Senex Energy announced that it had agreed to sell its Roma North natural gas processing facility and pipeline to major energy infrastructure operator Jemena for $50 million and entered into a long-term gas tolling agreement.
Senex began construction of the Roma North gas processing facility and pipeline in November 2018. Construction has been completed on-time and on-budget, with commissioning now underway.
Under the terms of the agreements, Jemena will take ownership of the facility and pipeline on the achievement of agreed performance tests, expected in September 2019 (completion). Jemena will then process and transport natural gas from Senex’s Western Surat developments to market under a long-term gas tolling arrangement.
Key terms of the agreements include:
• Cash consideration of $50 million to be paid on completion.
• Gas tolling agreement providing firm capacity service to Senex, with Senex to pay a capacity-based tariff to Jemena in accordance with an agreed production profile.
• Initial processing capacity of ~6 PJ/year (16 TJ/day) with provision for low cost expansion to ~9 PJ/year (24 TJ/day) at Senex’s option.
• Provision for further processing capacity expansion up to the designed site capacity of ~18 PJ/year (48 TJ/day).
• Initial term of 21 years ending 31 December 2040, with an option to extend up to 10 years.
Upon completion, Jemena will own and operate the gas processing facilities at both of Senex’s Queensland natural gas developments, Roma North and Project Atlas. Proceeds from the sale will support the continued development of Senex’s Surat Basin natural gas developments and other growth projects.
Senex Managing Director and CEO Ian Davies said the rationale for the agreement was compelling for both companies.
“We are pleased to be developing Senex’s significant upstream natural gas acreage position alongside Jemena, a world-class operator of downstream infrastructure.
“With low-cost expansion options designed into the facility and very competitive long-term tariff arrangements, this transaction will accelerate efficient recovery of Senex’s material gas reserves from Roma North and the broader Western Surat acreage.
“Together, Senex and Jemena continue to deliver innovative and flexible solutions to bring more gas to the east coast market at prices that make sense for both producers and customers”, Mr Davies said.