Origin announces major gas sales agreement with GLNG

abarrelfullabarrelfull wrote on 02 May 2012 05:37
Tags: australia kogas lng origin petronas santos total

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Origin Energy Limited (Origin) has announced the signing of a binding Heads of Agreement for gas supply with GLNG partners (GLNG), providing Origin with a pathway to monetise its portfolio of fuel resources in line with international oil-linked pricing.

Under the terms of the agreement, Origin will supply GLNG with 365 petajoules (PJ) of gas or 100 terajoules (TJ) per day over 10 years at Wallumbilla, commencing in 2015. The gas will be sourced from Origin’s east coast portfolio.

Origin Managing Director, Grant King said, “The gas sales agreement with GLNG will deliver significant value to Origin, opening an export channel to market for our legacy fuel reserves and allowing a more rapid monetisation of the resource in line with international oil-linked pricing.

"The transaction demonstrates the strength and value inherent in Origin's diverse and flexible portfolio of physical and contracted fuel resources, which has positioned the company to capitalise on the growing demand for gas in the energy markets of Asia," Mr King said.

The transaction with GLNG conserves Origin's fuel flexibility with the option to call back 1.825 PJ of gas per annum into its portfolio during periods of high east coast gas or electricity market demand.

Origin has a substantial reserves position with access to more than 2,500 PJe of contract rights and uncontracted 3P equity gas reserves. Origin also possesses gas development options on Australia's east coast including Ironbark (Queensland) and Halladale/Blackwatch (Victoria).

"Gas demand in eastern Australia is expected to triple over the next five years and Origin continues to invest in exploration and development in anticipation of this growth," Mr King said.

GLNG is a joint venture between Santos, PETRONAS, Total and KOGAS, developing a project which will process coal seam gas (CSG) into liquefied natural gas (LNG). The project will produce 7.8 million tonnes per annum of LNG for export to Asia.

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