Cooper, AGL Sign New Gas Agreements (Update)
(Adds Appea comment on gas supply)
Australian Cooper Energy has signed new gas supply agreements with AGL Energy from its Sole (Gippsland Basin) and Casino Henry (Otway Basin) gas operations, it said June 5.
Cooper has completed the construction of the offshore development of the Sole gas field and gas infrastructure firm APA is expected to conclude the plant upgrade works and start commissioning and delivery of sales gas in the next quarter.
The Sole project will deliver an additional 68 terajoules/day (64mn ft3/day) of natural gas supply for southeast Australia. “AGL Energy is a cornerstone gas customer for the development of the Sole gas field, having accounted for 60% of the total volume contracted in 2016 to secure project financing,” Cooper said.
Under the new agreements, AGL Energy has contracted to take, at current market prices, a share of the 2019 calendar year production from Sole, inclusive of commissioning gas and up to 4 petajoules from Sole for the first quarter of next year. This tranche represents an extension to the gas volume AGL previously contracted from May 1, 2020 and 100% of Cooper Energy’s share of gas production from Casino Henry for the 2020 calendar year, Cooper said.
“AGL Energy’s commitment was critical to the Sole Gas Project proceeding and now, on the cusp of production start-up, we are delighted to add new supply agreements. Having been there as a customer which supported project finance it is fitting we now have agreements with AGL Energy for the supply of gas right from commissioning,” Cooper managing director David Maxwell said.
“The extension of our supply relationship with AGL Energy to now also include Casino Henry reflects our multi-basin strategy under which we can offer a portfolio of sources. The Otway Basin offers a competitive source of gas supply for South Australia in particular and we hope our forthcoming drilling program will add to the resources we can bring to market,” he said.
Maxwell said the agreements with AGL Energy were the first from a Sole marketing process which began in the first half of this year and was anticipated to result in the signing of additional agreements in the coming months. These agreements are expected to include coverage of 2019 Sole production that remains uncontracted and longer-term gas sales of uncontracted gas from Sole for the period 2020 to 2023, he said.
Appea welcomes growing supply in the east
Upstream lobby group Appea has expressed satisfaction with a separate, three-year gas supply agreement with an industrial user in the east of the country, a region short of gas.
The announcement that Australia Pacific LNG and Armour Energy will provide gas to the Incitec Pivot plant in Brisbane adds to the significant number of new gas supply agreements announced in 2017, 2018 and so far in 2019 to provide natural gas to domestic customers, it said June 4.
CEO Andrew McConville said the gas supply agreement will provide certainty for the manufacturer and is further evidence of the large investment industry has made to increase substantially the flow of gas to the east coast domestic market. “The oil and gas industry has announced billions of dollars in new investment since 2017 to bring more gas into the market, supporting both domestic gas consumption and gas export projects that are underpinning much of Australia’s economic growth,” he said.
In the past two and a half years alone, there have been announcements from Arrow Energy, Shell Australia, Senex, Cooper Energy, Strike Energy, GLNG, Australia Pacific LNG, Origin Energy and Santos to provide new supply in various parts of eastern Australia.
“More gas supply into the Australian domestic market helps make a significant difference to the millions of homes and thousands of businesses that use gas – underpinning hundreds of thousands of jobs in Australian manufacturing, producing fertilisers, metals, glass, cement, bricks, plastics and other basic goods," he said.