The fields are estimated by Apache to contain up to four trillion cubic feet of gas, and are located to the northeast of Chevron's Gorgon field and to the south of Woodside Petroleum Ltd's Pluto field offshore WA.
Apache Energy government and public affairs manager David Parker on Thursday said pre-front end engineering and design (FEED) studies "are being undertaken" but declined to comment on potential development scenarios for the fields.
Apache operates and holds a 65 per cent interest in the two fields, with Kuwait Foreign Petroleum Exploration holding the balance.
"It (pre-FEED) is being undertaken by the JV (joint venture) on design and costing in order to establish the optimal development scenario for this particular discovery," Parker said.
It is understood that a proposed development may involve a liquids stripping operation, with storage tanks for produced condensate and a gas plant located next to the proposed Devil Creek plant at Cape Preston on-shore WA, a source familiar with the issue who did not wish to be named told reporters.
The accommodation and maintenance facilities at Devil Creek, which is being developed by Apache and Santos Ltd to commercialise the Reindeer field, would be shared by the two operations.
Analysts, however, have questioned the logic of constructing a new plant rather than expanding the Devil Creek facility to accommodate gas from the Julimar and Brunello fields.
UBS said in a client note that it was "increasingly probable" that Woodside Petroleum Ltd would strike a supply arrangement with Apache for gas from the Julimar and Brunello fields to be used as feed for an expansion of the Pluto liquefied natural gas (LNG) plant.
"We think a lack of Pluto area drilling success implies it is increasingly likely Woodside and Apache will strike a gas supply arrangement for Pluto LNg Train-2," UBS said in a July 17 note.
The mining boom, capacity constraints on pipelines and the increased cost of gas developments have combined to underpin rapid demand growth for gas in WA, pushing contract prices substantially higher over the past few years.
