NZ Oil and Gas signs supply deal with Shell Australia

Industrial gas pipeline at Mereenie gas fields (shell australia coal cap)
Image: Shutterstock

New Zealand Oil and Gas (NZOG) has inked a one-year deal with Shell Australia to deliver 0.64PJ of gas from its Mereenie gas field starting 2025 for supply into the Australian east coast domestic market, Reuters reports.

The deal comes at a time Australia’s east coast is forecast to face a shortfall of 56PJ of gas—equivalent to about 10% of demand—in 2023, which has prompted the country’s competition watchdog to urge government to curb exports.

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The market is under pressure as a protracted Russia-Ukraine war, along with sanctions on Russia, has disrupted supply chains and spurred volatility in natural gas prices.

“Gas will be supplied into the east coast domestic market, with pricing under the GSA (gas supply agreement) reflecting strong market conditions,” NZOG said.

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The Mereenie joint venture (JV)—which operates the field in Northern Territory, Australia, and is controlled by three companies including NZOG—will deliver up to 3.65PJ of gas to Shell Australia over the one-year term, NZOG said.

New Zealand Oil and Gas (NZOG) directly and indirectly holds a 25% stake in the JV, Central Petroleum owns another 25%, and the rest is owned by a unit of Macquarie Group.

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