Armour to Supply Gas to Australia Pacific LNG

Australian Armour Energy has executed 5-year gas sales agreements with Australia Pacific LNG for the supply of gas from its Kincora project in the Surat Basin, Queensland.

The agreement provides Armour with cash flow certainty for 1.8PJ/yr over the first 5 years. Armour’s executive chairman, Nick Mather said: “We are pleased to have secured an offtaker of the quality of Australia Pacific LNG as our foundation customer for the Kincora project. With these agreements in place, we can move forward with confidence on the Kincora project restart with strong known cashflows underpinning the early years of the project.”

Supply of gas from the Kincora project has been planned in two phases. Phase one is expected to see the restart of gas production, commissioning and then increase production rate to 9 TJ/d (3.3 PJ/yr) with production initially from the Newstead storage facility and then various wells across the fields that were last in operation. First gas production and commencement of gas sales is targeted to be achieved by June 2017, and the balance of the restart program is planned to be completed by August/September 2017.

Phase two will involve the drilling of new wells plus workovers and stimulations of existing wells to achieve an increase in gas production to 20 TJ/d over a period of 12 to 18 months from first gas production.

The Newstead storage facility currently holds about 2.3 PJ of treated gas which is expected to require minimal re-processing.

Shardul Sharma