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- Oil and gas company Senex Energy (SXY) has struck a potential 7.5-year deal to supply gas to local oil refinery Southern Oil Refining in Queensland
- Under the deal, Senez will supply 0.3 petajoules (PJ) of gas to South Oil’s Northern Oil Refinery for the first 2.5 years
- From here, the contract can be extended for an extra five years with gas supply bumped up to 0.35 PJ per year
- Senex says the deal will support 32 jobs directly and hundred indirectly across Queensland
- Gas will come from Senex’s Project Atlas, which is Australia’s first natural gas acreage dedicated to supplying domestic customers
- Senex shares are grey in early trade, worth 33 cents per share
Oil and gas company Senex Energy (SXY) has struck a potential 7.5-year deal to supply gas to local oil refinery Southern Oil Refining in Queensland.
The gas will be supplied from Senex’s Project Atlas, which is Australia’s first natural gas acreage dedicated to supplying domestic customers.
Under the deal, Senex will supply 0.3 petajoules (PJ) of gas to Southern Oil’s Northern Oil Refinery near Gladstone for 2.5 years. However, the contract can be extended for an extra five years and bumped up to 0.35 PJ per year, taking the total gas quantity to be supplied to a potential 2.5 PJ.
According to Senex, the contract will support 32 jobs directly and hundreds of jobs indirectly across Queensland.
As far as the revenue from the contract is concerned, Senex said gas is being supplied at the Wallumbilla Gas Hub in Queensland at a fixed price in line with current market levels, indexed annually.
Senex Managing Director and CEO Ian Davies said the company is pleased to be providing natural gas to the Gladstone oil recycling plant.
“This gas sales agreement adds to our existing portfolio of domestic customers with a Queensland presence including CSR, Orora, Visy Glass and CleanCo Queensland, reinforcing Senex’s importance as a supplier of natural gas to the east coast market,” Ian said.
“Senex is committed to investing for the long-term to unlock both development-ready and exploration opportunities and working with our customers to deliver affordable and sustainable gas supply to the domestic market,” he said.
Today’s news comes just one day after Senex was awarded new Atlas gas acreage by the Queensland Government. The new acreage will help the company bump up Atlas gas production by 50 per cent to roughly 18 PJ per year.
Senex shares are grey in early trade, worth 33 cents per share at 10:41 am AEST. The company has a $481.7 million market cap.
