Page 12 - AsianOil Week 20

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Strike picks AGIG as midstream partner at West Erregulla
PROJECTS & COMPANIES
STRIKE Energy has picked pipeline operator Australian Gas Infrastructure Group (AGIG) as its midstream partner for its West Erregulla natural gas development in Western Australia.
The junior said on May 21 that it had picked AGIG as its preferred partner to design, build, own and operate the upstream development’s 50-TJ per day gas processing facility under a long-term tolling agreement.
Strike Energy operates Permit EP 469 in a 50:50 joint venture with Warrego Energy.
The facility will process the gas before pump- ing it into Western Australia’s transmission net- work. West Erregulla is located next to AGIG’s Dampier-Bunbury Natural Gas Pipeline, which connects producing fields in the state’s north to the southwestern market.
Strike said AGIG’s investment in infra- structure and services would run to more than AUD200mn ($131.8mn) under a competitively priced long-term tariff.
The deal allows Strike to avoid significant upfront costs, paving the way for it to focus on the upstream portion of the project.
Strike said the award was subject to the exe- cution of a full form document and certain other
conditions, including both companies reaching a final investment decision (FID) on their respec- tive developments before the end of this year.
AGIG is to begin front-end engineering and design (FEED) work, long-lead procurement and other early works necessary to secure the requisite tenure and project approvals prior to construction commencing. First gas is expected to arrive in the first half of 2022.
Strike managing director and CEO Stuart Nicholls said: “We’re excited about the long- term future of the WA domestic gas market and, with our forecast low cost of production, believe we are in a prime position to move forward with confidence at a time when many in our industry are deferring or cancelling projects.”
AGIG’s deal with Strike is similar to an agreement the pipeline operator is working on with GB Energy Holdings, which operates the Golden Beach gas production and stor- age project offshore Victoria. AGIG said last month that it was reviewing the AUD200mn development of midstream gas infrastructure necessary to commercialise the project. If the project proceeds as expected, first gas should also arrive in 2022.™
Australian LNG exports hold up in April
PERFORMANCE
AUSTRALIA’S LNG exports remained robust in April, despite many countries going into lock- down as they sought to contain the coronavirus (COVID-19) pandemic, thus putting the brakes on demand.
According to Australian consultancy Ener- gyQuest, the country’s producers actually exported more LNG in April than they did both in March and a year ago, in April 2019. The con- sultancy said this week that Australia’s LNG shipments totalled 6.9mn tonnes, or 101 car- goes, in April, up from 6.8mn tonnes in March – which also came to 101 cargoes. This was also a 3% increase year on year.
EnergyQuest noted that 40 of the April cargoes went to China, up from 29 in March and 36 a year ago. The figure is likely to be welcomed as a sign of recovery in Chinese demand as the country cautiously reopens after lockdown.
However, cargoes being shipped to Japan fell by 10 from 46 in March to 36 in April. This nonetheless marked a y/y increase from 33 in April 2019.
At the same time as deliveries to China have risen, however, warnings have come that deteriorating trade relations between Beijing and Canberra could have a nega- tive impact on LNG trade between the two. Nonetheless, EnergyQuest’s CEO, Graeme Bethune, said there was little scope for China to cut its imports of Australian LNG even if trade hostilities did escalate. This was attributed to the fact that most deliver- ies to China from Australia are made under long-term contracts, with little flexibility for cancellations.
“You could imagine a situation where a small amount of cargoes could be delayed, or can’t land, to make a point, but it’s hard to see any material impact,” Bethune said. He believes that it is not in China’s interest to impose tariffs on Australian LNG, as this would hurt the country’s own buyers.
EnergyQuest estimates that on an annualised basis, Australia’s shipments have reached 84.2mn tonnes per year, up from its previous record of 77mn tpy in 2019.™
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