September, 2013 and covers almost 29 square kilometres on the eastern outskirts of this major city. Chinese leaders are expected to announce new policies to help the world’s second-largest economy achieve sustainable growth after three decades of rapid economic expansion. Deutsche Bank, Citibank, DBS, Hang Seng Bank, HSBC and Bank of East Asia have all recently received approvals from the Chinese regulator to start operations in the pilot, free trade zone. This initiative will inevitably benefit Australia.
Len Fretwell Publisher / Managing Editor Digging & Drilling Australasia
I would also like to congratulate Malaysian Chamber of Mines (MCOM) President Datuk Seri Dr Mohd Ajib Anuar on the establishment of the Malaysian Mining Club (MMC) launched on the 20th of August, 2013. Malaysia has mineral resources that are potentially worth RM340bil at current prices. Apache together with Mitsubishi, ConocoPhillips, PetroChina and Hess Corporation have invested in extensive Canning Basin permits and plan to drill two exploration wells next year, farming for shale gas. This has the potential to be a huge project for the partners and for Western Australia. We are always looking for interesting energy and resource sector news and innovation content and I invite you to contact me direct with any news that may be of interest to our readers. I hope you enjoy reading this Festive Season edition of D&D Australasia for 2013 and I look forward to your feedback.
Best Regards
Len Fretwell Publisher / Managing Editor
NOVEMBER 2013 - JANUARY 2014 DIGGING & DRILLING MAGAZINE 3
WHAT’S IN THIS 06» ISSUE
IN THIS ISSUE 3 EDITOR’s LETTER 6 MOMENTS IN PICS: KOMARINE 2013 IN BusaN 8 News in Brief: MINING News highlights for the month 10 News in Brief: Oil & Gas News highlights for the month 12 Caltex TecDiesel Advantage delivers real world benefits 18 Project PostCard: Atlantis to Install Tidal Power Farm in Gujarat 21 Kipper Tuna Turrum Project 24 Opportunities STILL FLOWING for Australian mining 28 SORBY HIILS Project 32 AUSTRALIA IN THE MIDDLE OF A GAS BOOM Digging & Drilling Level 28 AMP Tower Australasia 140 St Georges Terrace Perth WA 6000 P. O. Box 445, South Perth 6951 Tel: +61 1300 284 637 Fax: +61 (8) 9300 9435 Feedback info@diggingdrilling.com News inquiries editor@diggingdrilling.com Advertising inquiries len.fretwell@diggingdrilling.com • Mobile: 0417 001 080 Editor Len Fretwell Writers Robin whitlock, Stephen Dawson, ANDREW BURRELL GUEST Writers Kinsley Hayford Graphics Elvin Wong Subscription SUBSCRIPTION@diggingdrilling.com Publishing Digging and Drilling is a Trading name of LF Family Trust Information ABN: 97 893 623 301 VISIT US AT www.diggingdrilling.com COVER Caltex diesel delivery to mining customer Digging & Drilling Australasia welcomes comments and suggestions, as well as information about errors that call for corrections. We are committed to presenting information fairly and accurately. Disclaimer: Reasonable care is taken to ensure that Digging & Drilling magazine articles and other information are up-to-date and accurate as possible, as at the time of publication, but no responsibility can be taken for any errors or omissions contained herein. The opinions expressed are those of the authors and do not necessarily reflect the views of Digging & Drilling Magazine. The publisher, editors, contributors and related parties shall have no responsibility for any action or omission by any other contributor, consultant, editor or related party.
4 DIGGING & DRILLING MAGAZINE NOVEMBER 2013 - JANUARY 2014
OFFICE & WORKSHOP 49 Candlewood Boulevard, Joondalup 6027 Tel: (08) 9300 3135 Fax: (08) 9300 3236 Email: mark@mechbro.com.au
MechBro Australia has been set up to respond to the demand for Heavy Duty Diesel Mechanics and Fitters involved in the repair, maintenance and servicing of earthmoving, mining and transport equipment as well as light vehicles. Our business is based in Perth and also services regional areas, including the Pilbara. Our people are highly skilled and motivated to provide the highest level of service to companies throughout Western Australia. With a fleet of mine specified and fully equipped service utilities, we are unique in that we are not simply a labour hire company. Because with MechBro you don’t just get a capable individual, you get the strength of our entire team! MechBro’s team of mechanics and fitters are committed to the economic success of our customers. And so, before joining us, must demonstrate they possess the passion, skills and attitude required to satisfy our customers. Accordingly, we believe this set of values will help to ensure the mutual economic success of all parties.
Our People Whether it be a civil or mining project, every person on our team knows that to keep plant operating means productivity. We work hard and use our heads! As a collective, our team of highly skilled mechanics diagnose, repair and maintain a wide variety of plant and equipment, dozers, excavators, graders, scrapers, profilers, dump trucks, bobcats, heavy haulage road transport, etc. Our team has the experience, qualifications and equipment to work on all aspects of these machines including engine rebuilds, hydraulics, track and frame, electrics and air conditioning and on all brands, including, but not limited to; CAT, Hitachi, Komatsu, Terex, O&K, Volvo, Bell, Vermeer, Cummins. As a team of mechanics, fitters, servicemen and fabricators we keep machines going, as well as being involved in site mobilization where we establish containerized workshops complete with domes and commission machinery ready for operation. Upon project completion we demobilize workshops and plant and are often the last to leave site.
Throughout a project we are able to manage all parts ordering and delivery, including urgent hot shots. Our tilt tray can pick up and deliver parts and 20’ containers up to 8.5T.
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Where we’ve worked
Machinery and Vehicle Hire
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During the last 18 months we’ve worked at many major mine sites owned by BHPB, RIO, FMG, Sandfire Resources and more recently Onslow Quarry. Our people understand the rigorous requirements of working on these sites and act accordingly.
Mechbro can provide a variety of machinery and vehicles to suit your needs. MechBro currently have 6 mine specified service vehicles supported by a tilt tray truck capable of loading and unloading 20’ sea containers and moving items of plant up to 8 Tonne.
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Having established MechBro Pty Ltd on May 9th 2011, with 2 mechanics we have experienced rapid growth and now have a great team of mechanics and service men. In 2012 we also acquired a light vehicle workshop in Joondalup. Within the next 12 months we will be establishing a heavy duty workshop where we can service, repair and store larger equipment.
Our aim is to conduct our business using systems and practices which will ensure that our workforce and the community are protected from injury and harm. Safety and productivity go hand in hand with our people working as problem solvers to get the job done.
Workshop & Onsite Service We have the equipment and the facilities to service your machinery and vehicles. We will also invest in our business and tailor to your requirements.
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Moments
MOMENTS IN PICs »
KOMARINE 2013
6 DIGGING & DRILLING MAGAZINE NOVEMBER 2013 - JANUARY 2014
Busan in Pictures
NOVEMBER 2013 - JANUARY 2014 DIGGING & DRILLING MAGAZINE 7
NEWS IN BRIEF »
Mining News highlights for the month
KL OIL AND GAS (OnG) INVESTMENT ROAD SHOW
HIGH GRADE VEIN INTERSECTION AT PHILIPPINES GOLD PROJECT
By popular demand following the success of the recent 2nd Asian Mining and Energy Investment (AMEI) Forum http://ameiconference.com in KL in August 2013, ICAsia, in association with the Sabah State and Sabah Development Bank Owned Fund , SDB Asset Management Sdn Bhd, is staging a KL Oil and Gas (OnG) Investment Road Show at the KL Convention Centre in Malaysia on Wednesday the 20th of November, 2013.
Drilling intersects 2.5m @ 9.2 g/t gold including 1.0m @ 14.2 g/t gold downhole. Second hole underway to extend high-grade epithermal discovery along strike.
Registered delegates are invited at no cost to attend the International MIDA Forum - “Asian Era: Malaysian Perspective” on 19 November. Of special interest would be the oil and gas board room session from 2.00pm to 3.00pm on 19 November. For more information please visit: http://midaforum.com
High-grade gold mineralisation has been intersected by Perth-based Red Mountain Mining Limited (ASX:RMX, “Red Mountain” or “the Company”) at its Pica epithermal gold target, Lobo prospect, at the company’s Batangas Gold Project, 120km south of Manila in the Philippines. Diamond drillhole PC 07–13 intersected a steeply dipping epithermal quartz-barite-sulphide vein and produced an intersection of 2.5m @ 9.2 g/t gold (Au), 28.4 g/t silver (Ag), 8.6% Zinc (Zn) from 97.9m downhole, including 1.0m @ 14.2 g/t Au, 38.6 g/t Ag, 9.5% Zn.
Enquiries to: Jimmy Yong; email: jimmy@icc-australia.com.
Mountain Managing Director, Mr Jon Dugdale said “This is the best gold result achieved to date from the Pica target, and partially confirms the Exploration Target. Further drilling along strike will aim to extend the mineralisation prior to defining a high-grade vein resource.”
CARBON OFFENSIVE SHIFTS TO OIL BUT SPARES NATURAL GAS
Apache’s Bianchi wildcat finds gas off W. Australia
Oil is next in US President Barack Obama’s carbon offensive. With a regulatory barrage under challenge in court and Congress, the administration has been trying to slash coal combustion in the generation of electric power.
Apache Energy has made a natural gas discovery with its Bianchi-1 wildcat, which was drilled in retention lease WA-49-R offshore Western Australia.
NB: MIDA = Malaysian Investment Development Authority.
Now the president is pulling oil—without natural gas— into the line of fire. In a speech in Chattanooga, Tenn., he supported “accelerating our clean energy and natural gas revolutions.” Then he declared: “Now is the time to double down on renewable energy and biofuels and electric vehicles and to put money into the research that will shift our cars and trucks off oil for good.”
The find is within a separate fault block down-dip and 6 km northeast of the company’s April 2011 Zola-1 gas discovery and about 11 km north of the earlier Antelope find.Wireline logging and pressure testing confirmed 112 m net gas pay in Bianchi-1 in the Triassic-age Mungaroo formation.
SANTOS LNG Portfolio on Track
PAPUA NEW GUINEA - Indochine intersects high grade gold
Santos Ltd says its liquefied natural gas (LNG) portfolio is on track, as the group looks to unlock more of its resources.
NEW powers for health and safety representatives in all mines following the Pike River disaster are a “scary proposition” and should be limited to coal mines only, a gold mining company says. Bernie O’Leary, who manages Oceana Gold’s Macraes Mine in Otago, on Thursday, urged parliament’s industrial relations select committee to pare back the proposed new inspectors’ roles in the Health and Safety (Pike River Implementation) Bill.
Santos chief executive David Knox told shareholders at the gorup’s annual general meeting the LNG portfolio was critical to the business, but also flagged a new willingness to innovate. “The result is a very different Santos to the one you saw four years ago, but it will deliver significant value to shareholders,” Mr Knox said. “Our strategy to unlock the company’s resources and to do so safely, sustainably and profitably – will not change.
The bill includes recommendations from the Royal Commission into the Pike River Coal Mine disaster in November 2010 which left 29 men dead following explosions in the mine.
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NEWS IN BRIEF »
Oil & Gas News highlights for the month
SGX attracting new listings from oil and gas sector The Singapore Exchange (SGX) has been attracting a steady flow of new listings from the oil and gas exploration sector.
Mineral, oil and gas firms yet to be profitable can now list, but market capitalisation must be over S$300 million.
This follows a review of SGX listing rules to make it more attractive for such companies to float their shares here. The move has helped boost overall market liquidity.
Plans to progress to production stage must also be disclosed. Siri Wennevik, director of Wikborg Rein, said: “That gives those companies an opportunity to have a broader shareholder base, and also a commercial environment for the energy sector.
According to SGX data, total market capitalisation of these companies has quadrupled to S$3.6 billion from last year. There are now seven Singapore- “That has cemented Singapore’s position to get finance. Singapore provides the listed companies dealing in oil and gas corporate structure and set-up for global exploration and production. companies to fulfil their needs.” According to SGX My Gateway, KrisEnergy, RH Petrogas, Mirach Energy, The latest to be attracted to Singapore’s capital market is Linc Energy. Ramba Energy and Interra Resources are mainboard-listed, while Rex International On Wednesday, the Australian upstream and Loyz Energy are Catalist stocks.SGX is oil and gas company announced plans to looking to woo more of such firms going delist from the Australian market and forward. make a new home in the Singapore Exchange. To allow mineral, oil and gas firms to tap on Asia’s vast pool of liquidity within Analysts in research firms like DMG the SGX, the exchange announced new Research have upgraded the oil and admission rules for such firms, which gas service sector to overweight, from came into effect last week.
neutral. Jason Saw, research head (regional offshore and marine) at DMG & Partners, said: “I think clients are very picky right now. Our preference is for clients to stay with large rather than with small caps. “If you talk about one, two years ago, in the small mid cap space, we do see stocks with 50 per cent to 100 per cent upside. Not in today’s market. The big caps are having a better outlook over the 12 months, which is why we favour large caps right now.” DMG Research has also forecast Singapore rig builders to outperform earnings expectations next year, on top of recovering shipbuilding orders.
Retention Lease Approved Woodside Petroleum Ltd said on Friday changes to its Browse gas field retention lease that would allow it to pursue a wider range of development options have been approved. The company decided in April to shelve a plan to develop the gas field via a $45 billion onshore plant and said it would instead consider a variety of other options, such as a floating liquefied natural gas (LNG) plant or a smaller onshore plant. “The joint venture participants still need to actually choose a final concept for the development,” Laura Lunt, Woodside spokeswoman told Reuters on Friday. The variation to the Browse retention leases, granted by the state of Western Australia, will apply to the end of 2014.
Woodside and its joint venture partners in the development are widely expected to opt for a floating LNG plant. Analysts estimate that choosing to use floating LNG technology would mean a cost savings of 20 percent. Global energy firms have invested $140 billion into six LNG plants in just two and half years as Australia ramps up production on its way to becoming the world’s largest exporter of the clean burning energy source. But Australia’s LNG sector has seen investor interest cool due to cost overruns and with competition from North America, where new supplies of gas have been exploited from shale. Earlier this year, Woodside chief executive Peter Coleman said a floating facility has
“the potential to commercializes the Browse resources in the earliest possible time frame.” Woodside also signed a technology agreement to develop Browse using technology owned by Royal Dutch Shell. Shell, the second-largest shareholder in Browse and a 24 percent owner of Woodside, is considered to be the global frontrunner in developing loating LNG technology and has lobbied to use it to develop the Browse gas field. Other joint venture partners include BP Plc, PetroChina, Mitsui & Co and Mitsubishi Corp.
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OPEN AIR BOXES & CHAIRMAN’S FUNCTION Wine and dine in the stylish private Chairman’s function consisting of a three course meal of modern French & Italian cuisine with Mediterranean and Eastern influences - prepared with local & Australian produce. Enjoy the presence of VIP’S, players, special guests, senior management, club sponsors and celebrities.
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Caltex TecDiesel Advantage
delivers real
A new range of diesel products and services launched by Caltex Australia recently has been shown to deliver increased power output and potential fuel economy savings through improvements to injector cleanliness during independent tests designed to replicate Australian conditions. Caltex Acting General Manager Marketing & Distribution Leo Pucar said the Caltex TecDiesel Advantage program – a package of new products and services unveiled at AsiaPacific’s International Mining Exhibition (AIMEX) recently – was designed to help mining and commercial transport operators improve productivity and reduce costs.
“Diesel engine operators around Australia have identified a number of maintenance and performance challenges associated with the fuel and lubricants used in their vehicles and equipment,” Mr Pucar said.
a holistic and cost-effective package that includes three new advanced diesel products, along with fuel filtering processes, site-specific engineering solutions and a fuel-saving low-viscosity engine oil.
“Caltex has responded to these “Local independent testing, challenges by introducing the conducted by Orbital Caltex TecDiesel Advantage, Corporation in Western Australia, saw a six-cylinder common-rail Cummins QSK19 turbo-diesel engine operated using regular diesel and an accelerant to replicate a level of injector deposit build-up typical of longer-term engine operation.”
world benefits
to Australian industry
The engine’s performance, power output, fuel flow and fuel consumption were measured throughout the process, with tests then showing up to 78% recovery in lost power output and complete restoration of lost fuel flow through the injectors when the same engine was operated using Caltex’s new Active TecD fuel.
diesel engines, Mr Pucar said a number of new maintenance issues were adversely affecting the cost of maintaining a diesel fleet.
and Caltex Power TecD points to significant potential savings for operators of dieselpowered mining, transport and industrial equipment by reducing the likelihood of increased fuel consumption, reduced engine performance and significant repair bills associated with having to replace failed parts,” Mr Pucar said.
“With an increasing focus on maintenance costs, rectifying these issues continues to place pressure on the bottom lines of businesses, at a time when reducing costs and maximising machine utilisation rates has While fuel consumption never been more important,” The leading fuel supplier also gradually increased over many Mr Pucar said. announced the introduction of hours during the depositDelo 400 XLE Synblend 10WCaltex has also launched 30, a new low-viscosity diesel formation phase, this trend did not continue when using Clean TecD – a fuel filtered engine oil developed to further to exceed cleanliness levels reduce fuel consumption in Caltex Active TecD. recommended by the modern diesel engines. Injectors were also visibly Worldwide Fuel Charter by cleaner when using the new removing more microscopic Mr Pucar said mining and product and their improved abrasive particles compared commercial transport cleanliness was confirmed to conventional diesel – and customers could ‘Get the through restoration of fuel Power TecD, which combines Advantage’ by signing up for flow. the benefits of both Active the program. TecD and Clean TecD. While recent technological advances had delivered more “The research into products efficient and cleaner-running such as Caltex Active TecD
For more information, visit the Caltex TecDiesel Advantage website at www.caltex.com.au/tecd.
ARTICLE »
SACOME welcomes MOVE
to cut green tape
TO PAVE the way for crucial resources projects
Removing the duplication for environmental approvals by creating a one-stop shop would significantly improve the advancement of vital resources projects, helping to fast track investment and create jobs in the sector, according to the South Australian Chamber of Mines and Energy (SACOME).
T
he Coalition’s recent announcement to develop a one-stop shop and a single approval process under the Environment Protection and Biodiversity Conservation Act (EPBC) between the Commonwealth and the States will greatly reduce the green tape burden currently weighing on resources companies.
and Energy Minister, Ian Macfarlane MP, to address this if elected.
proposed Memorandum of Understanding are at the forefront of the State Labor and Liberal party’s minds in SACOME’s Chief Executive, the lead up to the 2014 March Jason Kuchel, says: “SACOME State Election, to ensure there applauds the Coalition for are no further delays on this delivering on their Election critical policy.” promise to introduce a onehas long stop shop for these matters, SACOME and will closely monitor the advocated for the States Government’s promise to cap to handle environmental the process to twelve months responsibilities as directed by which will progress many the Commonwealth, while still of South Australia’s projects maintaining the appropriate waiting in the pipeline.” checks and balances.
SACOME listed streamlining environmental approvals as one of its ten key Federal Election policy priorities, and obtained a commitment “We from then Shadow Resources the
will also ensure agreements and
14 DIGGING & DRILLING MAGAZINE NOVEMBER 2013 - JANUARY 2014
Mr Kuchel says a bilateral agreement accrediting key
approvals – including a “A study by the Australian “This would ultimately reduce Program for Environmental National University found costs and make investment in Protection and Rehabilitation that in the first ten years since South Australia more attractive, (PEPR) under the Mining the Commonwealth’s project in-turn creating more jobs for Act 1971 and Statement of approval laws under the EPBC the State without devaluing Environmental Objectives Act commenced, an extra $820 environmental protections.” (SEO) under the Petroleum and million had been added to the Geothermal Energy Act 2000 cost of approvals – for no extra – would see vital resources environmental protection. projects come online sooner “Bilateral agreements would in South Australia. streamline the environmental “At present, resources approvals process, eliminate companies are exposed to a process duplication, reduce costly, drawn-out, duplicated assessment and approval process that has driven up timeframes and provide development costs and decision-making clarity and delayed prospective projects,” consistency. Mr Kuchel says.
Westsea Solutions
Providing Tugs & Barges for
WA-based company Westsea Marine is working with Saipem-Leighton Consortium(SLC) to supply vessels and barges for the Chevron-operated Gorgon project.
technologies and a modern fleet of vessels, we are the preferred provider of offshore support vessels in the oil and gas industry.
Westsea is a trusted partner, acknowledged and depended upon for our experience and capabilities. Combining a dedicated and highly skilled team with innovative
Westsea Marine is supplying 28 vessels comprising of Work Barges, Anchor Handling Tow Tugs and Support Vessels, to support the construction of the 2.1km LNG jetty and marine structures at Barrow Island, off the north coast of WA.
16  DIGGING & DRILLING MAGAZINE  JULY 2012
Our know-how, expertise and marine experience delivers innovative and cost effective solutions to our clients across the oceans in the most challenging offshore environments.
Marine Solutions. The total value of the contract is in excess of $100 million, with the first phase of vessel deliveries already being completed earlier this year. The SLC contract includes the construction of the LNG Loading Jetty, Heavy-Lift Facility and Tug Pens at Barrow Island to facilitate the transport of LNG to international markets. Westsea Marine has been involved in providing offshore marine solutions and vessels in Australia since it was established in 2002. The company is proud to continue being a part of the Gorgon project, and is already providing quality marine equipment for Preliminary Works and the Materials Offload Facility Wharf Construction phases.
Westsea Marine started its operations in Perth, WA, providing specialised offshore marine solutions to serve its Australian-based clients with a nationally compliant fleet of ocean going towing tugs, anchor handlers and work barges. The Gorgon Project is a joint venture between the Australian subsidiaries of Chevron, ExxonMobil, Shell, Osaka Gas, Tokyo Gas, and Chubu Electric Power. For more information, visit:
www.westseamarine.com
Deployment of Westsea Marine vessels on the Gorgon Project, utilizing the Westsea Anne Marie, Westsea Kestrel, Westsea Hawk, Westsea 3006 off Barrow island WA.
Westsea Gail mobilising Westsea 79 - 300ft Rock Barge For Gorgon LNG Jetty Construction Project
r My Africa: Kenya POSTCARD PROJECT»
18 DIGGING & DRILLING MAGAZINE JULY 2012
Tildal Power Atlantis to Install Tidal Power Farm in Gujarat, India
JULY 2012 DIGGING & DRILLING MAGAZINE 19
FEATURE ARTICLE»
ExxonMobil has announced the startup of the Kipper Tuna Turrum project in Bass Strait, Australia.
Kipper Tuna Turrum
Project
NOVEMBER 2013 - JANUARY 2014 DIGGING & DRILLING MAGAZINE 21
FEATURE ARTICLE»
Kipper Tuna Turrum
Project
“The project has had a positive impact on the Gippsland and Victorian economies, generating work for local suppliers and contractors. “
22 DIGGING & DRILLING MAGAZINE NOVEMBER 2013 - JANUARY 2014
N
atural gas production has commenced from the Tuna field via two new pipelines, and oil is being produced from the Turrum field through the new Marlin B platform. Operated by ExxonMobil subsidiary, Esso Australia Resources Pty Ltd, the AU$ 4.5 billion Kipper Tuna Turrum project is the largest domestic oil and gas development on the eastern seaboard.
“The Kipper Tuna Turrum project will help secure east Australia’s energy future, and holds enough energy to power a city of a million people for 35 years,” said Richard Owen, chairman of ExxonMobil Australia. “Development of Australia’s natural gas resources will also yield significant environmental benefits. Natural gas is cleaner-burning and, when used to generate electricity, can reduce carbon dioxide emissions by up to 60%.”
The project has had a positive impact on the Gippsland and Victorian economies, generating work for local suppliers and contractors. Owen explained that 1300 full time jobs were sustained during the construction and installation phase, and that the Australian content for the project has reached an estimated AU$ 2.8 billion. Production from the Kipper Tuna Turrum project will help maintain current gas production levels from Bass Strait, which have been producing for over 40 years.
NOVEMBER 2013 - JANUARY 2014 DIGGING & DRILLING MAGAZINE 23
FEATURE ARTICLE»
Opportunities
STILL FLOWING. . . With growth in Australian mining investment slowing, the resources sector is shifting towards operational management and existing resources rather than new investment. This means that wins for Australian businesses will be harder to find. But they are still out there. Even with the slowing market, expenditure on mining investment is still expected to stay high for some time, given the large amount of investment already under way,providing opportunities for Australian businesses. ICN is working with the mining sector on many projects, to help increase opportunities for Australian industry, especially small and medium enterprises (SMEs).
mining sector, where there are plenty of opportunities for Australian SMEs.
Roy Hill iron ore The Roy Hill project will be a world-class iron ore mine and is located 115 km north-east of Newman in the Pilbara region of Western Australia.
The mine processing plant, rail and port facilities will be designed to produce 55 To support ICN, the Australian million tonnes per annum Government provides funding (Mtpa) of Hematite iron ore. through its Supplier Access The project will also consist to Major Projects (SAMP) of a 344km standard gauge, program. single line, dedicated heavyhaul railway from the mine Below are three SAMP site to Port Hedland and two projects across Australia, new purpose built berths. currently underway in the
NOVEMBER 2013 - JANUARY 2014  DIGGING & DRILLING MAGAZINE  25
During construction the workforce will peak at 3,600 people and it will have an operational manning of over 2,000 people.
Analytical and geophysical data collected for the project demonstrated that it has the potential to develop as a significant vanadium project, comparable in size with other The project will create similar deposits currently significant wealth for at an advanced stage of Australia through the evaluation and development generation of export revenue, in Australia. employment creation and payment of royalties and taxes.
GVK Hancock coal
Mount Peake TNG Limited’s 100%-owned Mount Peake project is located in the highly prospective Arunta Geological Province, 235km north-north-west of the regional centre of Alice Springs in the Northern Territory.
GVK Hancock coal proposes to develop the Alpha Coal project in the Galilee Basin near Alpha, Central Queensland. GVK is separately developing the Kevin’s Corner coal project adjacent to the Alpha Coal project.
The Alpha Coal project is an open cut mine which will With the feasibility study produce 32 Mtpa export due for completion this grade thermal coal and the year, preliminary capital mine life is estimated to expenditure for stage 1 of be 30 years. The first coal the project is estimated at is expected by the end of $560m (2.5 Mtpa) with stage 2015. The Kevin’s Corner coal 2 warranting a further $151m project is both open cut and (5 Mtpa). underground mining and again the expected output is The construction phase 30 Mtpa of coal with a mine includes infrastructure such life of 30 years. as roads, rail lines, power station, water supply, It will run 18 months behind buildings, mobile equipment, Alpha with mining targeted accommodation village and a for 2016. laboratory. The mines will be supported Construction of the by a 495 km standard gauge processing plant is scheduled stand-alone rail link from the to begin in 2014 with TNG Galilee Basin to Abbot Point. expecting first production by This rail link from the Galilee late 2015 plus a sustainable Basin to Abbot Point is mine life of 23 years. the route approved by the 26 DIGGING & DRILLING MAGAZINE NOVEMBER 2013 - JANUARY 2014
Queensland Government and the railway is potentially scalable to haul coal for third party customers. The scale of the GVK project presents one of the largest coal and infrastructure projects ever built in Australia and with a reported value of $10 billion, will offer enormous opportunity for local suppliers across multiple industry sectors. Opportunities for all three of these projects are available on ICN Gateway, ICN’s online system that connects buyers and suppliers looking to build partnerships in Australian and New Zealand industries. This powerful online system currently contains over $247 billion worth of contracts and more than 70,000 suppliers.
ALF REBOLA
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FEATURE ARTICLE »
SORBY HIILS Project
The Western Australian Environmental Protection Authority (EPA) has approved ASX-listed KBL Mining’s development of the Sorby Hills silver/lead/zinc project.
K
BL has completed a prefeasibility study for a Stage 1 development at Sorby Hills based on a conventional openpit mine and sulphide flotation concentrator operation, which will deliver 400 000 t/y of ore.
The mine will produce 20 000 t/y of lead and 800 000 t/y of silver over its ten-year lifeof-mine, and will require a capital investment of A$70million. EPA chairperson Paul Vogel said on Tuesday that several environmental factors were examined during the assessment of the proposal, including potential impacts to vegetation and flora, marine
environmental quality, human health and the ability to rehabilitate the area following the mine’s closure. Vogel said while examining the proposal at the highest level of a Public Environmental Review, the EPA was concerned with the initial inclusion of an artificial wetland, in particular the capability of determining whether the water entering the wetland was of suitable quality. “The EPA had a strong preference for the proponent to replace the artificial wetland with an evaporation basin and we are pleased the proponent
took the EPA’s concerns on board and modified the proposal,” he said. The EPA head added that the proposal footprint was also reduced from 767.25 ha to 573 ha during the assessment process. KBL stated that it would progress the feasibility study, mining permits and operational licences for the Sorby Hills project, in preparation for project financing, construction and operations. Current timing expectations would see KBL start construction by mid-2014, with operations expected to start 12 months later.
FEATURE ARTICLE»
NOVEMBER 2013 - JANUARY JULY 2012 2014 DIGGING & DRILLING MAGAZINE 29
Who is Involved in the Sorby Hills Project?
Location and Project Overview
The Sorby Hills Silver Lead Zinc Project (Sorby Hills) is being de-veloped by Sorby Management Propriety Limited (SMPL), which is 100% owned by joint venture partners Kimberley Metals Limited (KML) and Henan Yuguang Gold and Lead Group Co., Ltd (HYG&L).
Kimberley Metals Limited KML became an independent entity in May 2008; KML’s aim is to become an established precious and base metal producer and has assembled a balanced portfolio of assets to achieve this goal. KML’s key assets are: • • •
Sorby Hills Silver Lead Zinc Project (Kimberley, WA); Manbarrum Zinc Silver Lead Project (north east NT); Mineral Hill Gold—Base Metal Project (central NSW);
•
Constance Range Iron Project (north west QLD).
Henan Yuguang Gold & Lead Group Co., Ltd
The Sorby Hills project area is situated in the Kimberley region of WA at the north eastern extent of the Sorby Hills Ranges. The project site is located ap-proximately 50km by road north-east from the regional centre of Kununurra; entry to the site will be via an existing access track from the Weaber Plain Road.
The relevant tenements (M80/197 and M80/286) lie to the east of the currently proposed Ord HYG&L are based in Jiyuan, China; during the River expansion stage two. past 50 years the corporation has developed into a large inte-grative enterprise dealing in Sorby Hills is a major undeveloped Silver non-ferrous metals, noble metals, chemicals, Lead Zinc (Ag Pb Zn) de-posit; the Sorby Hills mining leases contain 13 separate but adja-cent coal products, power and mining. mineralised ore pods which form a linear belt (trending north – south) over 8kms long and Animal Plant up to 1km wide. Mineral Pty Ltd The shallow nature of the deposits allows for Perth based environmental consultancy ore extraction by conventional open cut mining; specialising in biological surveys and the focus will be on resources within 70m of environmental approvals. APM are a highly the surface. mobile group with extensive experience in the The ore will be processed by flotation and Kimberley region, including: approximately 45,000Tpa of concentrate (Ag Pb • Kimberley Metals Group Iron Ore Project Zn) will be produced for export to the overseas • Kimberley Liquid natural Gas Project market through Wyndham. •
Ord Irrigation Expansion
It is anticipated that construction will commence APM have been appointed by SMPL to in May 2012 and production will begin during coordinate and manage the environmental the first quarter of 2013. approvals and stakeholder consultation for the Sorby Hills Project. As of March 2011 the mine life is expected to be at least 14 years.
Community Focus •
• • •
SMPL has an ‘employ local’ policy and will endeavour to maxi-mise employment of personnel from Kununurra and local indige-nous communities In addition, employment opportunities will be created at the Wyndham Port which may benefit the community of Wyndham SMPL is committed to Indigenous employment and training pro-grams with Indigenous employees already working for SMPL SMPL maintain a high degree of community focus and will de-velop the Sorby Hills project in line with best practise, commu-nity, environmental and safety standards
Concentrate Handling and Transport
An average of 12 truck movements per week are expected, al-though up to 20 movements a week could occur following events such as road closures from flooding. SMPL will utilise existing Wyndham Port facilities and ship once a month for 11 months each year.
Management and Safeguards Packing and Storage • • • •
Concentrate handling will be predominantly mechanised Only purpose built “Rotainer” containers will be used Containers will be fully sealed and locked after filling All concentrate residue will be removed from the outside of containers by vacuum No container will be stored in a way that compromises the integrity of the container Containers will be stored upright and stacked no more than two high
SMPL are acutely aware that the handling • (packing, storage, load-ing and transport) of the Sorby Hills concentrate is an important • aspect of the project. SMPL is committed to minimising any risk associated with this phase Loading and Transport of the operation.
SMPL and its contactors will implement a • Road trains will pass through wash down facility prior to leaving site range of rules and proce-dures to all stages • All drivers will possess the relevant driver training of the concentrate handling process. and licens-ing
LOGISTICS
•
Speed restrictions will be applied and will not be exceeded Exhaust breaking will be banned within townships Vehicles will be regularly maintained to reduce noise genera-tion Haulage trucks will only operate during daylight hours
SMPL endeavour to achieve minimal direct • handling of concen-trate by utilising • a predominantly mechanised system. • Concentrate will be packaged at the final stage of the processing circuit where it will be expelled directly into shipping containers. Port “Rotainer” shipping containers will be used • On arrival every container will be inspected to check for the collection, stor-age and transport of the in-tegrity of the container walls, door seals and locking bolt concentrate; “Rotainer” containers are purpose built, stackable, bulk ore containers that • Locks and lids will only be removed from the containers im-mediately prior to unloading can be fully sealed with lockable lids. •
Containers are designed to be manoeuvred by the
ships crane and unloaded directly into the hold by Containers carrying concentrate will be rotation of the container transported from site to Wyndham Port “RotorMist” system will be utilised for dust by 80t road train; trucks will travel via the • The suppression; ‘’RotorMist’’ is a unique fluid misting Weaber Plain Road, Victoria Highway and system designed to be integrated with the Great Northern Highway passing through both “Rotainer’’ container rotation system Kununurra and Wyndham. NOVEMBER 2013 - JANUARY 2014 DIGGING & DRILLING MAGAZINE 31
FEATURE ARTICLE »
AUSTRALIA i n T H E
middle o f a G as B o o m
32 DIGGING & DRILLING MAGAZINE NOVEMBER 2013 - JANUARY 2014
D
omestic gas supplies and boom in the US replicated in exports are expected to his home state. grow rapidly by the end of the decade, enticing more “As some of the shale gas in the major international oil and gas Canning Basin is developed I think you’ll see the same players to set up shop. phenomenon,” Mr Barnett While iron ore, coal and gold has said. have traditionally been the nation’s big earners, analysts However, a recent HSBC report say Asia’s insatiable demand found a lack of roads and for energy will lead to strong pipelines could hinder the growth in gas production, as industry’s development. more than $200 billion in It hasn’t deterred junior projects come online. explorer Buru Energy, and Mitsubishi and The industry is talking about majors ConocoPhillips, from having a an imminent boom in liquefied natural gas (LNG) exports, with good look. four-fold growth projected by Meanwhile, new offshore 2020 as China and Japan soak projects are starting to produce up Australia’s supply. gas, alongside the North West But some analysts question whether the heady projections are realistic, given the risks that demand will not materialise. Still, the federal government forecasts Australia will become the second biggest LNG exporter in just over two years.
Shelf and Woodside’s Pluto project in WA.
Last week BHP Billiton flew in executives from Houston to
to the export market. “The advantage Western Australia has is it’s got fantastic resources,” Mr Pastor said. Less than six months after Woodside canned its onshore gas plant near Broome, floating gas processing is now all the rage. Proposed floating LNG vessels in the Browse Basin and Scarborough Basin are in the early development stages, while multinational Shell presses ahead with building its world first Prelude floating LNG vessel in Korea. Such is the popularity of the model that Shell plans to build more floating LNG plants. Energy giant Exxon Exxon and its equal partner BHP Billiton will soon decide whether to
“Floating LNG is considered the best option,” ExxonMobil says.
Seven major projects are being built across the country, with three in WA, three in Queensland and one in the open its $1.5 billion Macedon Northern Territory. gas plant, which will supply 20 per cent of WA’s gas. WA Premier Colin Barnett is certainly excited by the The modest-sized plant is set prospect of a gas boom in his to be dwarfed by its gigantic state, predicting China’s rapid Onslow neighbours including growth will continue and as Gorgon, valued at $53 billion, Japan acknowledges it will and the $29 billion Wheatstone. need more gas post-Fukushima. BHP’s head of conventional As well as trumpeting WA’s gas Steve Pastor said the prized offshore conventional company liked WA because of gas fields, Mr Barnett would its decades-long experience in love to the current shale gas oil and gas, and its proximity
pursue a floating option for Scarborough this year. “Floating LNG is considered the best option,” ExxonMobil says.
NOVEMBER 2013 - JANUARY 2014 DIGGING & DRILLING MAGAZINE 33
12th Clean Coal Forum Indonesia 2013 Asia’s Premier Coal Event
December 5th-6th, 2013 | Jakarta, Indonesia Sustainable Development Focus: Tapping Into Local Potential, a Myriad of Opportunity in Indonesia
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