The Queensland Government granted APLNG and Armour a petroleum lease for a block near Chinchilla, in southwest Queensland, that has the potential to deliver 103 petajoules over 30 years.

It will be the first block in Australia to deliver gas exclusively for use in Australian manufacturing sector.

APLNG has already signed supply contracts with Orica, Incitec Pivot and Orora to take gas from the field, to be known as Murrungama.

The project will also help support about 650 jobs existing at those manufacterers.

APLNG, a joint venture between Origin, ConocoPhillips and Sinopec, owns one of the three LNG export projects on Curtis Island, near Gladstone.

APLNG  chief executive Warwick King said the development would start within a year and first production was expected in 2021.

Mines and Natural Resources Minister Anthony Lynham said the granting of the lease came less than eight months after exploration rights were granted.

“Here’s Queensland once again doing the heavy lifting on gas policy and supply,” Lynham said.

“This will help boost east coast gas supplies and help secure 650 jobs across manufacturers Orica, Orora and Incitec Pivot’s plants in Queensland.”

Senex also announced a “step-change” in its outlook with a major production increase and development savings.

The Brisbane-based Senex said it had completed its Roma North drilling campaign, with only 35 wells of the originally planned 50 wells required to reach initial plateau production.

It is also establishing a free cashflow breakeven Brent oil price of less than US$30 a barrel with production forecast to triple from last year’s level to 3.6 million barrels-of-oil-equivalent by 2022 without growing capital expenditure.

Free cash flow will be between $70 and $90 million from 2022 and earnings will be between $100 million and $110 million a year.

Its Roma North project has reached the plant’s initial capacity milestone of 16 terajoules a day (about 6 petajoules a year) more than 12 months ahead of schedule.

At the Atlas field, near Wandoan, Senex said the number of wells required had fallen by 10 to 50.

It will now build its own water treatment plant at the site at a cost of $15 million, which it said would significantly reduce costs.

Managing director Ian Davies said that given the outperformance at Roma North Senex had started front end engineering and design on an expansion of the gas processing facility to 24 terajoules a day.

He said the expansion project would be low-risk with fast cash returns given the modular processing facility design as well as more than 20 years of reserves coverage and ready land access and other approvals.

“The high-quality, low-cost nature of our Surat and Cooper basin assets, together with our best-in-class execution capability has enabled Senex to deliver a transformation in our business,’’ Davies said,

Senex shares opened 7 per cent stronger this morning at 22c.