Senex Energy has announced the second domestic gas sales agreement within a week — a long-term deal with Adbri to supply up to 11 PJ of natural gas to support South Australian manufacturing operations to 2030.
Under the seven-year agreement, Senex’s Atlas domestic gas operation in Queensland’s Surat Basin will supply natural gas from January 2023 to Adbri at the Moomba Gas Hub at a fixed price, in line with current market levels.
Recently Senex announced a gas supply agreement with Nyrstar to supply 1.7 PJ of natural gas over three years from 1 January 2022 for operational use at Nyrstar’s metal processing plant at Port Pirie, South Australia.
Senex Managing Director and CEO Ian Davies said the company was proud to supply Adbri, who are a leading cement manufacturer in the Australian market. Gas continues to form an important part of Adbri’s low-carbon fuel portfolio.
“Senex is delighted to welcome Adbri as a new long-term customer into our growing portfolio of leading manufacturers and power generators, broadening our reach throughout the east coast of Australia.
“We look forward to building another strong and mutually beneficial relationship that supports jobs, the economy and helps meet Australia’s energy demand as it transitions to a lower carbon future,” Mr Davies said.
Nick Miller, CEO of Adbri, welcomed the new gas supply agreement with Senex.
“We are pleased to execute this long-term agreement that helps underpin our low-cost and low-carbon cement manufacturing operations in South Australia, whilst also supporting the economy and local jobs.
“I commend the Senex team for its responsive, flexible and open approach to meeting our energy needs. We look forward to continuing to build our new relationship,” Mr Miller said.
Since 2019, Senex has signed almost 60 PJ of natural gas sales agreements with a range of household names including CSR Building Products, Orora, Visy Glass, CleanCo Queensland, Alinta Energy and Southern Oil Refining.
Adbri manufactures cement, lime, concrete, aggregates, concrete products and industrial minerals at over 160 facilities across Australia and employs more than 1,600 people across its diverse operations.
APPEA said the Gas Supply Agreement between Senex Energy and Adbri shows the market is working.
APPEA Chief Executive Andrew McConville said the announcement was the second in as many days for Senex after it announced a GSA to supply 1.7 PJ to Nyrstar’s metal processing plant at Port Pirie, South Australia.
“These two GSAs announced means there have now been 106 agreements to supply gas to major domestic customers since 2012,” Mr McConville said.
“Under the seven-year agreement, Senex will supply natural gas from January 2023 to Adbri at the Moomba Gas Hub at a fixed price.
“The truth is domestic users are paying considerably less for Australian gas over the long term than overseas markets and have been doing so for some time,” Mr McConville added.
“While we acknowledge those affected by the recent fluctuations in spot prices due to a number of uncontrollable factors, the vast bulk of manufacturers are like Adbri and are on longer-term contracts where prices do not fluctuate in line with spot price movements.
“At APPEA we understand spot prices can from time to time jump and hurt those manufacturers who haven’t locked in contracts and that is why the NSW Government’s decision to effectively ban gas exploration in that state is so baffling.
“Everyone knows the cheapest gas is the gas closest to markets and if some states opened the door to gas, prices could be even lower over the long term.
“Gas has showed how reliable it is throughout the pandemic and with the breakdown of other energy sources, the industry has continued to do the heavy lifting to ensure the lights are kept on, factories kept running and that there is no gas shortfall in the domestic market.”