Central Petroleum signs Australian NT gas supply deal

Australian independent Central Petroleum has announced a gas supply agreement with Northern Territory (NT) government-owned utility Power and Water Corporation (PWC) to the end of 2024.

The Mereenie gas project will supply 8.6PJ (230mn m³) to PWC, which is struggling for supplies from Italian energy firm Eni's Blacktip field offshore the NT that supplies the NT's gas-fired power generation and to private-sector customers, Central said on 12 April.

The lack of oversupply in the NT, Australia's smallest jurisdiction by population, means insufficient flows exist to operate the Jemena-operated 90 TJ/d (2.4mn m³/d) Northern gas pipeline linking the NT and Queensland state.

Mereenie has effectively curtailed production by 10-15 TJ/d, Central said, but it expects tail gas from Australian independent Santos' offshore Bayu-Undan field to fall in the coming months, enabling Mereenie to increase supplies.

Bayu-Undan exported its final cargo through the 3.7mn t/yr Darwin LNG (DLNG) late last year, ahead of preparatory works for backfill through Santos' delayed Barossa project that is currently 70pc complete. DLNG was supplying about 25-35 TJ/d to domestic customers in the NT last month from the depleting Bayu-Undan.

A unit of Australia's Macquarie Bank owns 50pc of Mereenie in the NT's onshore Amadeus basin, with operator Central holding 25pc, while 17.5pc is controlled by upstream firm New Zealand Oil and Gas and the remaining 7.5pc by domestic independent Cue Energy.

Blacktip started production in 2009 and has an agreement with PWC for an initial 23 PJ/yr, increasing to 37 PJ/yr or nearly 750PJ across its production life of 25 years, which means it should produce up until 2034.

By Tom Major