Australia’s offshore oil and gas industry is undergoing a seismic shift, with an estimated 5,695 kilotons of infrastructure set to be decommissioned from its coastal waters by 2060 and beyond.
This monumental effort, spanning both onshore and offshore activities, involves a broad range of businesses, from initial planning and permitting to dismantling offshore platforms and recycling materials. It’s a complex process that includes plugging oil and gas wells, removing pipelines, dismantling steel structures, and safely disposing of waste materials. As the industry adapts to the future, the scale of decommissioning is expected to evolve, and the potential impact on Australia’s economy, environment, and job markets is immense.
The expanding offshore decommissioning value chain
Australia’s offshore decommissioning value chain is vast, with many key players involved in various stages of the process. Key activities include:
* Planning and securing necessary approvals: Obtaining government permits and satisfying environmental regulations are crucial first steps.
* Removal of subsea infrastructure: This includes plugging and abandoning over 1,000 wells, removing more than 4,960 km of pipelines and 1,700 km of flowlines from the seabed, and dismantling a host of offshore facilities such as fixed production platforms and floating production storage facilities
* Waste management and recycling: Steel, plastics, and other materials are salvaged and recycled, while hazardous materials are safely disposed of.
The Gippsland Basin, located off the coast of Victoria, holds a significant portion of the offshore infrastructure, accounting for about 9% of the total materials slated for decommissioning. However, the bulk of the work lies in Western Australia, where 89% of the material to be removed is concentrated. The sheer scale of this operation requires a coordinated effort among various stakeholders, including government agencies, private companies, and environmental organizations, to ensure that decommissioning is done responsibly and efficiently.
The costs and economic implications
The cost of decommissioning in Gippsland Basin and North Carnarvon Basin alone is projected at US$11bn by 2032. This is just the beginning, as decommissioning peaks are expected in 2033-2037 and 2043-2047, corresponding with the end of life for large infrastructure projects.
With the ongoing evolution of offshore wind, decommissioning activities will only become more extensive and expensive. The pipeline of decommissioning projects is projected to continue expanding well into the second half of this century, shaping Australia’s energy landscape for decades to come.
The information in this article is sourced from the Department of Industry, Science and Resources. You can read more here
