Beach, Senex reach S. Australian pipeline agreement

Beach Energy Ltd. signed an agreement with Senex Energy Ltd. to tie in the South Australian Growler oil field (Beach 40%) to Lycium field. It also agreed with Senex to construct a trunkline from Lycium to the Moomba facility. The tie-in of this section, however, remains subject to approval from the South Australian Cooper Basin joint venture (Santos Ltd., 67%, Beach, 20%, and Origin Ltd., 13%).

Beach expects the pipeline from Growler to be constructed in two main sections. The first section, directly from Growler field to Lycium field, will consist of a 6-in. OD flowline with an initial capacity of about 8,000 b/d. The equity interests for this section will be Beach 40% and Senex 60%.

Pending approval from the SACB JV, an 8-in. OD, 15,000 b/d main trunkline will service the whole of Beach's operated and nonoperated Western Flank acreage and extend between Lycium and the Moomba facility. The equity interests for this section will be Beach 60% and Senex 40%.

Beach will build and operate both pipelines, with the total cost of $40 million to be shared between Beach and Senex.

These pipelines will provide Beach with access to Growler field during floods. The trunkline also will allow increased production from Beach's PEL 91 and PEL 92 acreage.

A six-well approved exploration program for PEL 104 and PEL 111 is expected to start in October, when flood waters are forecast to recede. The Department of Primary Industries and Resources of South Australia also has granted a 12-month extension to the tenure of the Beach-operated Western Flank PEL's 91 and 92, acknowledging that flooding has delayed exploration in the area.

Beach expects to commission the pipelines in June 2012.

Contact Christopher E. Smith at chriss@ogjonline.com.

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