First delivery from the Berwyndale South CBM field is due in September 2006. QGC also has the option to supply a further 3.7PJ per annum.
This latest agreement now brings QGC’s total gas sales contracts to a minimum of 15.4 PJ pa. The exercise of options could boost this figure a further 7 PJ of gas a year, bringing aggregate long-term gas sales to 22.4 PJ per year, the company said.
Included in this estimate is a long-term contract to supply 4 PJ pa of gas from the Berwyndale South Gasfield to CS Energy, with first delivery planned for April next year.
Due to start in September 2007, the company also has a decade-long 7.4 PJ gas sales contract with Incitec Pivot, which will be supplied from the Argyle Gasfield.
But these sales do not take into account future gas sales to the Chinchilla or Gibson Island power stations presently under feasibility study, according to QGC.
Managing director Richard Cottee said the company had established ample reserves of CBM to service the CS Energy and Braemer contracts from the Berwyndale South development in ATP 632P.
“Already QGC has established 178 PJ of 1P (proved) reserves and 470 PJ of 2P (proved and probable) reserves from its gas fields and additional drilling on the ‘Undulla Nose’ is presently underway,” Cottee said.
He added that the gas would be supplied via the Braemer Pipeline from the lateral pipeline QGC is building to connect Berwyndale South to the Roma-to-Brisbane Gas Pipeline.
“The compressor and related equipment and, overall the pipeline capacity at Berwyndale South, have all been deliberately built over-size to meet the projected additional demand for gas,” Cottee said.
“The incremental development work required for the Braemer contract will be a logical follow-on from the major Berwyndale South development related to the CS Energy contract. This in turn will pass smoothly into the Argyle development to service the Incitec Pivot contract some 12 months later.”
The company does not need to raise additional equity funding to service the Braemer contract, according to Cottee. It expects its current project financing structure to accommodate the additional capital required for the doubled production from Berwyndale South.
On August 17, another Queensland CBM producer, Arrow Energy, announced it had entered into a binding agreement with Braemer to supply a base contract gas supply quantity of six petajoules of gas for 15 years. The company also had the option to supply, on a non-firm basis, additional, interruptible gas of up to 7.3PJpa for up to 15 years.
