Australia's Cooper Energy says project sanction on its A$355 million, Gippsland Basin, Sole gas project is set to be made next month (March).
Cooper acquired the Sole field as part of a deal with Santos over assets in the Gippsland and Otway Basins, offshore Australia. Cooper says first production from West Sole is expected in 2019, following the selection of a two-well subsea development plan, the signing of a heads of agreement with has infrastructure operator APA Group, to own and operate the Orbost Gas Plant, and achieving gas contracting targets, which enables project financing to be put in place.
In addition to the A$355 million subsea development, APA will invest $250 million in the Orbost Gas Plant, in order to receive gas from Sole.
Long lead items (included in the above costs) have been ordered which include the shore crossing pipe and installation contract, subsea tree and wellhead and downhole tubing.
Managing Director David Maxwell said: “Today’s announcement is the product of an intense effort since October to market additional gas acquired from Santos, identify the most value accretive project ownership and the optimal development plan.
"We now move into completing the final phase of the funding process, the last step in enabling the project’s development.”
Drilling costs for the two-well development would be about AU$140 million, compared with $83 million for the single well option, making is more efficient, as well as increasing redundancy and enabling greater extraction of reserves, says Cooper.
Cooper still needs to pass regulatory hurdles to become operator on the Sole gas development, which is expected to be achieved by June 2017.
The current operator, Santos, will continue to perform operatorship responsibilities under contract from Cooper Energy until the transition is effected.
We now move into completing the final phase of the funding process, the last step in enabling the project’s development.”