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Shell agrees gas supply deals in Australia

By Robb M. Stewart: Published: Apr 6, 2017 2:20 a.m. ET

MELBOURNE, Australia–Under pressure to ensure industry in Australia isn’t hit with a shortfall of natural gas, Royal Dutch Shell PLC (RDSA) said it had agreed short-term sales deals with a power supplier and a maker of explosives.

The energy company is reducing exports of gas from its QGC operation in tropical Queensland in order to supply additional gas to the domestic market this year, said Zoe Yujnovich, the recently appointed chairwoman of Shell’s Australian business.

The supply contracts add to sales agreements signed with power generators and retailers, and bring total domestic sales from QGC to about 11% of east-coast demand for 2017, Ms. Yujnovich said.

The company said it would supply about 8 petajoules of gas to Engie SA’s (ENGI.FR) Pelican Point power plant in South Australia state for five months over the peak winter period, and had agreed an 18-month deal to supply gas from Queensland’s Surat Basin fields to Orica Ltd.’s (ORI.AU) Yarwun explosives and cyanide operation.

“Shell’s business on the east coast has reacted to the gas market,” she said.

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