PERTH (miningweekly.com) – Gas producer Senex Energy has inked a gas sales agreement with packaging and paper manufacturer Opal.

Under the initial four-year agreement starting January 1, 2023, Senex will provide around 8 PJ of natural gas to support the Opal Paper & Recycling division’s manufacturing operations at Botany, New South Wales, at a fixed price, in line with current market levels.

Opal and Senex have also agreed terms for a contract extension of up to two years and up to a further 4 PJ of sales, providing Opal with some flexibility in the medium term as it continues to explore long-term energy solutions.

“The agreement broadens Senex’s reach in supplying natural gas throughout the east coast, with our Surat basin gas to support industry in New South Wales for the first time,” Senex MD and CEO Ian Davies said.

“Senex looks forward to building another strong, long-term and mutually beneficial relationship that supports jobs, the economy and helps meet Australia’s energy demand as it transitions to a lower carbon future.”

The Australian Petroleum Production and Exploration Association (Appea) said on Thursday that the new gas agreement between Senex and Opal  is further proof the market is working.

“Gas means jobs. Natural gas helps to make so many of the things we use in our everyday lives. This signifies the 107th deal since December 2012 to supply gas to domestic customers, from building supplies to fertilizer to the packaging and paper produced at Opal,” Appea CEO Andrew McConville said.

“The market is clearly working with competitively priced gas continuing to deliver for Australian manufacturers. Domestic users are paying less for Australian gas over the long term than overseas markets and have been doing so for some time.

“However, 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. This is the first time Senex’s Surat basin gas will be transported to support industry in New South Wales,” McConville said.

“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.”

Since 2019, Senex has signed approximately 70 PJ of natural gas sales agreements with a range of household names including CSR Building Products, Orora, Visy Glass, CleanCo Queensland, Alinta Energy, Adbri, Nyrstar, Southern Oil Refining, and now Opal.