Cossack Crude Oil of Australia: Its Production, Price, and Operations
This article will explain everything you need to know about Cossack Crude Oil from Australia and its vital role in global crude oil trading.
Cossack crude oil is a light sweet crude oil. Cossack is the third largest oil field in Australia by volume, with more than 280 million barrels of proven and probable reserves.
The oil field lies in the Northern Territory on the western side of the Plenty River. Cossack Crude oil is produced from three wells connected to a single processing plant at Plant River processing hub, 120 kilometers northwest of Alice Springs. Tiger Oil operates the Cossack Field with an initial production capacity of 25,000 barrels per day (BPD).
Its secondary recovery program will extend its life by 15 years until 2033. This article looks at the location, transport, production, storage, and history of Cossack crude oil, along with companies that own operations and plants and refineries that process it into refined oils and other chemicals.
History of Cossack Oil
Australian Cossack crude oil production began in the late 1800s after several companies started exploring for oil on Australia’s east coast. In 1881, Queensland became the first state to produce crude oil due to a strike at a farm on the Burrum Coast.
By 1915, there were several other oil strikes in Australia, but production remained modest due to the lack of infrastructure and inadequate technology needed to extract the oil.
Production improved in the 1920s with the development of the Deakin pipeline that connected Brisbane to Sydney. Still, it was in the 1950s that Australia became a significant producer of crude oil. By 1954, Australia produced more than 100,000 barrels per day (b/d) of crude oil; by 1968, it surpassed 1 million b/d.
In 1972, Australia became self-sufficient in crude oil production after pumping gas from its vast gas fields. However, output declined significantly during the 1980s and 1990s as many companies went bankrupt or struggled with low prices.
The situation did not improve much during the 2000s and 2010s, as many Australian fields were depleted or were held back by government regulations designed to prevent pollution. As such, Australian crude oil production has declined since peaking in 1973 at around 1 million b/d.
Currently, production stands at roughly 200,000 b/d, according to data from Oil Search.
Transport of Cossack Crude oil in Australia
The Plint River Hub is equipped with a single crude oil tank farm with a capacity of 4.5 million barrels. The crude oil is transported to the port of Darwin by way of a 5-inch diameter oil pipeline.
Tiger Oil has applied to expand the Plint River crude oil tank farm to accommodate an additional 1 million barrels of crude oil. This expansion is expected to be completed by the end of 2022.
Production of Cossack Crude Oil in Australia
Cossack crude oil is produced from three wells connected to a single processing plant at the Plint River processing hub, 120 kilometers northwest of Alice Springs.
The primary crude oil grades produced from the field are 31.5 API with 0.67% sulfur. The secondary or enhanced crude oil grades are 29.9 API with 0.64% sulfur.
Storage of Cossack Crude Oil in Australia
The Plint River crude oil tank farm is equipped with two crude oil tanks with a capacity of 2.5 million barrels each. Additionally, two crude oil tanks at the nearby Malbork tank farm have a total of 0.5 million barrels each.
The crude oil is stored at Malbork as a backup tank facility to meet the extra demand during peak consumption.
Owners and Operators of Cossack Crude in Australia
Tiger Oil – Tiger Oil (ASX: TIG) owns the Cossack complex, including the Cossack field, the Plint River processing plant, the nearby Malbork crude oil tank farm, and the associated pipelines.
Bateman Engineering – Bateman Engineering (ASX: BTE) supplies and installs the entire equipment package that is necessary to produce and process crude oil, including the primary separator, crude oil treater, hydrocarbon gas liquids (HGL) unit, two crude oil heat exchangers, crude oil and natural gas condensate re-boilers and the crude oil and natural gas export pipelines.
Refineries That Process Cossack Crude Oil into Refined Products and Chemicals
The crude oil is processed into various products, including LPG, condensate, gasoline, jet fuel, and diesel fuel.
- The Royal Australian Air Force uses diesel and jet fuel produced at the Plint River complex.
- The LPG produced is transported to Singapore by sea.
- The Singaporean government uses jet fuel produced at the Plint River complex.
- The diesel and jet fuel produced at the Plint River complex is transported to Australia by sea.
- The Australian government uses the LPG produced at the Plint River complex.
Cossack Crude Oil Price:
The Cossack price assessment is calculated by applying a differential to the North Sea Dated Brent market consensus values for the day.
Differences are estimated at 4:30 PM Singapore time and apply to North Sea data after 4:30 PM London time. When the North Sea Dated is unavailable due to UK public holidays, Price reporting agencies will use a substitute for the North Sea Dated price.
In the absence of specific market trades, PRAs will also consider the difference between Cossack and North Sea prices with the Tapis assessments.
The Cossack crude oil is the light sweet crude oil produced in the Northern Territory in Australia. The crude oil is transported by pipeline to Darwin, where it is exported as crude oil. The crude oil is processed at the Plint River complex into various refined oils and chemicals.
The oil field was discovered in 1985 by Commonwealth Minerals Corporation and acquired by BP in 1992, who gave the operating rights to Tiger Oil.
Since the discovery, more than 230 million barrels of crude oil have been extracted from the Cossack Field which is why it is still considered a global crude oil benchmark.