Japan’s Mitsui E&P and Australian partner Beach Energy have secured a gas supply deal for the Waitsia gas development in Western Australia’s onshore Perth basin.

Are you missing out on ACCELERATE?
Gain valuable insight into the global oil and gas industry's energy transition from ACCELERATE, the free weekly newsletter from Upstream and Recharge.

Beach confirmed this week the project partners had signed a five-year gas supply agreement with Clean Energy Fuels Australia (CEFA) subsidiary Mid-West LNG.

The agreement is anticipated to kick off next year and will see the Waitsia joint venture supply CEFA with roughly 2 terajoules of gas per day from the Waitsia Stage 1 development, with the deal also carrying an option to increase the base volume as CEFA’s gas requirements grow in the future.

CEFA is currently in the process of building the first phase of a liquefied natural gas hub in Mount Magnet, which will process gas supplied under the Waitsia GSA into LNG that will be trucked to CEFA’s customers.

Beach Energy managing director Matt Kay said the agreement with CEFA would enable the supply of lower greenhouse gas emission fuels to energy users in Western Australia’s midwest.

“The Xyris Production Facility, which processes gas from Waitsia Stage 1, has recently undergone an expansion and is sustaining production above the planned 20 TJ per day,” he said.

“This means more gas for Western Australian domestic customers and opens up opportunities to support local industry through GSAs such as this one.”

Expansion

Mitsui and Beach are currently in the process of expanding the Waitsia development, with the duo taking a final investment decision late last year on a second phase of development at the onshore field.

The Waitsia Phase 2 development involves the drilling of up to six wells, construction of a new 250 terajoule per day gas processing facility and associated gas gathering infrastructure.

Total capital expenditure to first production is anticipated to be between A$700 million and A$800 million (US$526.4 million and US$601.5 million).

Gas from Waitsia Stage 2 will be sent to the Woodside Petroleum-operated North West ShelfLNG facilities, with Woodside striking a gas supply agreement with the Waitsia joint venture last year to process 7.5 million tonnes of LNG from the field between 2023 and 2028.

Mitsui operates Waitsia in a 50:50 joint venture with Beach.