Origin Energy Limited says that its subsidiary Origin Energy Developments Pty Ltd has signed a new contract for the sale of gas in the Perth Basin to a subsidiary of AWE Limited. The gas will be onsold to the Western Australian energy retailer Synergy.

The contract has been made possible by recent gas discoveries in the Redback area of the Perth Basin, together with existing gas reserves in local fields.

The gas sales will commence during August and will be for a period in excess of five years. Under the agreement Origin will sell up to 25 petajoules of gas subject to the confirmation of gas reserves by November 2010.

In commenting on the gas sales agreement, Origin's Executive General Manager Upstream Oil and Gas, Mr Paul Zealand said, "It is particularly pleasing to be able to commercialise this gas so soon after its discovery.

"The Redback South 1 and Redback 2 wells were drilled during the course of the 2010 financial year and both resulted in the discovery of gas, with tests on Redback South recording one of the highest gas flow rates ever recorded for an onshore well in Australia. Furthermore we are able to take advantage of spare gas processing capacity at our nearby Beharra Springs gas plant, so development costs are low and gas supplies can commence immediately.

"We are continuing with further technical evaluation and appraisal drilling aimed at increasing reserves in the Perth Basin, including the Wolf-1 appraisal well currently being drilled in the L11 license area," he said.

Tags: Origin Energy