PERTH (miningweekly.com) – ASX-listed Senex Energy has inked the first domestic gas sales supply contract at its Project Atlas development, in Queensland.

Senex on Wednesday announced that it had agreed to a domestic gas sales agreement for up to 3.25 PJ of natural gas with fellow-listed CSR, which would use the gas in its three manufacturing plants servicing the construction industry.

Under the initial three-year agreement, Senex would supply CSR with 0.65 PJ/y of gas, starting in January 2020. CSR could extend the agreement by up to a further two years, taking the total contract quantity to 3.25 PJ.

Senex told shareholders that the gas would be supplied at the Wallumbilla gas hub, in Queensland, at a fixed price in line with current market levels, and indexed annually.

“We are delighted to secure CSR as a customer and support this key Queensland manufacturer of essential building products. Senex’s initial gas marketing focus is to partner directly with domestic commercial and industrial customers for long-term, enduring and mutually beneficial relationships,” said Senex MD and CEO Ian Davies.

Queensland Mines and Energy Minister Dr Anthony Lynham has welcomed the first domestic gas agreement from Project Atlas.

“This is the outcome the government was seeking when it made this land available for development of domestic-only gas in 2017,” Lynham said.  

“Manufacturers need gas as a feedstock and an energy source and Australia has a shortage of gas in the east coast market. This contract is the culmination of the heavy lifting Queensland has been doing on gas policy and production for some time.

“Soon we will have Queensland petroleum resources directly fuelling more Queensland business and jobs,” the Minister added.

The Queensland Resources Council (QRC) has also welcomed the domestic gas contract, with CEO Ian Macfarlane pointing out that the agreement was an Australian first and showcased Queensland’s leading regulatory framework designed to increase supply in the domestic market. 

“Senex Energy developed gas at Project Atlas after the Queensland government released the land specifically for the domestic market. QRC has always been a strong supporter of this domestic gas policy and it’s another example of how Queensland continues to do all the heavy lifting to provide extra gas for the eastern Australian market,” Macfarlane said.

Project Atlas is expected to reach a plateau production of 32 TJ/d, or about two-million barrels a year of oil equivalent, with an additional 8 TJ/d of installed redundant capacity available.

The Senex board last year approved a capital spend of between A$220-million and A$250-million to develop the Project Atlas and the Roma North natural gas projects.