APA buys Orbost gas plant for processing Sole field

Sydney-based pipeline combine APA Group has signed a nonbinding heads of agreement with Cooper Energy Ltd., Adelaide, to negotiate APA’s acquisition, upgrade, and operation of the Orbost natural gas processing plant in east Gippsland. The plant is associated with Cooper’s development of offshore Sole gas field in Bass Strait.

Sydney-based pipeline combine APA Group has signed a nonbinding heads of agreement with Cooper Energy Ltd., Adelaide, to negotiate APA’s acquisition, upgrade, and operation of the Orbost natural gas processing plant in east Gippsland. The plant is associated with Cooper’s development of offshore Sole gas field in Bass Strait.

The agreement frees up Cooper to concentrate on the upstream side of the development while APA can attend to the operation of the gas processing systems. It also is hoped to encourage utilization of the Orbost plant as a hub for other potential developments such as Manta gas field, which also lies in Bass Strait.

APA will buy and invest $250 million (Aus.) in upgrading the plant leaving Cooper to fund the approximate $355 million for the offshore development work. This includes drilling, subsea systems, an offshore pipeline, and the associated shore crossing.

APA and Cooper will enter into a gas processing agreement for the gas and APA’s delivery of gas to market.

A series of associated agreements will facilitate cooperation between the parties during construction and development of the plant and Sole field and their ongoing operation. These agreements will enable Cooper to process gas from the Manta field and APA to process third-party gas through the Orbost plant.

There has been a succession of owners of both the field and the gas plant.

The Orbost plant was originally built by Austrian company OMV AG to process gas from the now-depleted offshore Patricia-Baleen gas fields. Later it also processed gas from Nexus Energy’s Longtom gas field.

Santos bought into the plant and Sole field and subsequently sold its 50% stake in both to Cooper Energy in December 2014 for $27.5 million (Aus.), giving Cooper 100% interest.

Sole field was originally discovered by Shell in 1972. It lies 65 km from the Orbost plant.

The field will be developed via a single well—expected to produce as much as 70 MMcfd—and a pipeline direct to the Orbost plant, which in turn is connected to the major Eastern Gas line extending to Sydney. The Orbost plant will need modifications to cater for Sole gas.

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