Cooper Energy’s board of directors has approved the Sole gas project as ready to proceed.
The 100% interest holder in the Sole gas field, Cooper, said that the project satisfies technical, commercial, economic and risk management hurdles and that its board has firm conviction that satisfactory financing is available for the project.
The final investment decision (FID) is now only subject to securing satisfactory funding for the project. Finalisation of financing has started with a fully underwritten equity raising of approximately $151 million.
The project will develop the Sole gas field located in VIC/ L32 in the Gippsland Basin offshore Victoria to supply 25 PJ per annum to gas users in south-east Australia.
Gas produced from the field will be piped to the Orbost Gas Plant from where the gas will be supplied to customers through the Eastern Gas Pipeline. Cooper Energy has secured long term gas sales contracts with a portfolio of customers (including AGL, EnergyAustralia, Alinta Energy and O-I Australia) to support development of the field whilst retaining a significant share of annual output for availability to supply shorter term sales.
APA Group is expected to acquire and undertake all capital expenditure associated with the Orbost Gas Plant. Cooper Energy and APA Group are in advanced negotiations to conclude the arrangements pursuant to which APA Group will acquire, upgrade and operate the Orbost Gas Plant.
Cooper Energy will solely undertake the upstream development, which has an expected capital cost of $355 million. Subsea pipeline and umbilical contract has already been awarded to Subsea 7.
First gas from the Sole gas project is planned to be delivered to the Orbost Gas Plant in the March quarter of 2019.