Australian gas producer Senex Energy, owned by South Korean steel giant Posco, has entered into an agreement to supply 42PJ of gas to AGL Energy from Senex’s proposed Atlas expansion in Queensland’s Surat Basin.
Senex CEO Ian Davies said Australian energy customers would benefit from the additional supply to the domestic market represented by this agreement, and from the more than $1 billion investment in Queensland’s Western Downs region.
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“During this cost-of-living crunch, one certain way to put downward pressure on prices for energy customers is to deliver new gas supply to market—and our domestically-focused Atlas expansion can do just that,” Davies said.
“More secure and reliable gas supply will help to keep the lights on for Australian households and keep small manufacturers in business.
“The ACCC and Australian Energy Market Operator (AEMO) have forecast structural gas shortfalls in the east coast market without new supply in the coming years and have warned of the urgent investment needed to ensure enough supply.
“This agreement will add critical new supply to the domestic market when it’s needed most.
“It also comes at a time when the urgency—and challenge—to meet Australia’s emissions reduction and renewables targets is building every day.
“Gas plays an essential “firming” role for renewable generation by providing fast and reliable electricity to support intermittent, or “non-firm”, solar and wind generation.
“Gas is the critical safety net, maintaining the stability of the electricity grid and supporting Australia’s manufacturers as the road to net zero becomes increasing complex,” Davies said.
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The new gas deal between Senex and AGL and the commencement of gas supply in 2025 is conditional only on the timely recommencement of Senex’s Atlas expansion which was put on hold in December 2022 following Government intervention in the gas market.
Project recommencement requires the satisfactory resolution of regulatory arrangements and the receipt of certain Commonwealth approvals.
