Origin Energy Limited has signed a second major agreement to sell gas to GLNG partners (GLNG), providing a pathway for Origin to monetise its gas portfolio in line with international oil-linked pricing.
Under the terms of the agreement, Origin will supply GLNG with at least 100 petajoules (PJ) of gas at Wallumbilla over a period of five years, commencing on 1 January 2016.
The agreement provides Origin an option to supply additional volumes of up to 94 PJ of gas to GLNG, and preserves flexibility to call back certain volumes of gas into Origin’s portfolio during periods of high east coast gas or electricity market demand.
Origin Chief Executive Officer Energy Markets, Mr Frank Calabria said, “The signing of Origin’s second major agreement to sell gas to GLNG demonstrates the strength and value of the Company’s east coast gas portfolio, including extensive transport capabilities.
“The agreement stands to deliver significant value, by allowing Origin to monetise its gas resources in line with international oil-linked pricing.
“In addition, Origin continues to invest in a range of organic opportunities to grow its gas production portfolio, including the Halladale Black Watch conventional gas project in Victoria and the Ironbark CSG project in Queensland,” Mr Calabria said.
Vice President Downstream GLNG Rod Duke said GLNG had secured a diverse gas supply portfolio, comprising supply from GLNG’s own coal seam gas fields, Santos portfolio gas, underground storage and third party supply.
“When combined with GLNG’s quality LNG off-take contracts with project partners PETRONAS and KOGAS, this supply portfolio delivers significant value to the project.”
“The GLNG project is progressing well – we are now more than 72% complete and remain on track for first LNG in 2015,” Mr Duke said.
The agreement is between Origin subsidiaries, Origin Energy Retail Ltd, Origin Energy Power Ltd and Origin Energy Electricity Ltd, and Santos GLNG Pty Ltd, PAPL (Downstream) Pty Ltd, Total GLNG Australia and KGLNG Liquefaction Pty Ltd.