Senex just did a $140m deal to get its coal seam gas to market
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Gas infrastructure operator Jemena will build a $140 million processing plant and pipeline that will get Senex’s Queensland gas to market.
Jemena will build, own and operate a 40 terajoule per day processing plant and a 60km pipeline connecting the facility to its Darling Downs pipeline.
Senex (ASX:SXY) will deliver raw gas to the plant from its Surat Basin coal seam gas fields to Jemena, which will sell into the Wallumbilla Gas Hub.
The distribution network is dubbed “Project Atlas” by Senex.
Senex will pay a fee of about 220 petajoules of firm capacity — the amount of gas in a buyer’s contract that is guaranteed not to be interrupted, rather than reserve supply — over 25 years, as well as capacity-based fees.
“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,” said Senex managing director and CEO Ian Davies.
He said Senex was on track to finalise financing in mid-2018 for the project, and after that would start talking to potential gas customers.
Senex had $83 million in cash at the end of March.
“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.”
Senex shares dipped 1 per cent to 41.5c.
Senex is one of two notable mid-tier oil and gas players in Australia — Buru Energy (ASX:BRU) is the other.
Buru, which operates the Ungani oil field in the Canning Basin in WA, said on Monday that it sent 72,722 barrels of oil away on the Magic Wand oil tanker on June 7.
The sale price was $90 a barrel ($US68), which is the Brent oil price less transport costs.
After selling half of the Ungani field to Roc Oil in May, Buru’s share of that was 58,616 barrels or $5.27 million.
Roc’s share was 14,106 barrels. All future sales will be divvied up on a 50:50 basis.
Buru shares dropped 5.5 per cent to 34.5c.