Armour Energy of Australia executed a five-year gas sales agreement with Australia Pacific LNG for the supply of natural gas from the Kincora project to the APLNG facility on Curtis Island.
According to the agreed plan, Armour Energy plans to restart gas production and increase the rate to 9 TJ per day, 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 (including commencement of associated liquids production) is planned to be completed by August/September 2017, the company noted in its filing to the stock exchange.
The agreed pricing provides Armour Energy with cash flow certainty for 1.8PJ/a over the first five years, with gas to be delivered to the Wallumbilla gas hub.
In the second phase, Armour Energy plans to drill new wells and to work over and stimulate the existing wells to achieve an increase in gas production to 20 TJ per day over a period of 12 to 18 months from first gas production, reaching 80 percent of the Kincora Gas Plant nameplate capacity.
Since early October 2016, APLNG, a joint venture between ConocoPhillips (37.5%), Origin (37.5%) and Sinopec (25%), began producing liquefied natural gas from both of its trains.
At full capacity, the A$25 billion (US$17 billion) LNG project will be producing 9 mtpa of the chilled fuel.
LNG World News Staff