The transaction remains subject to Cooper completing a debt raising and making a final investment decision on the Sole gas project and obtaining requisite approvals.
“We are pleased to have reached a binding agreement with Cooper Energy on this transaction, at a time when there are calls for increased gas supply into the east coast gas market,” said APA’s Managing Director Mick McCormack.
“This project fits our successful and sustainable investment criteria, as it is an energy infrastructure asset that is underwritten by a long-term contract and meets our return criteria.
“It leverages our current skills in gas processing and compression facilities and our expertise in the midstream infrastructure sector.”
The plant will be connected to Cooper’s Sole gas field via a sub-sea pipeline and control umbilical that will be constructed by Cooper, and there is scope in the agreement for the plant to process gas from the nearby Manta gas field.
There is an existing pipeline connection to Patricia-Baleen and Longtom gas fields which can also deliver gas for processing through Orbost.
Commenting on the transaction, Cooper Energy Managing Director David Maxwell said it was a good result for both companies.
“We are pleased with the outcome which represents a win-win for both companies and establishes a sound basis for a mutually beneficial long-term relationship that extends beyond Sole to include the second phase of our Gippsland gas development,” said Mr Maxwell.
“We are looking forward to finalising the final element of the Sole project funding plan, consistent with our schedule for first gas.”
The Sole gas project will develop the Sole gas field located in VIC/L32 in the Gippsland Basin, offshore Victoria, to supply 25 PJ/a.
Sole will bring 249 PJ of gas to south east Australia, the major share of which has been contracted to a portfolio of buyers including AGL, Energy Australia, Alinta Energy and industrial user O-I Australia.
Cooper Energy is the 100 per cent interest holder in the Sole gas field.