Cooper Energy stumps up $55m to help ease domestic gas supply tightness
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More gas suppliers are stepping forward as Eastern Australia struggles to find enough supply for its domestic market.
Cooper Energy (ASX:COE) has committed $55m to finish upgrading its Minerva gas plant to be a processing hub for production and discoveries in the offshore Otway Basin and to connect the facility to the Victoria supply network.
The company and its joint venture partner, Japan’s Mitsui Group, have carried out engineering work on the Minerva plant since acquiring it in December.
Federal Resources Minister Keith Pitt said the investment would support more local jobs and new gas supply for Australia’s south-east.
“It’s an example of how the gas sector is continuing to deliver across Australia and while no sector has been immune to the impacts of the COVID-19 pandemic, the resources industry continued to be a major contributor to the national economy,” he said.
Between 30 and 50 engineering jobs and 20 operational jobs will be created by the fresh investment.
Minerva will process gas from Cooper Energy’s existing Casino, Henry and Netherby fields offshore Victoria. The plant will process 16 petajoules of currently undeveloped gas.
Approximately $37m of the $55m investment will go on the Minerva plant upgrade, and $17.8m has already been spent on its front-end design and engineering work.
“This investment decision represents an important milestone in Cooper Energy’s continuing growth as a safe, competitive, efficient and reliable developer and marketer of new gas supplies for homes and businesses in south-east Australia,” managing director David Maxwell said.
Minerva will draw gas from four offshore wells (Casino-4, Casino-5, Henry-2 and Netherby-1) via a pipeline.
First gas is set to flow to Minerva in Q3 2021 following the upgrade, and the plant near Port Campbell in Victoria has the capacity to process 150 terrajoules/day.
The plant is set to be renamed the Athena gas plant in honour of its new processing role for the Otway fields to distinguish from its old role of serving the now depleted Minerva gas field.
Cooper Energy shares are trading steady at 42c.
Meanwhile, Australian gas company Metgasco (ASX:MEL) has completed a share placement for $1.38m to complete and commercialise its Vali gas discovery.
Existing shareholders and institutional investors weighed in for the share issue.
The new shares were issued at 2.5c each, representing a 24.2 per cent discount to the company’s closing price on July 15.
Metgasco’s Vali gas discovery in the Cooper-Eromanga Basin, western NSW, has the potential to be producing within 12 months.
The company said in an investor presentation that new gas discoveries in Australia were needed to meet forecast demand.
“Domestic gas prices are independent of collapsing oil prices. Recent Australian Competition and Consumer Commission papers indicate contract gas pricing in the $9-10/gigajoule range,” Metgasco said.
Queensland gas explorer State Gas (ASX:GAS) has restarted production testing at its Reid’s Dome project in the Bowen Basin, at the Nyanda-4 and Serocold-1 wells.
Production at the wells was interrupted in early 2020 and resulted in the installation of new dewatering pumps. State Gas shares climbed over 5 per cent to an intra-day peak of 48.5c on Monday.