Karoon Gas Australia is set to go ahead with the front-end engineering and design (FEED) on its Echidna project in Santos Basin, offshore Brazil.
The company will advance development following 18 months of subsurface evaluation, which included reservoir modelling, production scenario analysis, well construction feasibility studies, and development optimisation.
Karoon Gas plans to lease a floating production, storage, and offloading (FPSO) facility for development of the project. The development concept also includes two extended horizontal production wells and one gas injection well.
FEED study is expected to be completed in the March quarter of next year at an estimated cost of less than A$10m ($8.05m).
After the FEED process starts, the company intends to issue a request for tenders to select suppliers for the engineering procurement construction and installation (EPCI) work package for Echidna development.
Based on recent supplier discussions, Karoon expects to receive tenders that will significantly reduce upfront capital commitments.
The company plans to make the final investment decision (FID) during the June quarter of next year.
It also proposes to farm down equity in the 100% owned Santos Basin blocks before FID.
At its peak, the resource is expected to produce nearly 28,000bpd.
Karoon Gas Australia holds multiple projects in Australia, Brazil and Peru.