This morning AGL announced Orient is leading a consortium buying 50% of the Moranbah Gas Project Joint Venture in the Bowen Basin - one of Australia's oldest producing gas fields - along with associated contracts and AGL's participation rights in the nearby ATP 1103 exploration licence.

 

The Moranbah JV produces gas while the North Queensland Energy Joint Venture comprises transportation rights on the North Queensland gas pipeline, a power purchase agreement to toll gas through the Yabulu power station and gas purchase and sale agreements.

 

Shell and Petrochina's Arrow Energy is the operator of the assets, and has pre-emptive rights.

 

Arrow describes Moranbah as one of the largest gas fields in Australia.

 

It supplies gas to the Moranbah Power Station, as well as mineral refining facilities in north Queensland. Arrow is committed to maintaining supply to these domestic customers.

 

It leaves AGL's gas business with the Camden CSG field in New South Wales, which is set to shut down early next decade, and the Newcastle and Silver Springs gas storage facilities.

 

AGL elected to get out of the upstream gas business in February 2016.

 

It produced 11 petajoules last fiscal year, at an average price of $4 per gigajoule. 

 

AGL did not disclose the terms of the sale of its north Queensland assets, but said it did not anticipate any further impairments as a result of the sale beyond those write downs it put on the balance sheet in 2016.

 

The sale to Shandong and Orient remains subject to receiving Australian and Chinese regulatory approvals.

 

Shandong is a Chinese gas distribution company that supplies gas to seven million residents and 20,000 industrial customers via some 3000km of gas pipelines.

 

Orient was described an Australian energy investment company with extensive experience in the exploration and production of gas in the Bowen Basin.

 

New South Wales-based Orient was registered in 2014.