Origin signs deal to supply more gas to QCLNG project

ORIGIN Energy will sell additional gas to Gladstone's QCLNG project in a deal that has added to growing doubts about the productivity of Queenland's coal seam gas wells.

The deal, announced on Thursday, will involve Origin supplying up to 30 petajoules of gas a year to BG Group's QCLNG project in 2014 and 2015 at a price linked to the oil price.

Origin, which holds the largest coal seam gas resource position in Queensland, had earlier signed a deal to supply 365 petajoules over 10 years to the Santos-led GLNG project.

Origin chief executive officer energy markets Frank Calabria said the supply agreement provided Origin with an opportunity to "leverage its diverse gas portfolio and extensive transport flexibility to create further value in the gas market".

Deutsche Bank analyst John Hirjee told The Australian the latest deal appeared to reinforce the challenges faced by the Queensland LNG players in securing enough coal-seam gas production to meet their early needs.

"With QCLNG targeting first LNG in 2014, it is difficult to draw any conclusion other than the project is struggling with well productivity," he said.


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