LNG

June 21 (LNGJ) - APA Group, the Australian energy infrastructure company, has agreed to sell the Orbost Gas Processing Plant in the southern Australian state of Victoria to Cooper Energy in a deal worth up to A$330 million (US$230M) via four instalments. The deal comes amid rising Australian natural gas prices. The spot gas price in Victoria, including the city of Melbourne, has risen from the equivalent of around US$7.00 per million British thermal units in March 2022 to about US$26.25 per MMBtu in June.

   The Orbost plant is close to Cooper Energy’s offshore Gippsland Basin assets and connections into the Southeast Australian gas market and the Eastern Gas Pipeline. “Cooper Energy’s acquisition of the Orbost Gas Processing Plant is transformative for the company,” said Managing Director David Maxwell. “The acquisition represents the next step in Cooper Energy’s twin gas supply hub position and is underpinned by attractive market dynamics in the tightening Southeast Australia gas supply,” he added.

AGL Energy, the leading Australian gas and power supplier forced to cease any further development of the proposed Crib Point LNG import project in the southern state of Victoria, has signed pipeline natural gas supply agreements with Cooper Energy.

Australian company Cooper Energy and Japanese trading house and LNG buyer, the Mitsui Group, said they planned to invest in buying and upgrading the idle Minerva Gas Plant in the state of Victoria to boost offshore natural gas supplies in southeast Australia.

Copper said both companies would make a joint commitment of A$55 million (US$384Mlb) to support increased and new domestic gas supply for the region.

The companies said A$37M would be spent on upgrading the plant, A$17.8M on purchasing it and on engineering and maintenance.

“This investment decision represents an important milestone in Cooper Energy’s continuing growth as a safe, competitive, efficient and reliable developer and marketer of new gas supplies for homes and businesses in southeast Australia,” said Cooper Energy Managing Director David Maxwell.

The infrastructure works at the Minerva Gas Plant will enable the supply of 16 petajoules of currently undeveloped gas.

Maxwell said this was an important commitment to infrastructure investment, local jobs and increased domestic gas supply.

“This is a ‘shovel-ready project’ which will see Cooper Energy and Mitsui Group upgrade the idle Minerva Gas Plant to be a processing hub for local production and discoveries in the offshore Otway Basin in Victoria,” explained Maxwell.

The Minerva Gas Plant is located near Port Campbell in Victoria and will be renamed the Athena Gas Plant in recognition of the expansion of its role in processing new supplies from the Otway gas fields.

“It means local jobs for local contractors which will help deliver reliable gas supplies into the East Coast market,” he stated.

“The investment follows the successful exploration program by Cooper Energy and Mitsui Group resulting in the Annie-1 gas discovery, in the Otway Basin, the first offshore discovery in southeast Australia over seven years,” added Maxwell.

The Cooper-Mitsui investment comes as two LNG import projects advance in southeast Australia to alleviate natural gas shortages.

Australian utility AGL Energy is progressing with its LNG import terminal project at Crib Point on Westernport Bay, south of the Victoria state capital Melbourne.

AGL said recently its environmental statement would be open for public comment until 26th of August 2020.

Subject to clearance, AGL hopes to make a final investment decision on the Crib Point project around the end of 2020.

A second LNG project aimed at ending gas shortages is being developed by Australian Industrial Energy (AIE) in the state of New South Wales at Port Kembla, south of Sydney.

That project is backed by the world’s largest LNG purchaser, JERA Co. Inc. of Japan, the Japanese trading house Marubeni Corp and Australian mining billionaire Andrew Forrest’s Squadron Energy.

The Minerva Gas plant project proposes to draw gas from four offshore wells (Casino-4, Casino-5, Henry-2, and Netherby-1) into the onshore plant via a pipeline tie-in and minor modifications.

“This will improve recovery enabled by lower plant inlet pressure and provide the ability to offer customers firm supply,” Cooper Energy explained.

“Following the completion and performance testing, first gas is expected to be delivered to the Minerva plant within the September quarter 202. This expectation incorporates allowances for uncertainty from Covid-19 as it is presently understood,” the company statement concluded.