The 9mn t/yr Australia Pacific LNG (APLNG) at Gladstone in Queensland state is extending a gas supply contract with domestic explosives manufacturer Orica.
An extra 2.92PJ (78mn m³) of gas will be sold by APLNG, the largest of Gladstone's three LNG plants, to Orica in 2025, extending the current deal by one year. The parties previously agreed a four-year 2.55PJ/yr deal in July 2019 that began in 2021.
Orica is planning to use hydrogen to help decarbonise its operations, with its proposed joint-venture Hunter Valley hydrogen hub to be operated by Australian utility Origin Energy aiming to reach a final investment decision in the first half of 2024, which is potentially a factor in the short extension period for the gas contract.
Origin's present contract with Orica reflects tenures granted to APLNG conditional on domestic supply supporting local manufacturing operations.
APLNG contributed 142PJ of domestic gas in 2023, the firm said on 8 January, with expectations this will rise to 151PJ in 2024 after a deal was struck with the federal government in November.
Upstream operator Origin has said APLNG's 2023-24 fiscal year output is expected to be at the top of its guidance of 680-710PJ because of favourable workover activity at its gas fields.
Origin holds a 27.5pc stake in APLNG, while downstream operator ConocoPhillips controls 47.5pc and China's state-controlled Sinopec, which has a 7.6mn t/yr sales agreement with APLNG, is a 25pc partner.
