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Empire Oil And Gas To Finalise Contract For Perth Basin Condensate Production

Empire Oil & Gas (ASX: EGO) will load out condensate stored at its Red Gully-1 well site in the Perth Basin to the BP Refinery at Kwinana to determine the final crude oil contract with BP.

This contract the condensate produced by both the Red Gully-1 and Gingin West-1 wells in EP 389.

Gas from the 2 wells will be sold under the existing gas sales contract with Alcoa, which also underpins the Red Gully processing facility.

The 1000 barrels of condensate stored in test tanks at the site were produced during testing of both Red Gully-1 and Gingin West-1 and the appropriate service companies and oil trucking firm have been contracted to load it out tomorrow.

Gingin West-1 flowed 7.5 million cubic feet (MMcf) of gas and 375 barrels of condensate per day during testing while Red Gully-1 flowed 12MMcf of gas and 832 barrels of condensate.

Empire had not previously being able to truck the condensate from the site as access had being denied until the purchase of land was settled last month.

Partners in EP 389 are Empire (68.75%), ERM Power (21.25%) and Wharf Resources (10%).

Red Gully plant

The Red Gully processing facility is capable of processing 10 million cubic feet of gas per day along with any associated condensate or oil production. There is also provision for the facility to be twinned, doubling its capacity.

Gas from the plant will be piped to the nearby Dampier to Bunbury Pipeline.

Alcoa is paying A$25 million for the first tranche Forward Gas Sales component, which effectively underwrites the cost of the Red Gully gas condensate facility, while the second tranche is a standard gas sales agreement.

The plant is expected to be commissioned in November this year.

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