Australia’s Beach Energy said it has signed a heads of agreement to supply LNG to a unit of energy giant BP.
Under the deal, BP Singapore would buy about 3.75 million tonnes of Beach’s expected LNG volumes from the second stage of the Waitsia gas project in Western Australia, Beach said in a statement on Monday.
As previously reported, Japan’s Mitsui & Co and Beach have in December taken a final investment decision on the expansion project. Prior to that, the partners signed third-party tolling deals with Australia’s Woodside and its North West Shelf LNG venture participants.
BP is also a partner in the NWS LNG project. The firm would buy Beach’s share of LNG from Waitsia gas project stage 2 on a free on board basis, the statement said.
According to Beach, the supply from the NWS LNG facilities would start in the second half of 2023.
The agreed LNG price would be linked to both Brent and Japan Korea Marker (JKM) price indices and includes a downside price protection mechanism, Beach said.
This hybrid pricing structure would provide Beach with “favourable price movements during North Asia winter periods.”
Beach and BP expect to sign a fully termed LNG supply and purchase agreement in the second half of fiscal 2022.