Red Gully Gas condensate processing facility contract awarded Monday, 28 September 2015

Empire Oil & Gas has awarded the contract to operate and maintain its Red Gully Processing Facility (RGPF) to Upstream Production Solutions (UPS), an oil and gas services provider owned by GR Engineering Services.

The Red Gully Gas and Condensate Processing Facility is located in the Perth Basin, Western Australia. It is responsible for producing gas and condensate (light crude oil) from the Red Gully-1 and Gingin West-1 wells. The process control operations are in full automatic mode, reducing the man-power needed to operate the plant.

The wells produce between 50 to 80 barrels of condensate per 1 million cubic feet of gas.

UPS has a long history with the RGPF, having operated and maintained the facility since its commissioning in 2012. The contract secures the company's continued involvement with the project, says UPS Managing Director Joe Corvetti.

"We welcome the entry into a further Contract with Empire, having successfully worked together to improve the efficiency of the operation since its inception," Corvetti said.

UPS was awarded the contract after an open bid tender process. Under the agreement, UPS will provide site-based operations and maintenance personnel for a fixed two-year term starting on 23 September 2015. There are options for two 12-month fixed-term extensions. The number of personnel provided can also be increased if the Red Gully plant expands, or if new production hubs come online.

According to Empire Oil & Gas, the operations and maintenance contract is forecast to generate cost savings of around $800,000 a year, due to a reduced contract scope and the competitive state of the oil and gas market.

In August 2015, Empire Oil & Gas announced an increase in gas and condensate reserves, in excess of the amount covered by the Gas Sales Agreement it has with Alcoa of Australia.

Currently, Empire sells 8 terajoules of gas to Alcoa of Australia per day under the agreement. But the Red Gully plant has a capacity of 10 terajoules per day, meaning it is possible to sell the extra production to another party.