Australia: Orica Signs Three-Year Gas Sales Agreement with ESSO, BHP Billiton

Orica has entered a three-year Gas Sales Agreement with Esso Australia Resources and BHP Billiton Petroleum to purchase up to 42 petajoules of natural gas (14 PJ per annum over three years) from Longford in Victoria beginning in 2017.

The ESSO/BHPB joint venture will supply gas for the first time to Orica. These arrangements will meet Orica’s total gas requirement for its Kooragang Island (KI) manufacturing facility in New South Wales.

This agreement forms part of Orica’s forward-looking Australian east-coast gas supply strategy. The natural gas supply will come from the Gippsland basin via the Longford processing plant and be delivered downstream to New South Wales. The GSA, which incorporates an oil linked component, provides competitive pricing. The agreement recognises the arrangements could be extended past the end of 2019.

Orica Managing Director and CEO Ian Smith said: “This important agreement with ESSO/BHP Billtion gives Orica security of gas supply to the end of the decade for our Kooragang Island manufacturing facility from a highly reliable supplier.”

Discussions are also currently underway with a number of parties regarding the supply of 3.5PJ per annum to Orica’s Yarwun facility in Queensland. As announced in July 2013, additional optionality will also be provided by executing the binding term sheet with Strike Energy Limited to evaluate and commercialise a large prospective gas resource from the Southern Cooper Basin gas project in South Australia.

[mappress]
LNG World News Staff, November 11, 2013; Image: Orica