Australian gas infrastructure company APA Group expects to recognise a pre-tax non-cash impairment of approximately A$249mn (US$193mn) to its Orbost gas processing plant for the 12 months ending December 31, it said on February 18.  

“The impairment reflects increased capital expenditure and reassessment of the plant’s future cash flows following commissioning work during the half-year period,” it said. The charge also reflects the continuation of production levels and expenditure based on the current performance of the asset since re-configuration and resumption of processing at the processing plant, APA added. 

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“APA and Cooper Energy continue to work together to improve the plant’s operation and processing capacity, with the objective to achieve nameplate capacity of 68 TJ/day,” it said. “APA and Cooper Energy have a transition agreement in place and root cause analysis is underway to address gas processing issues to support a reliable and sustainable production rate.” 

The Orbost plant's performance has been impaired by unexplained foaming in the absorber section of the sulphur recovery unit. Work on fixing the problem started on November 14 and involved reconfiguring the plant's absorbers to operate parallel, sequentially, or independently. In December reconfiguration work at the plant got completed as planned and contractual gas supply to industrial customers started. 

The gas plant, which is owned and operated by gas infrastructure company APA, will process gas from Cooper’s Sole gas field offshore Victoria for supply to customers in south-east Australia. Its commissioning enables the start of the field’s term supply contracts and processing tariff payments by Cooper to APA.