Senex to invest A$1bn in Queensland gas projects
Senex will invest more than A$1bn ($710mn) in a major expansion of its Atlas and Roma North natural gas projects in Queensland’s Surat basin, the company said on August 11.
The Australian energy producer said it is ready to increase its natural gas production to 60 petajoules (PJ)/year with work planned to begin in the coming weeks. First gas from this investment is expected to deliver gas supply to the domestic market within two years, it added.
Gas production of 60 PJ/year represents more than 10% of annual east coast domestic gas requirements, around 40% of Queensland’s domestic gas requirements, Senex added.
“The willingness of our new owners Posco International Corporation and Hancock Energy Corporation to commit significant additional new capital allows Senex to bring critical new gas supply to market – essential for manufacturing, industry, homes, hospitals and electricity generation – beyond which was possible prior to their acquisition of Senex earlier this year,” Senex CEO Ian Davies said.
“The recent electricity crisis proved natural gas is critical to providing secure and reliable energy for Australians and is needed to underpin renewables and replace aging coal generation, without which electricity costs will further rise, while infrastructure and technology is developed to support increased renewable generation,” he added.
Senex said it has now signed around 90 PJ of term agreements, including 43 PJ in the past 12 months alone. It will soon conduct a process seeking expressions of interest for the supply of gas from the new investment.
Davies noted the Australian Competition and Consumer Commission (ACCC) July report released last week, underscored the importance of upstream competition and the timeliness of increased supply into the east coast gas market.
“The answer to bringing down prices is a greater diversity of producers in the market and more supply. For that producers must have the confidence to invest,” he said.
Australia’s peak oil and gas body Appea in a statement said that Senex’s investment in Queensland will deliver a significant boost to domestic natural gas supply and improve energy security for the country.
“Recent pressures on the energy system showcase the need for more investment such as this by Senex to ensure the supply and investment required for Australia’s energy security,” Appea acting CEO Damian Dwyer said.