Central Petroleum signs gas deal with Aussie mining firm
Central Petroleum has signed a gas sales agreement with mining company South32 for 0.55 petajoules of gas supply over two years, starting January 1, 2023, it said on December 15.
The deal is for a firm gas supply to Mt Isa in Queensland, with take-or-pay provisions and a price that escalates with the consumer price index. The agreement commercialises a portion of existing uncontracted production, Central said.
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Central's gas will be aggregated with the existing Mereenie gas supply owned by a joint venture of Macquarie Mereenie, NZOG and Cue, to supply a total of 2.19 petajoules to South32.
Central said it expects to bring further gas to market from 2023 now that it has completed the current Palm Valley 12 well and following planned development activity at Mereenie.
"This new gas supply agreement allows Central to further broaden its customer base in eastern Australia and we are particularly excited about supplying gas into Mt Isa given its proximity to our operations,” Central CEO Leon Devaney said. “We are working hard with our joint venture partners to bring more gas to market and playing our part in helping meet the transitional energy challenge and we look forward to commencing supply to South32."
The company recently signed a gas supply deal with Shell. Similar to the South32 deal, Central's gas will be aggregated with gas from the Mereenie joint venture.