The operator of the Mereenie project Central Petroleum announced the one-year gas supply agreement. 

Under the contract Shell will take a total of 3.65 PJ from January 1, 2025. 

Shell has been supplying around 10% of the east coast domestic market from its Queensland operations since 2017.

"This new gas supply agreement allows Central to broaden its customer base across the Northern Territory and eastern Australia," Central chief executive Leon Devaney said. 

"We are very excited to have Shell Energy as a customer and hope this will be the start of a long relationship."

The Mereenie project is a joint venture with Central holding a 25% interest, Macquarie Group a 50% stake, New Zealand Oil & Gas a 17.5% interest and junior Cue Energy the remaining 7.5%. 

The fields were only connected to the east coast in 2017, when the Northern Gas Pipeline became operational. 

Gas is piped 622 kilometres from Tennant Creek in the NT to Mount Isa in Queensland and is then distributed across Victoria and New South Wales.

Central and Shell will need to execute a transportation agreement with the owner of the pipeline, Jemena. 

Central said the agreement was for firm gas supply, with take-or-pay provisions and fixed price. It did not reveal the value of the contract but noted that it covered existing uncontracted production. 

"This agreement demonstrates how the industry is working together on bringing more supply to customers in the domestic east coast market and we are proud to be connecting gas from the NT to our east coast retail customers for the first time," Shell Australia trading vice president David Guiver said. 

Production from Mereenie peaked in 2019 at 16 PJ. June figures show the field produced at around 30.5 terajoules per day. 

Central is currently drilling wells on the flank of the Mereenie field to intersect reservoirs within the Pacoota sand. 

It drilled two production wells in mid-2021. Another two production wells will be drilled next year along with a six-well recompletion campaign to boost production. 

Separately, the venture is looking to develop the Stairway Formation which has a contingent resource of 100 PJ. 

Source: Energy News Bulletin

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