Sole Gas Field Project Enters FEED Stage (Australia)

The Sole gas field and Orbost Gas Plant project has entered into Front End Engineering and Design (FEED) phase, Cooper Energy informs.

Completion of the acquisition of 50% interest has resulted in Cooper Energy booking 2C Contingent Resources of 106PJ of sales gas.

The VIC/RL3 joint venture, which comprises of Cooper Energy and Santos Limited, will now work towards completion of FEED for a Final Investment Decision (FID) in the September quarter 2016.

Cooper Energy Managing Director, David Maxwell, said: “Together with Santos we are now working on completing the detailed analysis, design and costing necessary for the decision on developing the Sole gas field. The current outlook is very encouraging, with gas prices and field development costs trending favourably for economic development of Sole.”

“We believe that Sole, as a conventional gas field, nearby existing infrastructure, is a competitive and attractive source of gas for eastern Australia. We are working with customers to develop the gas sales agreements that will deliver the best value outcomes for our shareholders and customers,” he said.

Gas market offtake contracts and finance for project construction will be developed in parallel with the FEED in readiness for a likely FID in the September quarter of 2016.

Cooper Energy has assessed the Sole gas field to contain a Contingent Resource (2C) of 211 PJ of sales gas (100% joint venture). Whilst project development and costing will be determined by the FEED process, the field is expected to provide gas supply of approximately 25 PJ per annum over 8 years after commissioning in late 2018. Gas produced from Sole will be transported by subsea pipeline to the Orbost Gas Plant onshore Victoria, from where it can be distributed to eastern Australian gas customers via the Eastern Gas Pipeline.

The FEED phase is budgeted to cost approximately $27 million, which Cooper Energy will fund 100% as part of its commitment to pay the first $50 million of project costs. Cooper Energy’s costs through to FID stage are fully funded.

The addition of Sole has more than doubled Cooper Energy’s Gippsland Basin gas resources which now total 183 PJ of 2C Contingent Resources (comprising Sole and the nearby BMG gas and liquids resource). The total gas held by the Gippsland Basin joint ventures in which Cooper Energy participates amounts to 330PJ at the 2C Contingent Resources level 1, which together with the Orbost Gas Plant, is expected to feature in new supply to eastern Australian energy markets from late 2018.

“Development of Sole will provide a cornerstone for the broader development of Gippsland gas resources via the Orbost Gas Plant,” said Maxwell. “This includes our nearby BMG resource where we, as operator of the project, are currently finalising a business plan for development to commence gas supply from 2021.”

The Sole field is located 65 kilometres from the Orbost Gas Plant, onshore Victoria and 35 kilometres from Cooper Energy’s BMG gas and liquids resource. The Sole Gas Project is expected to comprise a single vertical subsea well and pipeline to the Orbost Gas Plant which is connected to the Eastern Gas pipeline. The Orbost Gas Plant is currently processing gas from the Longtom gas field.