The deals will see the JV supply gas for power generation in South Australia and manufacturing in Queensland.
Shell today announced it will supply around 8PJs of gas to Engie’s Pelican Point power plant in South Australia for five months over the peak winter period to help secure electricity contracts to major industrial users.
An 18-month agreement will supply gas from Queensland’s Surat Basin gas fields to Orica’s Yarwun facility near Gladstone, which produces explosives and cyanide for the mining industry.
Shell chairman Zoe Yujnovich said supplying the Australian domestic gas market was an important part of Shell’s business in Australia.
“These new sales agreements come after significant contracts were signed with power generators and retailers,” Zoe said.
“Together they bring QGC’s total domestic sales to about 11% of east coast demand for 2017.
“Shell’s business on the east coast has reacted to the gas market and reduced export volumes to supply additional gas to the domestic market during 2017.”
Zoe said Shell had long held the view that community acceptance of an LNG export industry depended on a reliable supply of gas to Australian customers - including factories and homes.
“Make no mistake the business I lead is pursuing further domestic supply agreements - and has taken proactive steps to supply the east coast gas market,” she said.
Shell’s QGC business is a net contributor to the domestic gas market and will sell more than 75 petajoules (PJs), net of domestic gas purchases, to customers in Australia this year. This represents more than 10% of east coast gas demand and 40% of Queensland’s demand.