Oz Key Inks Gas Processing MoU with Santos, Beach
Australian oil and gas junior Key Petroleum has signed a memorandum of understanding with Santos and Beach Energy for processing and transportation of gas from its Tanbar project in Queensland.
The MoU forms the basis for the negotiation of a future formal processing and transportation agreement allowing raw gas from Key’s Tanbar gas project located in ATP 924 in Queensland to be processed into sales gas to supply the east coast Australian gas market, Key said March 11 without disclosing the commercial terms of the deal.
Santos and its joint venture partner Beach Energy own gas processing facilities at Moomba in South Australia.
Key’s managing director, Kane Marshall, said, “We are delighted to be working with Santos and Beach Energy and this MoU demonstrates a clear pathway to commercialisation of future gas discoveries within our Tanbar gas project, subject to final binding terms being agreed.”
“Importantly, there is flexibility for financing of future developments whereby capex intensive gas processing infrastructure may not be required if it can be processed and transported via Santos-operated infrastructure in the manner contemplated by this MoU. 2019 looks set to be a busy year for Key and we look forward to providing our shareholders updates of further developments in relation to each of our Perth Basin and Cooper Basin projects,” Marshall said.
Gas prices have been surging in the east coast markets. As the current gas shortage is likely to continue the gas price should remain high and drive gas exploration projects on the east coast of Australia, Key said.
Key’s 100%-owned south-west Queensland permit ATP 924, containing the Tanbar gas project, has been estimated to contain current gross unrisked prospective resources of 500bn ft3 of gas (best estimate).