PERTH (miningweekly.com) – ASX-listed Senex Energy has struck a long-term domestic gas sales agreement with fellow-listed construction materials and industrial minerals manufacturer Adbri.

Under the terms of the agreement, Senex would supply up to 11 PJ of natural gas to support Adbri’s South Australian manufacturing operations from January 2023 until 2030.

“Senex is delighted to welcome Adbri as a new long-term customer into our growing portfolio of leading manufacturers and power generators, broadening our reach throughout the east coast of Australia,” said Senex MD and CEO Ian Davies.

Since 2019, Senex has inked nearly 60 PJ of natural gas sales agreement with a number of companies, with Senex earlier this week announcing the supply of 1.7 PJ of gas to Nyrstar’s metal processing plant, also in South Australia.

The Australian Petroleum Production and Exploration Association (Appea) on Thursday said that the supply agreement between Senex and Adbri showed that the gas market was working.

“These two gas sales agreements announced in the past two days mean there have now been 106 agreements to supply gas to major domestic customers since 2012,” said Appea CEO Andrew McConville.

“This is just another example of a domestic manufacturer taking advantage of consistently lower gas prices since 2016. The truth is domestic users are paying considerably less for Australian gas over the long term than overseas markets and have been doing so for some time.

“While we acknowledge those affected by the recent fluctuations in spot prices due to a number of uncontrollable factors, the vast bulk of manufacturers are like Adbri and are on longer-term contracts where prices do not fluctuate in line with spot price movements,” McConville said.

“Everyone knows the cheapest gas is the gas closest to markets and if some states opened the door to gas, prices could be even lower over the long term.

“Gas has showed how reliable it is throughout the pandemic and with the breakdown of other energy sources, the industry has continued to do the heavy lifting to ensure the lights are kept on, factories kept running and that there is no gas shortfall in the domestic market.”

Federal Resources Minister Keith Pitt on Thursday also congratulated the two companies on the transaction, saying the agreement demonstrated confidence from both sides that affordable gas could be developed by producers and that manufacturers continue to have an important place in the Australian economy.

“Senex and other companies are safely and successfully developing gas resources for Australian households and Australian businesses. We can’t be following the examples of New South Wales and Victoria where the answer is to bow to activist pressure and just lock up our gas resources. 

“If states want to lock up their resources, then I encourage industry to move to where the gas is being developed and avoid the red tape, energy uncertainty and transportation costs that accompany knee-jerk and unscientific bans and moratoria like we see in New South Wales and Victoria,” Pitt said. 

His comments come after New South Wales Deputy Premier John Barilaro earlier this week unveiled the Future of Gas Statement which reduced the area of land available for gas exploration by some 77%, and cancelled a significant number of exploration licences, apart from those deemed necessary for oil and gas major Santos to develop its Narrabri gas project.