Under DBOM model, build risk should have been borne by APA, and non delivery of nameplate capacity should have resulted in a contractually defined pecuniary penalty.
To me it's astounding that COE (payer of a tariff to APA in respect of the processing plant) receive no compensation (as defined by the Project Agreements).
Commercially, the tarriff is based on the build cost amortized over the term of contract, at a cost of capital in which APA would have reflected design, construction risk.
How we are now wearing the construction risk (a risk that we are paying for in the built up tarriff price) and also wearing it through absence of a defined compensation mechanism is baffling and I believe is a commercial failing (Not to mention the lost gas sales at 68TJ v 45TJ that we are producing)
COE should have had this is the Project Agreement. The one job APA had was to deliver a 68TJ plant. How they can have not, and not be paying compensation is mind boggling.
On this basis of the above, I think whoever signed off on that Project Deed needs to be held accountable. I see this as a massive commercial oversight.
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