Beach Energy, BP sign Waitsia LNG agreement

Beach Energy Ltd. has entered a heads of agreement with BP Singapore Pte Ltd. for BP to purchase 3.75 million tonnes of LNG from Beach, sourced from the Waitsia gas development onshore North Perth basin in Western Australia.

The supply is expected to begin during second-half 2023 and continue for 5 years. The supply represents all of Beach’s expected LNG volumes from Stage 2 of the Waitsia gas project.

Gas from Waitsia will be piped north to the North West Shelf gas processing infrastructure on the Burrup Peninsula near Karratha and will be the first third party gas supply into the North West Shelf LNG plant.

LNG will be delivered on a free-on-board basis from the Burrup infrastructure where BP is joint venture participant.

The LNG price has not been disclosed, but is linked to both Brent and Japan Korea marker price indices and includes a downside price protection mechanism.

Beach is a partner in the Mitsui-operated, 50-50 joint venture Waitsia project. The field is rated as one of the largest gas fields discovered onshore Australia.

Waitsia Stage 2 is a US$750-800 million project that involves further development to produce around 760 bcf of gas at a rate of 250 terajoules/day.

In August 2020, the Waitsia project was granted an exemption from the Western Australian Government’s domestic gas reservation policy which enables up to half of the Waitsia production to be exported as LNG via the North West Shelf infrastructure.

Beach and BP aim to execute a fully termed LNG supply and purchase agreement in the second half of the 2022 financial year.