Triangle Energy has entered into a new agreement with BP that allows the company to use the BP Kwinana refinery to store its Cliff Head crude oil in Western Australia.
The product storage and services agreement will see the crude and condensate produced and delivered by Triangle stored at BP Kwinana in two tanks as a commingled product with crude and condensate from other Producers also using the storage facility.
BP will also provide services associated with the storage and lifting of the crude oil product.
The initial term of the agreement will be one year, with the possibility to extend for one year.
BP announced plans to stop fuel production at the refinery and convert it into a fuel import terminal in October last year, following regional oversupply and sustained low refining margins.
After exploring multiple possibilities for the refinery’s future, BP concluded that conversion to an import terminal was the best option.
The refinery has provided fuels in the state for 65 years. However, BP made the decision because of the growth of large-scale, export-oriented refineries throughout Asia, which have structurally changed the Australian market.
Last month Triangle secured a change in its termination from BP for their crude oil supply agreement.
BP originally advised Triangle that it would terminate the agreement on February 16, 2021, with the Cliff Head oil field to continue to produce and deliver its product to the refinery until then.
However, last month the company extended the date to March 1, 2021 and then changed it to March 22, 2021.
In addition, the company has also entered into an agreement with BP Singapore, who will purchase the crude produced from the Cliff Head oil field.
The offtake agreement will be for a duration of two years from satisfaction of the conditions precedent and will be aligned with the term of the storage agreement.
Triangle managing director Robert Towner said prior to the BP refinery closure, the company had completed its strategy to become the dominant operator of conventional oil licences in the Perth Basin.
“Subject to the completion of the recent acquisitions in relation to the L7(R1) licence at Mt Horner, offshore Exploration Licences EP 437 and WA-481- P, Triangle will be the operator of four licences including WA – 31- L at Cliff Head,” Towner said.
“These licences are located both offshore and onshore with significant infrastructure capable of taking oil to the market upon exploration and development success and the execution of a binding offtake agreement.”