Posco's Senex to go ahead with $708 mln Australian gas expansion

Posco International

11/08/2022 24:35

By Sonali Paul
    MELBOURNE, Aug 11 (Reuters) - Senex Energy said on Thursday
its owners, Korea's Posco International Corp  047050.KS  and
Hancock Energy, agreed to invest more than A$1 billion ($708
million) to triple the company's gas output by 2025.
    Senex, which began producing gas in Queensland state three
years ago, has long planned to expand its output to 60
petajoules (PJ) a year by 2025 and now has the funding capacity
from its new owners to do so. 
    The go-ahead comes as eastern Australia faces a gas supply
crunch and soaring prices, with gas-dependent manufacturers
pressing for cheaper supplies at a time when most of
Queensland's gas output is being exported.
    Domestic customers in eastern Australia used around 580 PJ
of gas in 2020, according to the Australian Energy Regulator.  
Competition for gas supply has grown as increasing volumes are
going into power generation to back up intermittent wind and
solar and more frequent coal-fired plant outages.
    "This new investment to significantly boost domestic natural
gas supply supports Australia's energy security," Senex Chief
Executive Officer Ian Davies said in a statement.
    More than two-thirds of the A$1 billion will be invested
over the next two years on gas infrastructure and drilling wells
in the Surat Basin in Queensland, but still needs regulatory
approvals from the state and federal governments to go ahead.
    Senex supplies gas to a range of big manufacturers,
including packaging group Orora  ORA.AX  and cement maker AdBri
 ABC.AX , as well as to the Gladstone liquefied natural gas
(GLNG) export plant run by Santos Ltd  STO.AX . 
($1 = 1.4116 Australian dollars)

 (Reporting by Sonali Paul; Editing by Lincoln Feast.)
 ((Sonali.Paul@thomsonreuters.com; +61 407 119 523;))