Australian oil and gas company Beach Energy has signed a deal with BP Singapore regarding the supply of Beach’s share of LNG from Waitsia Gas Project Stage 2.
BP will be purchasing all 3.75 million tonnes of Beach’s expected LNG volumes from the Waitsia Gas Project Stage 2 .
For this, the parties have entered into a Heads of Agreement (HOA) determining all the terms and conditions of the purchase.
To remind, the Waitsia Stage 2 project includes a new gas processing plant with a 20-year life-cycle. The Waitsia Joint Venture partners include Beach Energy and Mitsui E&P. It has recently executed a fully-termed gas processing agreement (GPA) with the Woodside-led North West Shelf (NWS) project.
The supply will start in the second half of 2023. It will be delivered on a free on board (FOB) basis from the NWS facilities in Karratha, Western Australia. Also, BP is an existing participant in the NWS Joint Venture and has a long history of lifting LNG from the NWS facilities.
The statement says this leverages BP’s leading LNG trading and shipping capability.
The agreed LNG price is linked to both Brent and Japan Korea Marker (“JKM”) price indices. This hybrid pricing structure will reportedly provide Beach with favorable price movements during North Asia winter periods.
Finally, Beach and BP are targeting the execution of a fully termed LNG Supply and Purchase Agreement in 2022.