Senex to invest more than A$1 billion to boost domestic natural gas supply

Senex is set to invest more than A$1 billion in a major expansion of its Atlas and Roma North  natural gas developments in Queensland’s Surat Basin to help secure Australia’s energy future. 

After years of exploration and studies, Senex is ready to increase its natural gas production to  60 petajoules (PJ) per year with work planned to begin in coming weeks. First gas from this major  investment is targeted to deliver much needed gas supply to the domestic market within two years.  

Gas production of 60 PJ per year represents more than 10 per cent of annual east coast domestic  gas requirements, around 40 per cent of Queensland’s domestic gas requirements, and is  equivalent to the electricity used by more than 2.7 million homes each year. 

Senex CEO Ian Davies said: “This new investment to significantly boost domestic natural gas supply  supports Australia’s energy security and continues to underscore Queensland’s position as a reliable  energy provider”. 

“Senex prides itself on supporting the production of natural gas for the Australian market. It was only  three years ago Senex began supplying the east coast market from Queensland’s Surat Basin and  to date has already invested more than half a billion dollars in new supply. 

“The willingness of our new owners POSCO INTERNATIONAL Corporation and Hancock Energy  Corporation to commit significant additional new capital allows Senex to bring critical new gas  supply to market – essential for manufacturing, industry, homes, hospitals and electricity generation – beyond which was possible prior to their acquisition of Senex earlier this year,” Mr Davies said. 

“The recent electricity crisis proved natural gas is critical to providing secure and reliable energy for  Australians and is needed to underpin renewables and replace aging coal generation, without which  electricity costs will further rise, while infrastructure and technology is developed to support  increased renewable generation,” he said. 

Jobs and economic win for Queensland 

Senex’s investment is expected to create more than 200 jobs during construction and another  50 permanent roles, and is expected to inject more than $200 million into local businesses and  regional areas. 

“This investment will put people in work, support businesses and families in the country areas we  operate in, and provide long-term benefits to Queenslanders with royalties helping to fund hospitals,  roads, emergency services and more, as we support Australia’s energy independence and security,”  Mr Davies said.

Certainty for manufacturers and other gas users  

Senex supplies a diverse range of gas customers, signing seven new material domestic gas supply  agreements last year alone. 

“Senex supplies vital natural gas for electricity and the manufacturing of everyday consumer  products from bricks to bottles to plasterboard. This investment continues to strengthen Senex’s support of domestic gas users with material new gas supply,” Mr Davies said. 

Senex has now signed around 90 PJ of term agreements, including 43 PJ in the past 12 months  alone. Senex has also agreed a number of long-term Gas Sales Agreements (GSAs) including an  8-year supply agreement with Orora and a 7-year supply agreement with Adbri that extends to 2030. 

Senex will soon conduct a process seeking Expressions of Interest (EOIs) for the supply of gas from  Senex’s new investment, supporting customers by optimising flexibility of terms and price  competitiveness across a portfolio of buyers with varying needs, with Senex’s growing portfolio of  natural gas supply. 

Energy security for Australia  

Mr Davies noted the Australian Competition and Consumer Commission (ACCC) July Gas Inquiry  Interim Report (ACCC Interim Report), released last week, underscored the importance of upstream  competition and the timeliness of increased supply into the east coast gas market. Capital,  infrastructure and regulation were identified as barriers to increasing gas supply to the east coast.  

“The answer to bringing down prices is a greater diversity of producers in the market and more  supply. For that producers must have the confidence to invest,” he said. 

“Senex is ready to invest more than A$1 billion in new gas supply and we call on governments and  regulators, infrastructure owners and operators, and other gas market participants to work constructively to bring gas to market efficiently and as soon as possible.” 

Mr Davies said Senex values its relationships with its customers that include household names such  as Visy, CSR, Orora, Adbri, Southern Oil Refining and CleanCo. 

“Senex is proud of its domestic gas relationships that are so important for Australians and our living  standards. 

“And through our supply arrangements with GLNG, we are providing energy security and economic  security for our trading partners, displacing coal-fired generation,” he said. 

Green light for governments to plan for the future 

The recent electricity crisis caused by coal supply shortages and generation outages, combined with  lower renewable generation and underinvestment in new gas supply since 2015, highlighted the  need for more secure, reliable and affordable natural gas supply. 

Mr Davies said more than two-thirds of the capital commitment is planned to be invested over the  next two years on gas infrastructure and wells at Senex’s Surat Basin developments in western  Queensland, providing a major economic boost to regional economies.

“Senex is showing that Queensland is continuing to do the heavy lifting in producing the natural gas  that Australia needs to keep the lights on, especially during periods of peak demand in the National  Electricity Market when renewables may be unavailable, and coal is becoming increasingly  unavailable despite Australia’s reserves,” Mr Davies said. 

“We look forward to continuing to work collaboratively with the Australian and Queensland  governments to finalise the necessary regulatory approvals for this investment, and supplying more  gas to market as soon as possible,” he said. 

“With the necessary regulatory approvals in place, Senex can unlock more gas which Australians  need, and create skilled, secure, well-paid jobs for Queensland workers and drive economic growth  with this billion-dollar expansion,” Mr Davies said. 

About Senex  

Senex is an established and growing Australian producer of low-carbon natural gas, committed to securing Australia’s  energy future. Senex has committed to invest more than A$1 billion in a major expansion of its Atlas and Roma North  natural gas developments in Queensland’s Surat Basin. The expansion is expected to increase Senex’s production to  60 petajoules (PJ) a year by the end of 2025, which is equivalent to more than 10 per cent of annual east coast domestic gas demand or around 40 per cent of Queensland’s demand. Importantly, increased supply of Senex’s sustainable and  reliable natural gas means energy security for industry and manufacturers. Senex has also committed to net zero  operational emissions by 2040. Read Senex’s Decarbonisation Action Plan here.