Join our daily newsletter At The Bell to receive exclusive market insights
- Oil producer Triangle Energy (TEG) has signed a product storage and services agreement with BP’s Kwinana Refinery
- Under the agreement, BP will allow Triangle to store its crude oil product at the Kwinana facility for at least a year
- Triangle Energy has also agreed to terms with BP Singapore under a non-binding term sheet for a product offtake agreement
- Under the proposal, BP Singapore would buy the Cliff Head oilfield’s entire crude production at a fixed Brent discount
- Triangle Energy is up 12 per cent and trading at 2.8 cents per share
Oil producer Triangle Energy (TEG) has signed a product storage and services agreement with BP’s Kwinana Refinery.
Previously, Triangle Energy had a supply agreement with BP, under which it would deliver crude oil from its Cliff Head Oil Project to BP’s Kwinana Refinery. However, this all changed in November 2020, when BP announced that it would be stopping fuel production at the refinery and converting it into a fuel import terminal.
Soon after, Triangle Energy’s operator of the Cliff Head Joint Venture entered into a binding agreement with BP’s Kwinana Refinery to make a new arrangement.
Under the newly signed product storage and services agreement, BP will provide access to its Kwinana Refinery, allowing Triangle to use it for storing its crude oil product.
In return for the services associated with storage and lifting of the product, the company will pay BP a monthly capacity rental charge, as well as a throughput fee per barrel. The charges may change, depending on if other users start or stop using the facility.
The agreement between Triangle and BP has an initial term of one year from April 22, 2021. However, the companies will discuss the potential for an extension of the agreement term.
In related news, Triangle has also agreed to terms with BP Singapore under a non-binding term sheet for a product offtake agreement. The term sheet proposes that BP Singapore will buy the entire crude production quantity from the Cliff Head oilfield, at a fixed discount to the Brent Crude price.
While the term sheet is currently non-binding, the negotiations thus far have given Triangle’s Board “a reasonable basis to believe that a binding […] agreement will be entered into in the coming weeks”.
Triangle Energy is up 12 per cent, trading at 2.8 cents per share at 12:24 pm AEST.
