Origin takes more Otway project stake

The Thylacine platform in the offshore Otway Basin (showing drilling rig and tug boats in the background)

Origin Energy has entered into an agreement with Benaris to enable its subsidiary, Lattice Energy, to acquire Benaris’ 27.77 percent interest in the Otway Gas Project in Australia. 

Origin is the operator of the Otway Gas Project, a joint venture between Origin 67.23%, Benaris 27.77% and Toyota 5%. Lattice Energy is a wholly owned subsidiary of Origin Energy.

The Otway project consists of offshore gas fields, Thylacine in Tasmania and Geographe in Victoria, with gas and liquids extracted using an offshore platform and transported via pipelines to an onshore gas processing plant in Port Campbell, Victoria.

The acquisition is expected to complete when Lattice Energy is divested, Origin informed on Monday.

Under the terms of the agreement, Benaris’ 29.23 percent interest in the neighboring T/30P Exploration Joint Venture and VIC/P43 Exploration Joint Venture will also be acquired.

On completion of the acquisitions, Origin will pay Benaris $190 million, adjusted to reflect an effective date of July 1, 2017. The acquisitions will increase Lattice Energy’s interest in the Otway Gas Project Joint Venture to 95 percent and the Exploration Joint Ventures to 100 percent.

Origin has the right to acquire the assets, although has no obligation to do so if the divestment of Lattice Energy does not proceed. The acquisitions are subject to certain conditions and also Toyota Tsusho pre-emptive rights for the Otway Gas Project Joint Venture.

Under a separate agreement, Lattice has agreed to pay Benaris $60 million for 11.89 PJ of reserves to rebalance the share of gas between the parties relating to the historical lifting of production at Otway and to reach agreement on other joint venture matters. The agreement will increase Lattice Energy’s 2P reserves in the Otway Gas Project Joint Venture by 11.89 PJ. The payment is not conditional on the divestment of Lattice Energy.