PERTH (miningweekly.com) – Project Atlas has delivered its first gas sales into the east coast market ahead of schedule, with the gas sold to Queensland power generator CleanCo.
ASX-listed Senex Energy on Tuesday said that the agreement with CleanCo complemented Project Atlas’ gas sales agreement with CSR and Orora, which will each start on January 1.
Senex is supplying gas at the Wallumbilla gas hub, in Queensland, via a 60-km Project Atlas pipeline, and the gas is sold on a fixed-price basis in line with current market levels.
Senex MD and CEO Ian Davies told shareholders that the company had delivered gas from Australia’s first acreage dedicated to domestic supply, in what is believed to be record time for a greenfield project.
“With the support of the Queensland government, Senex has successfully delivered this development within 18 months of grant of the petroleum lease. We have achieved this on budget and ahead of schedule, allowing early gas sales to be made to one of our foundation customers.”
The petroleum lease for the Atlas acreage was granted to Senex in March 2018 part of a Queensland government policy to increase the supply of natural gas to the domestic market. Senex announced first gas production from the Project Atlas field in October 2019, some 18 months later.
“With the processing facility delivering gas, we are focused on completing the initial 60-well drilling campaign by mid 2020 and ramping up production to an initial plateau of 12 PJ/y by the end of 2021,” Davies said.
Queensland Natural Resources, Mines and Energy Minister Dr Anthony Lynham has welcomed the first gas from Project Atlas, saying the milestone was underpinning manufacturing jobs and businesses and the state’s reliable, lower-cost electricity supply.
“This is a gold medal result from the government’s ground-breaking move to release land two years ago exclusively for gas for the domestic market,” Lynham said.
“Atlas and its connecting pipeline have created hundreds of construction jobs in regional Queensland and will now support hundreds of manufacturing jobs in Queensland.”
The Australian Petroleum Production and Exploration Association (Appea) has also welcomed first gas sales, with CEO Andrew McConville saying it was an excellent example of the oil and gas industry providing natural gas supply to domestic customers, including manufacturers to support local jobs and economic growth.
“These gas supply agreements provide much-needed certainty for manufacturers and highlight further evidence of the large investment industry is making to increase the substantial flow of gas to the east coast market,” McConville said.
“Queensland and the state government should be congratulated for continuing to see the economic benefits that flow to communities from developing and using natural gas. Increasing supply should be the focus of government, industry and all Australian businesses that rely on sustainable gas supply.
“More natural gas supply into the domestic market makes a significant difference to the millions of homes and thousands of businesses that use gas – underpinning hundreds of thousands of jobs in Australian manufacturing and other key sectors.”
The Queensland Resources Council’s CEO Ian Macfarlane has also echoed Appea’s comments, saying Project Atlas vindicated Queensland’s proactive approach to developing gas. However, he noted that with New South Wales and Victoria’s ongoing failure to develop their own gas resources, Queensland continues to do all the heavy lifting to provide extra gas for the eastern Australian market.