CHJV Binding Offtake Agreement Signed with BP

Source: 10/14/2021, Location: Not categorized

The Cliff Head Joint Venture (CHJV) is pleased to announce that the CHJV participants (Producers) have entered into a Binding Offtake Agreement (Offtake Agreement) with BP Singapore Pte Limited (BP Singapore), in relation to the sale and purchase of its crude oil produced at the Company’s Cliff Head Oil Field. Under the terms of the Offtake Agreement, BP Singapore will purchase 100% of the crude produced from the Cliff Head Oil Field, commingled with crude and condensate of other producers (Designated Seller Groups), on FOB Kwinana terms. Triangle Energy (Operations) Pty Ltd (TEO), will act as the Operating Agent on behalf of all of the Designated Seller Groups in relation to each of their offtake agreements and has entered into an agreement with each of the Designated Seller Groups to govern the provision of these services.

As foreshadowed in TEG’s announcement on 22 April 2021, this Offtake Agreement will operate in tandem with the already executed Product Storage and Services Agreement (Storage Agreement) with BP Kwinana and is based on the terms of the Non-Binding Offtake Term Sheet referred to in that announcement.

The Designated Seller Groups have each entered into a Storage Agreement with BP Kwinana, operating together, pursuant to which the Designated Seller Groups have leased tanks at Kwinana, Perth, Western Australia for storing the Designated Seller Groups' crude oil and condensate on a commingled basis.

The initial term of the Offtake Agreement is aligned with the term of the Storage Agreement. The offtake is for the entire production quantity from the Cliff Head Oil Field, and pricing is at a fixed discount to Brent. BP Singapore has been granted a right to match any offers for the sale of Cliff Head Product sold on a standalone basis for a period of 3 years following the delivery period. The Producers may be subject to penalties and liabilities if they, or another Designated Seller Group member, delivers off-specification product.

Based on current storage levels, the CHJV expects that the first lifting will take place in October 2021. The CHJV intends to provide shareholders with regular production updates to outline the production profile of the CHJV between liftings and to notify shareholders when liftings occur.

TEG Managing Director, Robert Towner said today,
“TEO, as Operator of the CHJV is delighted that the Offtake Agreement has been executed with BP Singapore. This provides certainty to the CHJV regarding upcoming oil production and continues the significant contribution to the West Australian community. The Cliff Head Oil Field, together with its significant infrastructure, is now capable of continuing to take oil to the market, as well as providing the base upon which further exploration and development success in the permit areas may be exploited.

Gulf Oil and Gas
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