Rick Wilkinson
OGJ Correspondent
MELBOURNE, Apr. 27 -- Nexus Energy Ltd., Melbourne, has received approval to develop its wholly owned Longtom gas field on Gippsland basin Permit Vic/P54 off Victoria.
The company signed a revised 10-year gas sales agreement whereby Adelaide-based Santos Ltd. will process the gas and associated liquids at its Patricia-Baleen plant near Orbost on the East Victoria coast.
Santos will process up to 419 bcf of Longtom raw gas and will purchase the liquids and the first 326 bcf of gas at defined prices.
Santos also has the option to acquire up to 35% interest in Longtom field.
Required construction
Nexus plans to bring Longtom on stream during third-quarter 2008. Production will be via subsea wells and a pipeline connecting with the Santos line from Patricia-Baleen fields to shore.
Field and pipeline installations and the drilling of an additional well will take place in first-half 2008.
Meanwhile, Santos must upgrade the plant because the dry Patricia-Baleen gas requires very little treatment other than dehydration, but Longtom production will be rich. Patricia and Baleen fields are in decline, and the Longtom deal will extend the life of the plant by at least 10 years.
Nexus is converting letters of intent for major equipment and services into final contracts and will file a production license application with Victorian authorities in May.
The gas will be marketed through Santos's marketing arm via the major Eastern Gas Pipeline from Longford to Sydney.
