Oz duo finds third customer for Sole gas
- Business & Finance
A joint venture between two Australian oil and gas companies, Santos and Cooper Energy, has entered into a gas sales agreement with Alinta Energy for the supply of gas from the Sole gas field off Australia.
The gas field is located in the Gippsland Basin in VIC/RL3, offshore Victoria, approximately 62 kilometers from the Orbost Gas Plant, onshore Victoria, where the gas will be processed.
Cooper Energy holds a 50% interest in the gas field and the Orbost Gas Plant, from which the gas will be supplied to Alinta Energy, with the balance being held by Santos Limited.
Cooper Energy informed on Thursday that the agreement with Alinta is for up to 2 PJ per annum for a minimum of 5 years with provision for a 3-year extension, subject to the parties’ agreement. It is conditional upon certain conditions precedent, including an affirmative final investment decision (FID) for Sole. Cooper noted that the supply is planned to start in 2019.
Cooper Energy now has a total of 77 PJ under binding gas sales agreements, which is 64% of its 121 PJ equity share of the Sole 2C Contingent Resources of 241 PJ1. On an annual basis, Cooper Energy has contracted 9.6 PJ of its 12.5 PJ share of the first 8 years’ production anticipated from the field.
The Alinta Energy agreement is the third supply agreement announced by Cooper Energy in the past 14 months with the other sales agreements held with O-I Australia and AGL Energy.
Cooper Energy Managing Director, David Maxwell, said: “Securing a base load of quality contracts is a foundation for the final investment decision. The support shown for the Sole gas project from major energy retailers and industrial buyers has been substantive and demonstrates a commitment to the development of a broader and more diverse supply base for south-east Australia gas users.”
The final investment decision (FID) for the Sole project is expected in the fourth quarter of 2016.
Alinta Energy’s Chief Executive Officer, Jeff Dimery, said: “As a growing east coast energy retailer having access to competitively priced gas into the future allows us to deliver on Alinta’s mission which is to make energy more affordable for our customers.”
Maxwell added: “A key element of the Sole final investment decision is the optimization of funding and equity levels for Cooper Energy shareholders and prudent project financing.”