New Crux JV to Accelerate Exploration of Field
Australia's Nexus Energy has inked an agreement with Shell and Osaka Gas following board approvals Friday to form a new joint venture which will accelerate the exploration and development of the Crux gas and condensate field offshore Western Australia.
"The discussions between Nexus Energy, Shell and Osaka Gas have started since five years back. Today, the final agreement is formally signed and executed," a spokesperson representing Nexus told Rigzone on Friday.
The agreement sees Shell taking its place as the operator of the production license AC/L9 with an 80 percent interest. Nexus and Osaka Gas hold a 17 percent and 3 percent interest respectively. The agreement also provides Nexus with a 12 month put option to sell 2 percent of its equity interest in the JV to Shell for $78.6 million (AUD 75 million).
Nexus said in a statement that the JV will initially focus on converting the existing AC/L9 offshore production license into a retention lease. This will require a detailed work program, which include technical studies of a range of development options, including a standalone development concept, and exploration drilling of the Auriga prospect targeted for early 2014.
The development options currently under consideration for the Crux field include a tie-in to Shell's Prelude floating liquefied natural gas (FLNG) vessel or a standalone FLNG project.
Shell's Prelude FLNG vessel – once operational in 2017 – will produce at least 5.3 million tons per annum of liquids (3.6 mtpa of LNG, 1.3 mtpa of condensate and 0.4 mtpa of LPG). Shell's Prelude FLNG vessel will be located in Central Browse.
The Crux field is estimated to hold 1.8 trillion cubic feet of gas and 66 million barrels of liquids, a published presentation by Nexus on November 17, 2011, shows.
The consolidation of the AC/L9 JV is still subject to approval from Australia's Foreign Investment Review Board and Registration of Title.
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