Beach, BP sign LNG pact
Sydney-listed Beach Energy has entered into heads of agreement with BP regarding the supply of its share of LNG from Waitsia gas project stage 2 in Western Australia, it said on September 27.
Waitsia is one of the largest onshore gas fields ever discovered in Australia. Gas from its second stage is on track to start flowing in the second half of 2023. Japan's Mitsui and Australia's Beach took a final investment decision on the project late last year.
The five-year agreement contains all material terms and conditions for BP purchasing all 3.75mn metric tons of Beach’s expected LNG volumes from the Waitsia gas project stage 2, Beach said. Supply will be delivered on a free on board basis from the North West Shelf facilities in Karratha, Western Australia. BP is an existing participant in the NWS joint venture.
The annual contract volumes and supply terms are aligned to the provisions in the executed North West Shelf gas processing and lifting agreements. The terms include built-in flexibility around the start-up of firm supply to ensure alignment with the completion of construction and commissioning activities, Beach said.
The agreed LNG price is linked to both Brent and JKM price indices and includes a downside price protection mechanism. This hybrid pricing structure is expected to provide Beach with favourable price movements during north Asian winters, the company said.
Beach and BP are targeting execution of a fully termed LNG supply and purchase agreement early next year.