Central Petroleum has announced non-firm gas from the Mereenie field will be sold into east coast trading markets.
Until now, the lack of flexible transportation options have limited Mereenie gas field sales to the Northern Territory. However, Central has made transportation and market trading arrangements with Strategic Gas Market Trading on behalf of the Mereenie Joint Venture.
These arrangements will allow for cost-efficient delivery of up to 7 TJ/d (gross JV) of gas into eastern Australia on a day-to-day basis for a two year term. Gas from the Mereenie field will now be sold into high-priced trading hubs, including Brisbane, Melbourne and Sydney Short Term Trading Markets (STTMs).
Central completed its first east coast spot sale last week, achieving an ex-field price of over $13/GJ. This is approximately double the average price Central received for non-firm gas in the March quarter.
Managing director Leon Devaney said the company is very pleased with this outcome.
“This is a very exciting development for the Mereenie joint venture. Commencement of the Northern Gas Pipeline in 2019 was a milestone for the company as it unlocked the opportunity for firm gas sales into the broader east coast market,” he said.
“We haven’t had the same ability to sell non-firm gas into the east coast spot market, which as we have seen over the past few months can be very attractive. Today’s announcement is another milestone for gas marketing from Mereenie, with non-firm production now able to go to those east coast markets with the greatest need.”
An average of 1 TJ/d of spot sales over the next 12 months could generate up to $2 million in additional profit, and this increased cashflow could allow the company to invest in other exploration and development activities.