PERTH (miningweekly.com) – ASX-listed Beach Energy has signed an agreement to supply fellow-listed Origin Energy with some 139 PJ of gas from the Cooper basin for a term of eight years.
Under the terms of the agreement, Origin had an option to extend the duration of the supply agreement by two years, which would result in the sale of up to 173 PJ of gas.
Beach said in a statement on Wednesday that the gas would be sourced from the South Australian Cooper Basin (SACB) joint venture (JV), in which the company held a 20.21% stake, the Patchawarra East JV, in which it held a 17% stake, and the South West Queensland (SWQ) Unit JV, in which it held 23.2%.
“This is a significant contract for Beach which, based on the proposed SACB and SWQ JV development plans, and the prevailing oil price, has the potential to deliver significant gas revenue over the life of the contract, at attractive prices,” said Beach MD Reg Nelson.
He noted that the Origin contract was also the first separately marketed gas contract that Beach had undertaken out of the SACB and SWQ JVs.
“This validates Beach’s long-term strategy of positioning itself around Cooper basin gas supply. The plan, for some time now, has been to unlock the next phase of the Cooper basin through our existing asset base, and this contract with Origin underpins that,” Nelson said.
Origin CEO Frank Calabria said the gas purchase agreement enabled Origin to bolster its East Coast gas portfolio, given the expected tripling in demand for natural gas.
“Origin’s integrated position, coupled with its existing gas transport capabilities, made this an attractive opportunity to add to the company’s gas portfolio and to secure gas to support our domestic energy market business.”
Calabria noted that, at the same time, Origin would continue to review the timing of the development of medium-term gas-production growth opportunities, including the Ironbark coal seam gas project, in Queensland, and the Halladale Black Watch gas project, in Victoria.