Oz Mereenie JV Signs Gas Deal with AGL

Australia’s Central Petroleum December 11 announced that a new three-year gas sales agreement has been signed by the Mereenie joint venture (MJV) with AGL Energy.

“The agreement provides for up to 21.9 petajoules of ‘firm’ and ‘as-available’ gas supply over three years,” Central said. Gas will be supplied under the agreement by Central and its MJV joint venture partner, Macquarie Mereenie from January 1, 2020. The deal is subject to conditions precedent, including the execution of final gas transportation agreements, the company added.

“This is an exciting step in our continuing supply into the east coast from our Northern Territory production facilities. The east coast market remains short on term-gas supply and securing a blue-chip customer such as AGL Energy demonstrates market confidence that our production assets in the Northern Territory provide a reliable source of gas supply for domestic customers,” Central CEO Leon Devaney said.

Meanwhile, to support the AGL Energy deal and the ongoing investment necessary to optimise Mereenie field production, the MJV participants have agreed to a package of commercial arrangements for natural gas delivered from the jointly-owned Mereenie field in Northern Territory.

With the commercial arrangements in place, gas supplied under the AGL Energy agreement will be re-allocated between Central and Macquarie Mereenie with the goal of equalising monthly sales volumes from the Mereenie field, Central said. Under this balancing mechanism, Central is expected to be re-allocated the majority of gas supplied under the AGL Energy agreement during the first two contract years.

Also, a portion of Central’s current overlift imbalance is to be gradually returned over a period consistent with the term of the AGL Energy gas sales agreement.