Origin, Engie agree to up gas supply to South Australia and Victoria

Australia’s Origin Energy, a company holding a 37.5 percent stake in the Australia Pacific LNG project, signed agreements with Engie, to deliver more natural gas to South Australia and Victoria. 

Under the first agreement, Origin Energy will supply natural gas to the Pelican Point power station’s second generation unit.

This will provide Origin with access to 240MW of electricity production, which will be used by Origin to supply customers in South Australia.

The contract is set to run from July 1, 2017, to June 30, 2020, Origin informed in its statement on Wednesday.

In addition to the Pelican Point deal, Origin has agreed to sell 8 PJs of natural gas to Engie in Australia in 2018 and 2019 to meet the customer demand.

Speaking of the two agreements, Origin CEO, Frank Calabria said they are set to address South Australia’s energy security challenges.

He called for cooperation between the industry and the government to make decisions that will provide energy security for Australia, that is, according to APPEA, facing gas shortages by 2019.

Despite the availability of resources, the country’s gas exploration has been at its lowest level since 2005.

The state of Victoria’s government made the decision to ban any conventional and unconventional onshore exploration while the South Australian government recently granted support to exploration companies to enable more natural gas to be supplied to the market.

Calabria added that to enable energy security it is essential to understand that the Australian “energy market is in transition as are energy markets around the world,” calling for more certainty to investment.

In the push to mitigate the effects of possible gas shortages, Australia’s prime minister Malcolm Turnbull has also recently secured commitments from two of the three Curtis Island LNG projects to contribute to the domestic gas market.

LNG World News Staff