Triangle Energy shares jump on new BP crude oil storage agreement

Triangle Energy (Global) Ltd (ASX:TEG) shares rose as much as 28% on news it had reached an agreement with BP PLC (LON:BP) (NYSE:BP) (FRA:BPE5) to store crude oil at BP’s Kwinana facility in Western Australia. The storage agreement is for one year and brings to an end a period of uncertainty regarding the storage of oil from Triangle Energy’s flagship Cliff Head Oil Field in the Perth Basin. BP Kwinana will provide access to and use of the Kwinana facility to Triangle Energy to store its crude oil product, as well as provide services associated with storage and lifting. Previously, BP stated its intention to cease fuel production at its Kwinana refinery and convert the refinery into an import terminal, and in March BP extended the crude oil supply agreement by one month, leading up to today’s decision. Shares traded up to 3.2 cents today as investors responded positively to the deal. Cliff Head attractiveness Triangle is now considering other oil marketing opportunities available for Cliff Head Oil Field, which last quarter produced and sold 58,148 barrels (an average of 632 barrels of oil per day), and negotiating offtake alternatives for Cliff Head production, managing director Robert Towner said. “Prior to the BP Refinery closure, we had completed our strategy to become the dominant operator of conventional oil licences in the Perth Basin,” he said. “Subject to the completion of the recent acquisitions, we will be the operator of four licences at Cliff Head and these licences are located both offshore and onshore with significant infrastructure capable of taking oil to the market upon exploration and development success and the execution of a binding offtake agreement. “We have significant investment in licences which total 10,000 square kilometres in one of the country’s most exciting hydrocarbon basins. “Additionally, our $25 million holding in State Gas Limited provides significant leverage to the East Coast Gas market.” The details The crude and condensate produced and delivered by Triangle will be stored at BP Kwinana in two tanks as a co-mingled product with crude and condensate from other producers also using the storage facility. BP and Triangle have agreed to “good faith” discussions about an extension of the agreement beyond April 22, 2022. In further good news for Triangle, it has also agreed to terms with BP Singapore in a non-binding term sheet for a related, non-binding offtake agreement for crude oil. Under the two-year deal, BP Singapore will purchase the crude produced from the Cliff Head Oil Field, co-mingled with crude and condensate of other producers, on free-on-board BP Kwinana terms. - Daniel Paproth