APA Group has entered into non-binding heads of agreement with Cooper Energy to develop Gippsland Basin gas projects in Australia.
The deal will allow the partnership to bring new sources of gas supply to south east Australia.
Under the deal, the firms will negotiate APA’s acquisition, upgrade and operation of the Orbost gas processing plant in conjunction with Cooper’s development of the offshore Sole Gas Field.
As per terms of the deal, APA will purchase Orbost Gas Processing Plant from Cooper Energy. It will fund all capital expenditure associated with the expansion and upgrade of the plant to process natural gas from the Sole Gas project.
The expansion and upgrade of the project is expected to cost around A$250m ($192m) for the company.
Cooper Energy will provide funding for the offshore development of the Sole Gas project, including all drilling activities, subsea infrastructure, offshore pipeline and the associated shore crossing. The capital expenditure for the project is expected to be around A$355m ($272m).
Both companies will also sign gas processing agreement for the processing and delivery of gas by APA to market.
In addition, the firms will sign a series of associated agreements to facilitate co-operation between the parties during the construction and development of the Orbost gas processing plant and Sole gas project and their ongoing operation.
These agreements will enable Cooper to process natural gas from the Manta gas field and APA to process third party gas through the Orbost gas processing plant.
APA managing director Mick McCormack said: "APA has been seeking opportunities to fund and develop new projects in the midstream infrastructure sector.
“Acquisition and development of the Orbost gas processing Plant represents a significant opportunity for APA to expand this aspect of its business.”