Page 10 - AsianOil Week 49

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Senex expands gas supply deal with Orora
PROJECTS & COMPANIES
AUSTRALIAN independent Senex Energy has expanded its natural gas sales agreement with Queensland-based Orora, agreeing to supply the manufacturer with 13.2 petajoules (343.84mn cubic metres) of gas from Project Atlas.
Senex signed an initial two-year sales agree- ment with Orora for the supply of 3.3 PJ (85.96 mcm) of gas from January 1, 2020.
Senex said on December 11 that under the expanded agreement it would supply an additional 9.9 PJ (25.79 mcm) of gas from the 58-square km Project Atlas over six years from 2022. The gas will be supplied at the Wallum- billa gas hub in Queensland, with Senex not- ing that it would be sold at a market price that would climb in line with the consumer price index (CPI).
Senex managing director and CEO Ian Davies said: “Expansion of the gas sales agree- ment is a further seal of approval for Project Atlas as we continue to de-risk the asset’s future revenue stream.”
He added that the company was continuing to negotiate contracts for the rest of the produc- tion from the block, which is located near Miles and Wandoan.
The news came a day after Senex revealed that the project had delivered its first sales gas ahead of schedule. The company has begun supplying gas to Queensland government-owned power generator CleanCo, with Senex noting that it has the right to sell initial quantities of gas until June 30, 2020. The company said it was selling the gas via Wallumbilla at a fixed-price basis in line with current market levels.
Commenting on the deal, Davies said: “With the support of the Queensland government, Senex has successfully delivered this devel- opment within 18 months of [the granting] of the petroleum lease. We have achieved this on
budget and ahead of schedule, allowing early gas sales to be made to one of our foundation cus- tomers, CleanCo.”
Davies added: “With the processing facility delivering gas, we are focused on completing the initial ~60 well drilling campaign by mid-2020 and ramping up production to an initial plateau of 12 PJ [312.58 mcm] per year by the end of [financial year 2020-2021].”
The production facility has five trains, of which only two are online at present, and a peak produc- tion capacity of 15 PJ (390.73 mcm) per year.
Senex has drilled 23 wells of its initial cam- paign, with 15 wells producing more than 3 ter- ajoules (78,145 cubic metres) per day. Output will be ramped up over the next 12 to 18 months. Project Atlas has 144 PJ (3.75bn cubic metres) of proven and probable reserves, according to Senex’s website.
The block was the first awarded under the state government’s drive to deliver more gas to the domestic market. Senex was granted the petroleum lease for Project Atlas in March 2018 and will sell its output exclusively to domestic buyers.™
Australia commits to gas reserve scheme
POLICY
AUSTRALIAN Federal Resources Minister Matt Canavan said last week that the govern- ment was ready to implement a national gas reservation scheme in order to lower prices on the east coast.
Canavan said on December 5 that the east coast gas market’s largest reported quarterly gas surplus since liquefied natural gas (LNG) exports from Queensland began in January 2015 was the result of the Coalition govern- ment’s policies. These include the introduc- tion of the Australian Domestic Gas Security Mechanism (ADGSM) in July 2017, which gives the government the power to limit
exports from LNG projects that run in deficit to the local market.
Consultancy EnergyQuest said in its Decem- ber report that gas production on the east coast had climbed to 500.1 petajoules (13.03bn cubic metres) in the third quarter. It noted that while LNG exports had increased by 9.1 PJ (237.04mn cubic metres), the market still enjoyed a surplus of 17 PJ (442.83 mcm). This compares with a deficit of 17.9 PJ (466.27 mcm) in the corre- sponding period of 2018.
Acknowledging industry’s mounting frustra- tion over stubbornly high gas prices, the minister said he was “focused on keeping gas prices down
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w w w . N E W S B A S E . c o m Week 49 11•December•2019