part of the solution

major milestone for warro gas field
Appraisal of the Warro gas field in the Perth basin has taken a major step forward with drilling of the next key appraisal well, Warro 4, this month.

Committed to solving our own challenges and playing our part toward a secure energy future for Western Australia, Alcoa of Australia entered into an agreement with Latent Petroleum in 2008 (recently acquired by Transerv Energy) to appraise the Warro field for tight gas.  (Tight gas is natural gas that’s difficult to access because of the nature of the rock and sand surrounding the deposit.) Under this agreement, Alcoa is progressively investing $100 million into the Warro exploration and appraisal to earn a 65% stake in the project, while Transerv is the project operator.

Drilling of the Warro 3 well in 2009 confirmed gas flows from the tight sand reservoir were possible after fracture stimulation. Encouraged with these results, seismic acquisition was completed in March 2011.

Drilling of Warro 4 is the next important milestone towards evaluating the commercial viability of the gas field.

If the field is commercialised, Alcoa will have the right to 65% of the gas to supply our three alumina refineries in Western Australia.  Transerv will have the right to separately market its 35% share of gas production.

At a time when competitiveness and diversity of gas supply in Western Australia remains a critical issue, Alcoa hopes Warro will become another valuable source of energy to the wider community.

Alcoa of Australia’s Director of Business Development and Marketing Michael Parker said: “While governments have a key role in setting the future energy security direction, we also recognise that Alcoa must actively develop solutions to our own energy requirements.

“Furthermore it’s important that the solutions not only benefit our business, but the broader community as well - our investment in Warro will hopefully prove to be a great example of that.”

Alcoa’s President of Global Primary Products (GPP) John Thuestad, who is based out of New York, visited our Australian operations this month, including a visit to the Warro gas field.  Mr Thuestad has global accountability for the primary end of Alcoa’s worldwide operations, including bauxite mining, alumina refining, and aluminium smelting (the type of operations we have here in Australia).

“Our significant investment in this project signals just how important our Western Australian operations are in the global Alcoa alumina refining network,” he said.

For several years, Alcoa has stressed the importance of a long-term energy security strategy to meet the ongoing domestic needs of households, essential support services and industry.

“We have consistently called for key policy changes to stimulate domestic gas supply and competition, and ensure a secure energy future for the country, without prejudicing LNG exports,” Mr Parker said.

“It’s very pleasing to see the Western Australian Government endorsing many of the policy changes the DomGas Alliance has been calling for in its Strategic Energy Initiative Directions Paper released in March.”

The Warro gas field is located onshore close to the existing gas pipeline infrastructure of the Dampier-to-Bunbury Natural Gas Pipeline and the Dongara-to-Perth Parmelia Pipeline. 

Warro was discovered in 1977 by WA Petroleum, but at that time it was deemed uncommercial due to the low flow rates caused by the tight nature of the reservoir rocks.  However significant advancement in technology has enabled ‘tight gas’ to be produced at highly commercial rates in the United States.  This, in combination with significant increases in Western Australia gas prices, underpins Alcoa and Transerv’s belief that Warro stands to be a highly attractive development project.

To read more on the specifics of the drilling see:

To read more about Alcoa’s history of underpinning energy infrastructure in both WA and Victoria, see:

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Warro 3.

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Warro 4 drill rig.

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Alcoa’s President of Global Primary Products, John Thuestad (pictured centre in yellow hat), visited our Australian operations in April 2011 including a visit to the Warro gas field.

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Alcoa executives visited Warro in April 2011.