PERTH (miningweekly.com) – ASX-listed Senex Energy has inked another domestic gas sales agreement over its Project Atlas.
The company on Tuesday announced that it had signed a sale agreement for up to 10.5 PJ of natural gas to glass-packaging manufacturer O-I Australia. The five-year agreement would see Senex supply 1 PJ of gas a year, starting in 2021, with O-I able to elect to increase the total contract volume by up to an additional 1.1 PJ a year over a five-year term, starting no earlier than January 2022.
The gas will be supplied at the Wallumbilla gas hub, in Queensland, at a fixed price in line with current market levels, indexed annually.
Senex MD and CEO Ian Davies told shareholders that the company was proud to again support local manufacturing, jobs and investment with the supply of Queensland-sourced gas.
“We are delighted to secure O-I Australia as a customer and support this leading glass-container manufacturer, employing 1 050 people across Australia. This agreement marks the third domestic gas contract for Senex’s Project Atlas natural gas development, bringing the total volume under contract to over 23 PJ. These contracted volumes are systematically de-risking future revenue from Project Atlas.”
Davies noted that with first gas from Project Atlas planned in late 2019, Senex expected to write additional gas contracts with a range of buyers in the coming months.
Project Atlas is expected to reach a plateau production of 32 TJ/d, or about two-million barrels a year of oil equivalent, with an additional 8 TJ/d of installed redundant capacity available.
The Australian Petroleum Production and Exploration Association (Appea) noted that the new sales contract with O-I Australia highlighted the measures the Queensland gas industry is taking to ensure the gas needs of the state’s manufacturing sector are met.
Appea CEO Andrew McConville said the new contract highlights the critical importance of developing new gas resources and the response the oil and gas industry is taking to accelerate the delivery of new supply.
“Queensland has taken a proactive approach to gas development which has delivered significant new supply to its homes and businesses, as well to many manufacturers in southern states, whose governments have put a brake on gas production.
“Natural gas is an essential feedstock for many Australian manufacturers. Over 200 000 people work in manufacturing jobs that rely heavily on gas.”