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AsianOil COMMENTARY AsianOil
Beach, BP finalise LNG offtake agreement
Beach Energy has finalised an agreement to supply LNG to BP, as it seeks to diversify its commodity pricing exposure and capitalise on high gas prices
PROJECTS & COMPANIES
WHAT:
Beach has agreed to supply LNG to BP from the Waitsia Stage 2 project in Australia.
WHY:
The company is seeking to diversify its exposure to commodity pricing and benefit from high gas prices.
WHAT NEXT:
Development of Waitsia comes as calls intensify in Australia for producers to prioritise the domestic gas market over exports.
BEACH Energy has finalised a sales and pur- chase agreement (SPA) to supply LNG to BP from the Waitsia Stage 2 project, which it is developing jointly with Mitsui & Co. Under the agreement, all 3.75mn tonnes per year (tpy) of Beach’s anticipated LNG volumes from Waitsia Stage 2 will be sold to BP.
The move represents a push by Beach to diversify its commodity pricing exposure while capitalising on high natural gas prices.
“Signing of the LNG SPA with BP is a sig- nificant milestone in our delivery of material growth and another step closer to Beach becom- ing a supplier of LNG to the global market,” stated Beach’s CEO, Morné Engelbrecht. “Once LNG sales commence, Beach will have further diversified its commodity pricing exposure. Beach’s oil and gas portfolio will provide expo- sure to Brent oil prices, spot LNG prices, East Coast, West Coast and New Zealand domestic gas prices, and oil-linked gas prices. This places Beach in an enviable position within the Aus- tralian energy sector,” he added.
Further development
Waitsia is one of the largest onshore natural gas fields ever discovered in Australia according to Mitsui. The company has described Stage 1 of the project as essentially an extended production test, with two wells connected to the refurbished Xyris production facility.
Stage 1 supplied around 10 terajoules (268,421 cubic metres) per day from August 2016 until December 2019. An expansion of Stage 1 saw a third well brought online, as well as a pipeline constructed from Xyris to connect to the nearby Dambier-to-Bunbury gas pipe- line. This raised Stage 1’s production to 20-30 TJ (536,843-805,265 cubic metres) per day as of August 2020.
Under the Stage 2 project, Mitsuit and Beach are aiming to fully maximise the Waitsia field’s potential, and are building a 250 TJ (6.7mn cubic metre) per day processing plant that will be fed by up to eight production wells phased in over a 15-year lifecycle. Gas will then be sent to the North West Shelf LNG project via the
Waitsia is one of
the largest onshore natural gas fields ever discovered in Australia according to Mitsui.
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Week 32 12•August•2022