APA to buy and upgrade Orbost plant

A schematic of the Sole Field development.

A schematic of the Sole Field development.

APA Group and Cooper Energy have signed a Heads of Agreement (HoA) for the development of Gippsland Basin gas projects to bring new sources of gas supply to south east Australia.

Under the terms of the HoA, the two companies have agreed to exclusively negotiate APA’s acquisition, upgrade and operation of the Orbost Gas Processing Plant in Victoria in conjunction with Cooper’s development of the offshore Sole Gas Field.

The transaction basis to be finalised will include the following elements:

  • APA will acquire the Orbost Gas Processing Plant from Cooper Energy for an amount reflecting Cooper’s expenditure on the Plant in respect of the Sole Gas Project;
  • APA will fund all capital expenditure associated with the expansion and upgrade of the plant to process natural gas from the Sole Gas Project. Capital expenditure for the upgrade will be approximately $250 million.
  • Cooper will fund all capital expenditure associated with the offshore development of the Sole Gas Project, including all drilling activities, subsea infrastructure, offshore pipeline and the associated shore crossing, anticipated to be approximately $335 million.
  • APA and Cooper will enter into a Gas Processing Agreement for the processing of gas and delivery of gas to market; and,
  • A series of associated agreements will facilitate cooperation between the parties during the construction and development of the Orbost Plant and the Sole Gas Project and their ongoing operation.

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