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- Cooper Energy (COE) has told its shareholders that the remaining Sole gas sale agreements will commence on January 1, 2021
- The Sole gas field is located in the Gippsland Basin and gas from the field is processed at APA Group’s Orbost Gas Processing Plant in Victoria
- The plant has, however, been plagued by foaming issues in the sulphur recovery unit’s absorbers, causing several temporary shutdowns
- The long-term gas supply agreements cover an annual contract total of 19.75 petajoules, which is equivalent to an average of 54 terajoules per day
- Commencing the gas sales agreements will allow Cooper Energy to begin stepping away from the transition agreement under which gas has been sold at a spot price lower than the sales agreement prices
- COE has been trading 1.3 per cent lower at 37 cents and APA has been down 1.9 per cent at $9.94
Cooper Energy (COE) has told its shareholders that the remaining Sole gas sale agreements will commence on January 1, 2021.
The Sole gas field is located in the Gippsland Basin and is the first new offshore gas development in southeast Australia to start up in recent years.
Gas from the field is processed at APA Group’s (APA) Orbost Gas Processing Plant in Victoria, previously known as the Patricia Baleen Gas Plant. The group bought this and the export pipeline to the Eastern Gas Pipeline in November 2019 and since then has been working on upgrades to the plant.
The plant has, however, been plagued by foaming issues in the sulphur recovery unit’s absorbers, causing several temporary shutdowns. APA is reviewing the issue to determine the source of the problem.
Earlier this month, APA completed the reconfiguration of the plant’s two absorbers so that they are able to be used either independently or in parallel.
Since then, the Orbost plant has produced 22.5 terajoules per day from one absorber. Yesterday, APA turned on the second and the company is gearing up to reach 45 terajoules per day. Further work will need to be done on the plant to reach the planned production rate of 68 terajoules per day.
Cooper Energy Managing Director David Maxwell said the commencement of the remaining gas sales agreements is a significant step for the company and he thanked customers for their support during the protracted path to this point.
“The commencement of the Sole GSAs is a significant milestone which will deliver a material step-change in production, revenue, cash flow and earnings. We are pleased to be increasing gas supply to our utility and industrial customers and providing a competitive new source of natural gas to the domestic market.”
“We are grateful for the strong support shown by our customers during what has been a longer than expected commissioning phase for the Orbost Gas Processing Plant,” he added.
The long-term gas supply agreements, serving both utility and industrial customers, cover an annual contract total of 19.75 petajoules, which is equivalent to an average of 54 terajoules per day. There are also ‘take-or-pay’ obligations for a minimum of 90 per cent of the contracted volume.
Commencing the gas sales agreements will allow Cooper Energy to begin stepping away from the transition agreement under which gas from the Sole field has been sold at a lower spot price, less transportation costs. The revenue was also split between Cooper Energy and APA, as per the agreement.
COE has been trading 1.3 per cent lower at 37 cents and APA has been down 1.9 per cent at $9.94 at 10:08 am AEDT.
