Australian oil producer Triangle Energy has signed a binding agreement with BP to store oil at the Kwinana refinery site near Fremantle in Western Australia, and an offtake deal with BP Singapore.
BP announced in November 2020 that it would cease refining operations at the Kwinana refinery as it is no longer economically viable, and that it would convert the site into an import terminal. The product storage and services agreement lasts for one year from 22nd April 2021, and the companies have agreed to discuss the possibility of extending the agreement by a mutually agreed term.
Under the terms of the agreement, BP Kwinana will provide access to and use of the BP Kwinana facility to store crude oil, and will provide services associated with the storage and lifting of the crude oil product. The oil, which will come from Triangle’s Cliff Head oil field, will be stored in two tanks as a commingled product with crude and condensate from other producers also using the storage facility. Triangle will pay a monthly capacity rental charge and a throughput fee per barrel.
The non-binding offtake agreement with BP Singapore proposes that BP Singapore purchase all the crude that Triangle produces from Cliff Head, commingled with crude and condensate of other producers, on free on board (FOB) BP Kwinana terms. It is conditional on other proposers using the Kwinana storage terminal. The initial term of the agreement will be two years from when these conditions are met. BP Singapore will have last right of refusal on all Cliff Head production, including after the expiry of the formal offtake agreement.