Vintage Energy’s (ASX: VEN) strategy to help supply the gas deprived Australian eastern states energy market has achieved another milestone with the Australian Competition and Consumer Commission (ACCC) giving a green light for joint marketing of gas from the Odin gas field in central Australia.
Formed to take advantage of the energy and gas supply crisis in the east coast, Vintage is a 50% interest holder and operator of the ATP 2021 and PRL 211 Joint Venture which also includes Metgasco (ASX: MEL), 25% and Bridgeport (Cooper Basin) Pty Ltd, 25%.
The ACCC approval means the JV members can now jointly market Odin gas for an initial five years with agreements able to be signed for up to 15 years.
Within the initial period, the JV members now have approval able to enter into gas supply agreements with customers on common terms and conditions, including price.
“The Odin field is relatively small compared to the overall size of the east coast gas market, so the amount of gas to be jointly marketed is unlikely to adversely affect competition,” ACCC commissioner Anna Brakey said in granting the approval.
“We believe a key benefit of the joint marketing arrangement is it will expedite the development of the new gas supply from the Odin field. That may see less reliance on other sources of energy that create greater carbon emissions.”
Odin field background
The Odin field, which is estimated to hold 40 petajoules of 2C Contingent Resources, is contained with Petroleum Retention Licence 211 (PRL 211) granted by the South Australian Government, and Authority to Prospect 2021 (ATP 2021) granted by the Queensland Government.
Vintage, Metgasco and Bridgeport are also currently developing the Vali field in permit ATP 2021. The JV was granted authorisation to enter into joint gas marketing arrangements in respect of the Vali field in May 2021.
Gas sales agreement
Earlier this month Vintage and its JV partners signed a master gas sales agreement for an initial supply of gas from the Odin field with Pelican Point Power Limited, a joint venture between ENGIE Australia and New Zealand (72%) and Mitsui & Co Ltd (28%).
Under that agreement, the partners will supply gas from Odin from field start-up until 31 December 2024.
The gas sale deal came on the back of agreement by the PRL 211 JV to accelerate connection of the Odin-1 gas well in South Australia.
Earlier this year, Vintage achieved its maiden production success with initial flow of gas from the Vali field in Queensland permit ATP 2021. That gas is assigned to AGL and its eastern states’ customers.
Gas market improving
In its March 2023 interim gas inquiry report, the ACCC suggested there should be sufficient gas supply in the east coast gas market against forecast demand if LNG producers contract another three petajoules (PJ) of gas in 2023.
The ACCC said this an improvement of 27 PJ since the previous forecast in January.
“The available data shows that the outlook for the east coast gas market has improved and the market is not expected to face a material shortfall in 2023,” ACCC Chair Gina Cass-Gottlieb said.
“If LNG producers commit an extra three PJ of gas to the domestic market, in addition to amounts already contracted, a shortfall will likely be avoided, but we remain concerned about adequacy of gas supply in the winter months.”
The ACCC said the improvement is related to an increase in forecast gas production, and the LNG producers committing some additional sales to the domestic market.
