Magellan Petroleum has signed a gas supply and purchase agreement (GSPA) with Northern Territory Power and Water (PWC) for the sale of gas from Dingo field in Northern Territory, Australia.
Magellan will supply up to 30 billion cubic feet of gas to PWC on a 100% take-or-pay basis for 20 years. The supply obligation is expected to begin in early 2015 at a fixed price.
The long term contract allows the company to use the time before the commencement of gas supply to design, construct and commission surface facilities and tie-in pipelines necessary for the production and delivery of Dingo’s gas.
At present, front-end engineering and design (FEED) is being undertaken by the company, which is a continuation of work carried out during the pre-FEED stage in fiscal 2013.
Magellan president and CEO Thomas Wilson said that Dingo’s reserves potential was established through a four-well exploratory programme, but the field has since been left inactive with no customer.
"We will work vigorously to achieve the regulatory approvals and commissioning of Dingo as quickly as possible, and we look forward to working once again with PWC, who has been a valued customer of Magellan at our Palm Valley gas field over the past three decades," Wilson added.
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By GlobalDataThe company has to obtain all regulatory approvals and constructing facilities necessary to begin the Dingo field for commercial gas production.
