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McDermott, GE unit ink deal with Western Gas over Western Australia project

Energy services providers McDermott International Inc. and Baker Hughes a GE company signed a memorandum of understanding with Australia-based Western Gas Corp. Pty. Ltd. to develop the Equus gas project in Western Australia.

McDermott said in a Dec. 12 statement that they were selected as exclusive development partners for the project and were also awarded a contract to support the planning phases of the project through the pre-front end engineering design and front-end engineering design, or FEED, to a final investment decision.

Oil & Gas Consulting, a joint venture of McDermott and Baker Hughes, will provide the pre-FEED that is targeted to be completed by the second quarter of 2019 and will continue with the FEED work once the pre-FEED is completed.

McDermott said its portion of the contract is valued at between $1 million and $50 million.

Under a separate contract, the two energy services providers are expected to conduct the engineering, procurement, construction, installation and commissioning of the entire field-development scope. The scope covers reservoir evaluation, drilling and completions, subsea, production facilities, an export pipeline, an LNG facility and a domestic gas connection facility.

The final investment decision is planned for late 2019 or early 2020, and the project is on track to produce gas in late 2023 or early 2024, Western Gas said.

The Equus gas field is about 124 miles northwest of Onslow, and its water depth ranges from 3,280 feet to 3,937 feet. Its resource is sufficient to supply two million tonnes of LNG per year for 20 years, or one-quarter of the Western Australian domestic gas demand.

The field also has a downstream, nearshore LNG facility and pipeline connection to the Western Australian gas market.