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Cooper Energy poised to get its Sole, Downer leaves site

Street Talk has been on gas watch. And in our sights has been Cooper Energy’s delayed Sole project in south-eastern Victoria, the state worst hit by the tightness in east coast gas supply.

It’s understood contractors from Downer have been demobilising at the Orbost gas plant – owned by APA Group – which would process the gas from the Sole field. Getting this plant up and running is the last hurdle to Sole becoming a producing asset.

[To be clear, APA owns the processing plant while Cooper owns the gas field]

It is expected Downer will hand over the plant’s reins to APA in the coming days, which would then begin first phase commissioning and following that would start processing gas from the Sole project.

It’s believed the first gas processed from Sole would be in early 2020.

The near completion of the Orbost gas plant would be welcome news for Cooper’s management and shareholders. The delay caused the $876 million company to defer production and Cooper was receiving liquidated damages during the deferral period.

The Sole project accounts for 78 per cent of Cooper’s gas reserves and is expected to account for around 80 per cent of gas production.

Once production kicks off, the Sole asset would become significantly de-risked. Street Talk would be willing to bet the likes of Beach Energy and Mitsui are watching with interest.

The news comes as oil and gas producer Senex Energy’s Atlas project in Queensland delivered its first gas to state-owned power generator CleanCo. Within weeks it will start delivering gas to building products maker CSR.

The Atlas project is the first in Queensland where output is exclusively for domestic use.

Source: Financial Review