Cooper Energy Ltd. reported Monday the signing of a Heads of Agreement (HoA) with O-I Australia defining the key terms for the sale of gas from the Sole gas field in the Gippsland Basin, Australia. The HoA is the first agreement for the supply of gas from Sole, which is currently in Front End Engineering and Design (FEED) in preparation for the Final Investment Decision (FID).
The HoA sets out the key commercial terms for the supply of gas of one petajoule (PJ) per annum for the lesser of eight years, or the life of the field, from Cooper Energy’s share of Sole production. The volume contracted represents 8 percent of the company’s share of the field‘s anticipated production. Cooper Energy holds a 50 percent interest in Sole and the Orbost Gas Plant, from which the gas will be supplied to O-I Australia, with the balance being held by Santos Limited.
The terms set out in the HoA will form the basis of a fully termed gas sales agreement which will be subject to an affirmative FID for development of the field. It is expected the FID will be made by September 2016, and that first supply from Sole to O-I Australia would commence in January 2019.
O-I Australia’s parent company Owens-Illinois, Inc. (O-I) is the world’s leading glass container manufacturer and operates four manufacturing plants in Australia.
David Maxwell, managing director of Cooper Energy, said the HoA marked another important milestone in the development of the Sole gas field to help meet Eastern Australia’s gas demand.
“Gas projects require the support of customers, and we are delighted to have a buyer of the calibre of O-I Australia commit to be our first customer for Sole” he said.
O-I Asia Pacific President, Timothy Connors welcomed the opportunity to partner with Cooper Energy for long-term gas supply to O-I Australia.
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