Cooper Energy has signed a binding gas sales agreement with EnergyAustralia for the supply of 5 PJ per annum from the Sole gas field for a minimum of 5 years, with provision for a 3 year extension.
The agreement is conditional upon completion of the transaction for Cooper Energy to acquire Santos’ Victorian Gas assets and an affirmative final investment decision (FID) for Sole.
The acquisition of Santos’ share in Sole will result in Cooper Energy holding a 100% equity in the field, which is assessed to contain Contingent Resources (2C) of 2411 PJ of gas. The agreement with EnergyAustralia is the fourth signed by Cooper Energy for the field and takes the annual contracted quantity to 14.6 PJ of the 25 PJ annual production anticipated from the field for the first 8 years.
The EnergyAustralia agreement follows agreements with O-I Australia, AGL and Alinta Energy.
Cooper Energy anticipates committing up to 85% of the annual volume prior to FID and is currently engaged in discussions with gas buyers on sale agreements for the remaining quantity.
Cooper Energy managing director, David Maxwell, said: “Our agreement to acquire Santos’ Victorian assets has substantially expanded our gas contracting opportunity and we are delighted to add EnergyAustralia to our portfolio of gas supply customers.”
“There is keen interest in contracting gas from Sole and we expect to finalise additional off-take contracts within the next few months. The market outlook is positive and, thanks to the strong support and commitments we have received from major energy retailers and industrial users, we are close to finalising a quality gas contract portfolio ahead of FID for the Sole project.”
Sole FID is expected to occur in the March quarter 2017, with first gas from the project scheduled by March 2019. Supply to EnergyAustralia under the agreement would start January 1, 2020. The effective date for the Cooper Energy acquisition of Santos’ Victorian gas assets is January 1, 2017.
The Sole gas field is located in VIC/RL3, offshore Victoria approximately 62 kilometres from the Orbost Gas Plant, onshore Victoria, where Sole gas will be processed and delivered to the Eastern Gas Pipeline. Cooper Energy will hold a 100% interest in VIC/RL3 and the Orbost Gas Plant on completion of the Santos Victorian gas asset acquisition (current interest: 50%).