Origin sells gas to BG Group

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Origin Energy has struck a deal to supply gas to petroleum company BG Group’s Queensland Curtis liquefied natural gas (LNG) project.

The move continues a trend by the partners in the state’s three giant coal seam gas-to-LNG projects to collaborate to control costs that are already above $60 billion.

The conditional gas sales agreement allows for Origin to supply BG-owned QGC with up to 30 petajoules of gas at Wallumbilla in calendar 2014 and 2015 at oil-linked pricing.

However, it has the option to call back volumes of gas during periods of high east coast gas or electricity market demand.

There has been speculation that Queensland’s coal seams are not producing enough gas for Gladstone’s LNG export plants, which is denied by the plants’ proponents.

Origin’s shares were up 7.0 cents at $14.22 in early trade.