Origin and its LNG consortium partners at APLNG have struck a deal with pipeline company APA to supply 91 petajoules of gas to the southern states over four years starting next year.
The Australian Energy Market Operator has previously warned of the potential crisis from 2023 when the southern states would face a severe shortage brought about by moratoriums on gas developments.
To give some perspective of the volume of gas under the deal, one petajoule is enough to supply 19,000 homes for a year.
APA said the revenue it would receive under the deal was $190 million. It would also expand its east coast grid at a cost of $270 million.
The first stage will be the expansion of the Wallumbilla to Wilton.
APA chief executive Rob Wheals said the decision to expand reflected the changing dynamics and the key role of Queensland gas production.
Origin said that it had secured the gas and pipeline access for the switch which had become possible because of more efficient and productive gas fields and because the delivery would be timed for the winter months when exports from APLNG were in lower demand. No extra field developments would be needed.
Origin’s executive general manager of energy supply and operations Greg Jarvis said the gas supply and transport agreement strengthened the company’s portfolio and provided the flexibility to move the gas to where it was needed.
“Affordable gas is vital to Australian industry and manufacturing and we’re proud to bring this additional supply to the market to help meet customer demand.”
APLNG said the deal was on top of its current domestic supply agreements of 495 petajoules.
APLNG chief executive Nicholas McKenna said the demonstrated how gas companies could “step up” to ensure domestic demand was met.
“We understand the critical role for gas as an enabler of Australia’s economy and the Federal Government’s plans for it to support our COVID-19 recovery,” McKenna said.
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