As presented at Nexus Energy Limited’s (Nexus) Annual General Meeting (AGM) on 17 November 2011, the commercialisation of the Crux asset to maximise shareholder value remains the company’s prime focus, said Nexus in a press release.
Since the AGM, there has been substantial progress on the various commercialisation options. These options have been progressed in parallel with the development of the Crux liquids project and other value options, such as a Shell integrated gas/liquids project or asset realisation (in part or whole).
Nexus remains on track for a Final Investment Decision (FID) for the first quarter of 2012 and the timeline of first production in accordance with terms of the AC/L9 production licence. The documentation process continues with the identified China led joint venture partners and lenders, with both progressing within the targeted FID timeline.
In addition, the Crux liquids project development planning process has progressed. This includes advancement towards an Early Contractor Involvement Agreement (Agreement) with a counterparty by the end of this year.
The Agreement is the precursor to the award of an Engineering Procurement Construction and Installation (EPCI) contract in respect of the delivery of an FPSO for the Crux liquids project.
Gas via Prelude FLNG
Simultaneously, Nexus has also been holding detailed discussions with Shell Development Australia (Shell) to consider the development of the Crux field via a Shell led integrated development. This development scenario could provide for a Shell led development of the gas and liquids together that would be developed either by Shell’s Prelude FLNG facility or alternatively a standalone development. Any AC/L9 Crux title changes under such a scenario would need the approval of the Department of Resources of Energy and Tourism.
As a result of these discussions with both Shell and Osaka Gas, Nexus has received from Shell an offer for the Crux joint venture partners to extend the Crux liquids project handover option exercise date to the 31 March 2012 (previously 31 December 2011). Shell’s offer allows for the handover date to be extended from 31 December 2020 to 31 December 2023 at the election of the Crux joint venture partners by 31 March 2012.
Nexus Chairman, Michael Fowle r said, “The option extension enables Nexus to fully evaluate the alternative Shell led integration of Crux liquids and gas in parallel to the Crux liquids project. The Australian Government, through the Department of Resources of Energy and Tourism, has been kept fully informed throughout all the negotiation processes and Nexus will continue to work with all parties to ensure that the optimal Crux commercialisation strategy is achieved.”
[mappress] Offshore Energy Today Staff, December 21, 2011; Image: Nexus