Beach Energy Ltd., Adelaide, agreed to supply LNG to BP Singapore Pte. Ltd. BP will purchase all 3.75 million tonnes of Beach’s expected LNG volumes from the Waitsia gas field Stage 2 project in the onshore North Perth basin of Western Australia.
Supply is scheduled to begin in second-half 2023 and continue for about 5 years.
The agreement contains a hybrid pricing structure that is linked to Brent and Japan Korea marker indices.
The pricing parameters support Beach’s exposure to the current commodity price cycles and put no restriction on upside price participation. In addition, the sales agreement includes a downside price protection mechanism.
Supply will be delivered on an free on board (FOB) basis from the Woodside Energy-operated North West Shelf infrastructure at Karratha. BP is a participant in the North West Shelf joint venture and has a history of four decades of lifting LNG from the Karratha plant.
Waitsia field, in production license L1, is one of the largest onshore gas fields discovered in Australia. It is operated by Mitsui E&P Australia Pty Ltd. with 50% interest. Beach holds the remaining 50%.
Stage 1 development began as an extended production test in 2016 and has since been expanded. From August 2020 Stage 1 has been producing 20-30 terajoules/day of gas via the Dampier-Bunbury trunk line.
Stage 2 development involves additional development wells and new production infrastructure capable of producing 250 terajoules/day. Final investment decision for Stage 2 was made in February 2021 and it is expected on stream in 2023.