Beach signs deal with BP for WA gas supply

Beach Energy has a deal with BP for the supply of liquefied natural gas from its giant Waitsia project in Western Australia.

Beach will supply gas to BP from a giant WA field.

Beach Energy has agreed to supply liquefied natural gas from its giant Waitsia project in West Australia to BP’s Singapore unit.

Beach told the ASX after the market closed on Monday that it had entered into a heads of agreement with BP Singapore for the sale of 3.75 million tonnes of gas produced from Waitsia Gas Project Stage II.

Waitsia is ranked as one of the largest gas fields ever discovered onshore in Australia with stage II including a 250 terajoules a day processing plant.

Gas will processed through the North West Shelf LNG facilities in Western Australia, in which BP is a stakeholder. The North West Shelf is Australia‘s biggest and oldest LNG project and has been shifting its focus to become a facility that processes gas into LNG for third parties as it runs out of gas.

Beach said significant economic benefits would flow to the region from the financial investments being made during both construction and operating phases.

From a single focus on reserves in the Cooper Basin, Beach has been catapulted into a major energy player with production in five basins including Western Australia and New Zealand.

Beach, with its domestic gas supply focus, has been able to lean on fixed price gas contracts to avoid bigger fallout from tough market conditions.

Liquefied natural gas producers are exporting at record rates as Asian prices for the fuel trade at the highest seasonal levels for a decade, echoing a surge in coal prices since the start of the year.

Beach CEO Matt Kay has sealed a deal with BP

Combined LNG supplies from the three Queensland LNG plants have soared to the highest volumes on record over July and August and are running up to 20 per cent higher than this time last year, according to consultancy Energy Edge.

Exporters have partly been responding to a jump in Asian LNG prices to nearly $US20 a gigajoule, an unexpected boost for producers, with the last price spike occurring in January when buyers were caught out by freezing winter temperature.

LNG spot prices have doubled in the last three months while gas to be delivered in February 2022 is also twice as high as levels at the end of April. LNG exports rose to $10bn over the three months to July 2021, a 17 per cent increase on the previous quarter, the Australian Bureau of Statistics said.

Beach shares closed 4.22 per cent higher at $1.24 on Monday. Beach chief executive Matt Kay will provide an investor briefing Tuesday.

Originally published as Beach signs deal with BP for WA gas supply