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Shell and Origin Energyâs subsidiaries have inked a pipeline agreement that will increase the gas supply into the east coast market. It is because the new agreement between Originâs Australia Pacific LNG (APLNG) and Shellâs Queensland Curtis LNGÂ (QCLNG) has equipped Arrow Energyâs Queensland gas field, Surat Basin, to push new supplies into the east coast by 2024.
Through using the empty pipeline capacity, QCLNG will transport and process gas and water from Surat Basin gas field in APLNGâs pipeline network. As a result, now there would be no need to build new gas pipelines or invest in the development of processing infrastructure. Â
Australiaâs largest producer of coal seam gas (CSG), Australia Pacific LNG is jointly owned by Origin, ConocoPhillips and Sinopec. The company focuses on processing CSG into liquified natural gas, supplying Queenslandâs domestic gas market and meeting the growing demand of LNG in international markets.
Queensland Curtis LNGÂ is a natural gas venture owned and operated by Shell. It is located in Queensland in Eastern Australia and primarily focuses on the development of world-class onshore gas reserves to ramp up its LNG export.
This pipeline deal between the two leading LNG producers has come after the government has announced tax increase of $6 billion for oil and gas companies targeted as LNG exporters. Earlier the Australian Competition and Consumer Commission(ACCC) has anticipated a shortage in east coast domestic gas of up to 100 petajoules in next year 2019. But the new supplies from Queensland gas field will now reduce this expected shortage significantly.
Chief Executive of Australia Pacific LNG Warwick King stated that the latest arrangement has demonstrated the industryâs commitment to develop more gas in order to meet the domestic market demand.
This has also brought down the government threats of ceasing LNG export as Morrison Government has warned that if the domestic gas shortage around in Australia, gas export by LNG exporters will be stopped.
Moreover, these arrangements remain subject to final investment decision to be taken by Arrow Energy in respect of its Surat Basin gas fields development.
Ahead of joining hands with Shellâs Queensland Curtis LNG, Origin Energy Limited (ASX:ORG) witnessed a positive market sentiment in todayâs trading session. The share price of ORG has gone up by 0.837% to last trade at $7.230 on 6 November 2018. But, over the past one year, ORG has fallen by 13.09%. The PE multiple was 57.820 x with market capitalization of $12.62 billion.
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