Origin Energy has agreed to deliver gas to the Santos-led joint venture for the planned Gladstone Liquified Natural Gas (GLNG) plant in Queensland, Australia.
As part of the 10-year deal, Origin will supply Gladstone LNG with 365 petajoules (PJ) of gas or 100 terajoules (TJ) per day at Wallumbilla, beginning in 2015.
The deal will be met through gas from Origin's east coast portfolio including Ironbark in Queensland and Halladale/Blackwatch in Victoria.
Origin also has an option to call back 1.825 PJ of gas a year in times of high east coast gas or electricity demand.
The company has proven reserves and rights to access to more than 2,500 PJe (petajoules equivalent) of contracts with uncontracted 3P gas available.
Origin managing director Grant King said, "The gas sales agreement with GLNG will deliver significant value to Origin, opening an export channel to market for our legacy fuel reserves, and allowing a more rapid monetisation of the resource in line with international oil-linked pricing.
"The transaction demonstrates the strength and value inherent in Origin's diverse and flexible portfolio of physical and contracted fuel resources, which has positioned the company to capitalise on the growing demand for gas in the energy markets of Asia."
Australia's domestic gas producer Petronas and France's Total hold a 27.5% stake each in the GLNG project, which will process coal seam gas (CSG) into liquefied natural gas (LNG), with initial LNG capacity expected at 7.8 million tonnes per annum to be exported to Asia.
Image: Total holds a 27.5% stake in the Gladstone Liquified Natural Gas (GLNG) plant in Queensland, Australia. Photo:Tangopaso.