AGL Energy to Divest Hunter Coal Seam Gas Project Assets

AGL Energy Limited on Monday announced decision to focus only on core gas projects and divest non-core and under-performing gas assets and activities.

The company said it has a strong gas supply position through a combination of contracted gas at competitive prices and owned production at Camden adding that this covers AGL’s expected household demand until 2027 and contracted commercial and industrial demand until 2021, and can be augmented by ongoing portfolio management tailored to customers’ requirements.

AGL feels this position enables the company to focus on a small number of gas projects including strategically important gas storage while avoiding significant capital expenditure, releasing poorly performing assets and allowing management to concentrate on enhancing shareholder value across the group.

The company had decided to divest the Hunter coal seam gas project assets (PEL 4 and PEL 267) and associated agriculture activities.

“While there is significant coal seam gas in the Hunter Valley, the overlay of Critical Industry Clusters and the two kilometre setback result in this resource not being economic to develop,” AGL said in a statement.

Core projects to be retained include the Camden gas project, Gloucester gas project, Silver Springs underground storage facility, Wallumbilla LPG plant and the recently opened Newcastle Gas Storage Facility (NGSF).

“These assets enhance AGL’s flexibility in managing its gas portfolio. Effective immediately these assets will be transferred to AGL’s recently formed Group Operations function to deliver greater operational efficiency, productivity improvements and to leverage expertise from across AGL,” the company said.