- Senex has added another customer in Queensland to its supply portfolio.
- The energy firm has entered into a gas supply agreement with a mine owned by 29Metals.
- The gas sales agreement will be mutually beneficial for SXY and 29M.
Senex Energy Limited (ASX:SXY) announced a new gas sales deal to supply natural gas to the Capricorn copper mine. The Capricorn copper mine is located in Queensland and comes under the ownership of Australian resources company 29Metals Limited (ASX:29M).
- Under the contract, Senex will supply around 2.5 petajoules (PJ) of natural gas to Capricorn mines for over three years.
- Natural gas shall be supplied by SXY at the Diamantina Power Station, which generates power for fulfilling the operational requirements of the Capricorn mine.
- The Diamantina Power Station is located at Mt Mount Isa, Queensland and is owned and operated by APA Group.
- The three-year agreement will begin from 1 January 2022, and SXY will supply gas at a fixed price, which will align with ongoing market levels.
- The agreement is extendable for two years, increasing SXY sales up to 4 PJ.
Why SXY signed the deal?
- For SXY the natural gas supply deal comes from another strong regional customer in Queensland. The current contract is Senex’s second gas supply agreement in Queensland’s North-West minerals province. The first one being with zinc concentrate producer New Century Resources.
- For the Queensland Government also, copper has a significant role in its strategic blueprint for the minerals province. It is an essential metal for operation of next-gen, clean technologies like solar power and wind power. It is also used to produce electric vehicles.
- Senex thus seeks to build a strong, long-term relationship with 29M. It is mutually beneficial and supports jobs, the economy even Australia’s energy demand in its upcoming lower carbon future.
- Senex in addition to the current deal, has also signed agreements with other domestic customers, including Adbri, CSR Building Products, Opal, Orora, CleanCo Queensland and Visy Glass, for 80 PJ of natural gas supply.
On ASX, SXY shares were spotted trading a tad down at AU$3.530 per share.
Copper being a critical metal for the future is supposed to continue its demand for the long term. SXY’s current deal with Capricorn copper mines can bring it a long term customer for natural gas supply. It is also an addition to SXY’s portfolio of Queensland customers.