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Woodside and TXU finalise gas sales agreement

Posted: 14 April 2004

Woodside Energy Ltd. and TXU Electricity Ltd have signed a gas sales agreement under which TXU will buy Woodside’s share of natural gas from the Otway Gas Project at up to 30 petajoules a year for more than 10 years.

The agreement is conditional on the project receiving all joint venture and government approvals by mid-2004 and follows a heads of agreement signed with TXU in August 2002. The joint venturers are marketing their gas separately.

TXU Electricity is a subsidiary of TXU Australia, a major gas and electricity retailer in Victoria and South Australia and operator of the Torrens Island Power Station in South Australia. TXU is the largest shipper and one-third owner of the recently commissioned SEAGas pipeline between Port Campbell, in western Victoria, and Adelaide.

The Otway Gas Project includes the development of the Geographe gas field, about 55km south of Port Campbell in Victorian permit Vic/P43, and the Thylacine gas field, a further 15km south in Tasmanian permit T/30P.

Natural gas, liquefied petroleum gas and condensate will be produced from the gas fields and transferred by subsea and underground pipeline to an onshore gas processing plant next to TXU’s Iona gas plant, about 6km north of Port Campbell.

Production is planned to start in 2006 at up to 60 petajoules a year. This is equivalent to about 10 per cent of south-eastern Australia’s current gas demand.

The project will produce up to 950,000 barrels of condensate and up to 125,000 tonnes of LPG a year.

Woodside’s Gas Business Unit Director, David Maxwell, said the gas sales contract with TXU was an important step in achieving Woodside’s commitment to establish a significant gas business in eastern Australia.

“The contract involves more than half the gas to be produced from the Geographe and Thylacine fields,” he said.

“The Otway Gas Project should give south-eastern Australia gas customers the confidence that an alternative, competitively priced gas supply will be available.”

Participants in the project are Woodside, with 51.55 per cent (Operator), Origin Energy Resources Limited (29.75 per cent), Benaris International NV (12.7 per cent) and CalEnergy Gas (Australia) Limited (6 per cent).

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Posted by Richard Price, Editor

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