Photo by: Bloombeg
PERTH (miningweekly.com) – Oil and gas junior Senex Energy has entered into a series of agreements with the owners of the Gladstone liquefied natural gas (GLNG) project, in Queensland, which could lead to the development of its own Western Surat gas project.
Under the terms of the transaction, Senex would receive A$42-million in cash along with a comprehensive suite of technical data to accelerate and derisk a final investment decision on its Western Surat project, in exchange for an exploration permit within the GLNG exploration acreage.
Furthermore, Senex has also agreed to supply up to 50 TJ/d of gas from its Western Surat gas project to GLNG under a binding, 20-year sales agreement.
The parties have also flagged potential shared use of existing GLNG water treatment and gas processing infrastructure, and potential raw gas sales and raw water disposals from the Glenora pilot to allow for early gas sales.
Senex MD Ian Davies said on Thursday that the execution of the long-term agreements with the GLNG participants delivered a clear commercialisation and financing pathway to enable Senex to proceed with a final investment decision for its Western Surat gas project.
“These transactions will deliver significant value to Senex through enabling an accelerated monetisation of our material resource base. This is a natural relationship given our acreage sits adjacent to GLNG’s Roma fields.”
Davies noted that the provision of production and subsurface information from these operating fields, along with close collaboration with GLNG would be hugely valuable to the efficient development of both projects.
Senex was targeting first production from the Western Surat basin in 2017, with the project representing a near-term opportunity to develop a new major revenue stream for Senex.
Meanwhile, GLNG operator Santos on Thursday announced first LNG production from the project.
The $18.5-billion project involves developing gasfields from the Bowen and Surat basins in south-western Queensland and transporting the gas through a 420 km underground pipeline to a two-train LNG plant on Curtis Island, off the coast of Gladstone, with the capacity to produce 7.8-million tonnes of LNG a year at full capacity.
Santos MD and CEO David Knox said first LNG production marked a significant milestone for the project.
“We said we’d produce first LNG around the end of the third quarter and that’s exactly what we’ve done. Our upstream facilities are now fully operational and performing well, we’re producing LNG on Curtis Island, and we’re now looking forward to safely delivering our first LNG cargo in the coming weeks.”
Santos holds a 30% interest in GLNG, which is also owned by Petronas, Total and KOGAS.