Under the GSA, Central as operator has the right to supply gas from Mereenie, Dingo or Palm Valley, and is structured as a delivered $AUD fixed price gas supply contract (subject to escalation based on CPI).
The start date for gas supply will be no later than 1 June 2017, unless mutually agreed otherwise.
The agreement (including the obligation to supply gas) remains subject to satisfaction of certain conditions precedent, including execution of already negotiated gas transportation arrangements, by 31 May 2017.
The GSA was signed by Central Petroleum Mereenie Pty Ltd (a wholly owned subsidiary of Central) as trustee of the Central Petroleum Mereenie Unit Trust and EDL.
Negotiations have been underway for some time and became a priority after the National Market Reform Group decided to exclude the Amadeus and Carpentaria Pipelines from the COAG endorsed Vertigan reforms.
The expectation of a GSA was taken into account by the Board in unanimously recommending the improved proposal received from Macquarie MPVD Pty Ltd announced to the ASX on 10 March 2017.