Senex Energy Limited (Senex, ASX: SXY) today announced it has executed agreements with major infrastructure operator Jemena to partner on the accelerated development of Project Atlas.
Following the successful conclusion of a competitive bid process, Senex has partnered with major infrastructure operator Jemena to deliver first gas to the domestic market by late 2019
Jemena will build, own and operate a gas processing facility with an initial capacity of 40 terajoules per day (32 terajoules per day of firm service at plateau) and an approximately 60 kilometre pipeline (the downstream infrastructure) to process and transport gas from Project Atlas via the Darling Downs Pipeline to the Wallumbilla hub
Jemena will fund capital expenditure of approximately A$140 million associated with the design, construction and commissioning of the downstream infrastructure
Senex will pay an agreed tariff for delivery of sales gas to the domestic market over a 25 year term
Senex Managing Director and CEO Ian Davies said the agreement was an important step forward for Project Atlas.
“We are extremely pleased to be partnering with Jemena to develop Project Atlas. Jemena operates significant gas infrastructure across the east coast and their involvement in Project Atlas will allow us to focus our efforts and capital on the upstream, delivering gas to domestic customers from late 2019.
“This transaction delivers a material component of Senex's overall funding requirement, and we are on track to finalise the remaining corporate and development financing in mid-2018. With our financing in place and our path to market established we will then engage with potential domestic gas customers.
“We are systematically bringing together all the critical elements for a successful project to deliver first gas to the domestic market in 2019 – a major achievement for a greenfield gas development,” he said.
Jemena Managing Director Paul Adams said that Jemena was delighted to have been selected as the infrastructure provider to work alongside Senex to develop Project Atlas.
“We are excited to be partnering with Senex to build strategic infrastructure providing a long-term physical connection from this highly productive area of the Surat Basin directly into the Wallumbilla Gas Hub for the benefit of the east coast domestic gas market,” he said.
The following summarises the agreements between Senex and Jemena:
To comprise a gas processing facility with an initial capacity of 40 terajoules per day (32 terajoules per day of firm capacity, and 8 terajoules per day of reserve capacity) and an approximately 60 kilometre pipeline connecting the facility to the existing Jemena-owned Darling Downs Pipeline, north-east of the Wallumbilla Gas Hub
Facility design contemplates expansion capacity for Senex or other third parties
Jemena to build, own and operate the downstream infrastructure, to be
commissioned by late 2019
Jemena to fully fund the downstream infrastructure, expected to cost approximately A$140 million
Senex to deliver raw gas into the downstream infrastructure, and Jemena to deliver sales specification gas into the Wallumbilla Gas Hub, at multiple delivery points
Senex to pay a tariff to Jemena for approximately 220 petajoules of firm capacity over a term of 25 years
Capacity-based tariff payments fixed in-line with an agreed profile (15 year plateau at 32 terajoules per day followed by a diminishing production tail)
ABOUT SENEX ENERGY
Senex is an ASX listed oil and gas exploration and production company focused on generating shareholder value by growing reserves and production. It holds extensive onshore oil and gas acreage in the Cooper and Surat Basins, two of Australia's most prolific onshore energy regions. Senex is well capitalised and has built strong operating credentials over its 30 year history. Senex operates low cost oil producing assets in the Cooper Basin and is progressing a portfolio of gas projects including the Western Surat Gas Project and Project Atlas in Queensland
Jemena owns and operates a diverse portfolio of energy and water transportation assets across the east coast of Australia. With more than $10.5 billion worth of major utility infrastructure, Jemena supplies millions of households and businesses with these essential services every day.
Figure 1: Location of Project Atlas, Surat Basin Queensland
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