Metgasco and Vintage Energy have executed a gas sales agreement (GSA) for the Vali gas project with AGL, marking a milestone for the ATP 2021 joint venture.
Metgasco (25 per cent) and Vintage (50 per cent) share interest in the APT 2021 Vali gas project with Bridgeport (25 per cent), and signed the GSA with AGL for the supply of between 9–16 petajoules (PJ) of gas from the gas field.
Inaugural cash flow from the sale of gas is to be delivered from 2022, which is when Vali Field is expected to start up, through to the end of 2026.
Following a competitive process, the terms of the agreement are consistent with the heads of agreement between AGL and the joint venture parties announced December 6, 2021.
AGL’s costs for the gas created during the production appraisal will be based on a mix of fixed and variable market rates.
The deal also involves a gross $15 million pre-payment to be made by AGL in three equal tranches to fund the work program to take the project to first gas.
Vali gas production is expected to commence following the completion of the field’s three wells in addition to the connection to the nearby Moomba gas-gathering network.
“The execution of the GSA with AGL is a significant milestone for Metgasco and underpins our transition to becoming a gas producer in mid-CY2022,” Metgasco managing director Ken Aitken said.
“Commercialisation of Vali represents the culmination of a long process of value creation by Metgasco, from initial application for ATP2021, technical appraisal, farm-out and, with our partners, a highly successful exploration drilling program.
“The GSA to sell up to 16PJ of gas to AGL will deliver significant cash flow to the joint venture over the term of the contract and provide the joint venture with an upfront payment for funding capital works required to achieve first gas.”
Vali capital works related to the commencement of production are advancing in accordance with the timeline, with first gas to be delivered around the middle of this year.
Site works at Vali have also begun in preparation for the conduct of operations later this month.