Cooper Energy has announced that the Sole term gas supply agreements will commence as part of the joint commitment with APA Group to reconfigure the Orbost Gas Processing Plant. The plant is owned and operated by APA and has been upgraded to process gas from Cooper Energy’s Sole gas field in Victoria.
The commencement of the agreements, in advance of the practical completion of the Orbost Gas Processing Plant, is an outcome of a Transition Agreement between APA and Cooper Energy.
Under the Transition Agreement, the parties committed to collaborate on a work program to enable commencement of firm supply from Sole at the earliest juncture and the practical completion of the Orbost Gas Processing Plant upgrade. The plant’s performance has continued to be affected by the foaming issues reported previously. The work program includes modifications to increase plant throughput and uptime and continuation of root cause analysis of the foaming and potential remedies.
“We now have a clear timeline to the commencement of our Sole gas supply contracts,” said Cooper Energy Managing Director, David Maxwell.
Cooper expects to initiate the agreements on 1 December 2020 and 1 January 2021. The agreements are expected to be initiated at a total Annual Contract Quantity (ACQ) of 19.75 PJ per annum (pa). This quantity compares with the longer-term aggregate ACQ of 22 PJ pa applicable from 2022 with take-or-pay quantities typically being 90 per cent of the ACQ. Cooper Energy is putting in place supplementary supply arrangements to fulfil gas customer supply obligations if required.
Orbost Gas Processing Plant Performance and plans
Plant operations from 1 September to 21 October were directed to two objectives:
- trials to confirm plant capability to supply sales gas to specification through single absorber operation; and
- sampling and other trials to advance root cause analysis.
Performance during the single absorber trials has demonstrated that processing through two absorbers operating in parallel can sustain higher total sales gas supply than the current sequential processing configuration, albeit with ongoing fouling that will require periodic maintenance.
Front End Engineering and Design for the plant works to be conducted in November has been completed. The works include reconfiguration of the Orbost Gas Processing Plant to permit operations in either a parallel or sequential configuration, and for production through a single absorber should the other absorber be unavailable, such as for maintenance. This is expected to result in higher sustained production rates, and flexibility, than would be achieved if the plant remained in its current configuration.
Gross cost for these works is budgeted to be $19 million. Cooper Energy will fund its 50 per cent share of the expenditure from funds placed in escrow at the commencement of the Sole Gas Project. As these funds are not classified as cash, this expenditure has no impact on the company’s cash reserves or net debt. The works are expected to commence mid-November and have a three-week duration. Production from Sole will be shut in for this period.
The need for any further works, such as to remedy a root cause, and/or to upgrade sulphur removal capabilities and thereby reduce maintenance downtime and increase the sustainable gas processing capacity, will be considered in light of the findings of the ongoing root cause analysis and plant performance.
