PERTH (miningweekly.com) – ASX-listed Origin Energy has struck a supply agreement with the Australia Pacific Liquefied Natural Gas (APLNG) project to purchase 61 PJ of gas over a two year period, to support the east coast gas market.
Under the terms of the agreements, gas supply to Origin will start in January 2020 and continue through to the end of 2021. Pricing will be primarily oil-linked and supply will be shaped to meet seasonal domestic demand.
“This is a substantial amount of gas which will be available to customers during the high demand winter months,” Origin executive GM for energy supply and operations, Greg Jarvis said.
“We continue to be focused on making sure domestic users can access reasonably priced gas and this agreement with APLNG means that we are able to continue to support our commercial and domestic customers during this period.
“As one of the major gas suppliers to Australian households, large gas users and peaking power plants, we continue to look for additional ways to deliver more gas to the domestic market and help bring down gas prices for our customers,” Jarvis said.
The Queensland Resources Council (QRC) has welcomed the transaction, with CEO Ian Macfarlane saying the gas was the equivalent yearly demand of around 1.5-million households.
“I applaud APLNG for helping to put downward pressure on energy prices by increasing supply into the domestic market through this new agreement with Origin Energy. It’s another sign of the Queensland gas industry leading the nation with a proactive approach to developing its gas reserves,” Macfarlane said.
“Our southern neighbours must take a leaf out of our book, instead of relying on our state to meet the gap caused by their failure to develop their own gas industries. Gas exploration has stalled in New South Wales and Victoria, despite the fact all jurisdictions have their own reserves in the ground.
“Queensland’s gas industry is doing its part to ensure domestic gas users have access to affordable and reliable gas supplies,” Macfarlane said.
APLNG said the new contract increases the company’s total domestic contracted supply commitment to over 340 PJ for 2020 and 2021, which is over 30% of total east coast domestic demand for each year.
Origin holds a 37.5% interest in the APLNG project.