Bridget Carter in 'The Australian' on Wednesday 1 December 2021...

Bridget Carter in 'The Australian' on Wednesday 1 December 2021 writes:

Cooper Energy is believed to be in talks with the APA Group to purchase the Orbost Gas Processing Plant.

Expectations are that Cooper Energy will pay about $200m for the asset, 375km east of Melbourne on the Victoria east coast.

The two groups had formed a joint venture for the Sole Gas Project, comprising an offshore project to develop and connect the gas field managed by Cooper Energy and an onshore project managed by APA to upgrade the Orbost gas plant to process Sole gas for supply into the Eastern Gas Pipeline.

However, the gas plant has faced delays and faults with its design capacity, which has impacted Cooper’s Sole operations.

APA acquired the Orbost plant from Adelaide-based Cooper Energy in 2017.

Under the deal, APA was required to upgrade the facility and process gas from Cooper Energy’s flagship Sole gas project in the eastern part of the Gippsland Basin.

APA had a contractual undertaking to provide processing capacity at 68 terajoules of gas daily, but it was only able to produce last year at a capacity of 42 terajoules.

Under the terms of the transition agreement, APA was required to compensate Cooper Energy for costs associated with sourcing back-up gas supplies to service customers of the Sole project.

In a report last year in The Australian, Cooper Energy managing director David Maxwell said around 11 per cent of the gas supplied under the agreements had been delivered from alternative sources due to the production issues at the Orbost plant.

In February, APA announced impairments related to the plant of $249m.

For the year to June, the Adelaide-based Cooper Energy posted a net loss of $30.03m, down from an $86.03m loss the previous year, on record revenue of $131.7m, up 69 per cent.

While delivering the result, Mr Maxwell said Cooper had received the maximum damages available to it under its agreement with APA