Armour to start supply of gas to APLNG by June

JOHANNESBURG (miningweekly.com) – ASX-listed Armour Energy has entered into a connection agreement with APA Group, giving the company access to the Roma-Brisbane pipeline at Wallumbilla, which will allow it to supply gas to Australia Pacific Liquefied Natural Gas (APLNG).

Under a ten-year contract with APA, a key gas transport provider servicing the east coast gas market, Armour has a connection for up to 30 TJ/d gas into the Roma-Brisbane pipeline.

“This is an essential component in us being able to access the broader east coast gas market, including a wide range of industrial customers, wholesale customers and traders and other LNG producers,” Armour said in a statement on Monday.

Armour chairperson Nick Mather said the company will start supplying gas to APLNG as soon as the restart of its Kincora project is completed.

The first phase of the Kincora project involves the recommissioning of the gas processing and compression facilities, followed by an increase in the gas production rate to an initial 9 TJ/d.

Gas production will initially be from the Newstead storage facility with various existing wells across the fields progressively brought back into operation.

Armour is now targeting first gas production and sales under the APLNG offtake agreement for June, with the balance of the restart programme planned to be completed between August and September.

The second phase of the project will involve the drilling of new wells plus workovers and stimulations of existing wells to achieve an increase in gas production to 20 TJ/d. This will take place over 12 to 18 months from first gas production and will take the total gas production rate to an estimated 70% of the Kincora gas plant’s nameplate capacity.

Subject to operational performance, further production increases will be pursued to achieve 100% plant capacity.

Associated liquids production from the project historically averaged 9 942 barrels of condensate (a light oil) per picojoule of gas produced, and 2 066 t of LPG per PJ of gas produced.

Based on these historical production rates, at a gas production rate of 20 TJ/d liquids production is expected to reach 198 barrels of condensate and 41 t/d of liquefied petroleum gas.