Central Petroleum has signed a new ‘firm’ gas supply agreement (GSA) for up to 3.15 pjs of gas to the Northern Territory’s Power and Water Corporation (PWC).
This is via a back-to-back GSA with Macquarie Mereenie (MM) and is a four-year contract.
The back-to-back GSA with MM is in support of a master GSA which has been initially entered between MM and PWC as the end customer.
The company’s gas plans to be combined with existing gas supply owned by MM, which includes NZOG and Cue.
As a result, a total 12.6 pls to PWC will be supplied.
With take-or-pay provisions, the GSA is a fixed price subject to annual CPI escalation.
Following the 2021 Mereenie development campaign, the GSA commercialises a portion of the increased production purchased online.
The 2021 campaign administered two new production wells to be drilled and four existing wells to be recompleted.
Central will be conducting joint marketing authorisation by The Australian Competition and Consumer Commission (ACCC) soon.
The company plans to facilitate larger amounts being supplied from the MM field with the joint marketing.
Under the GSA, ex-field pricing exhibits strong market conditions, thus Central is expecting this will have a positive impact on the company’s average portfolio gas price throughout the next 4 years.
As Central will deliver gas directly into the Amadeus Gas Pipeline from either the Mereenie or Palm Valley delivery points, no gas transportation is required under the GSA.
This follows the announcement in September that New Zealand Oil & Gas (NZOG) has agreed purchased interests in Central Petroleum in three producing Northern Territory assets.
From 2022, Central is continuing marketing additional gas for sale.
Source: Oil & Gas Today