Origin secures long term Queensland electricity hedge
ASX/Media Releases
23 Jul 2008
Origin Energy today announced completion of an electricity hedge purchase and gas supply agreement with the Braemar 2 Partnership* that will support the supply of electricity products to Origin customers in Queensland.
The final agreements with Braemar 2 Partnership support the financial close and development of a second 450 MW open cycle gas-fired power station at Braemar in south-East Queensland (“Braemar 2”). Braemar 2 will commission during the first quarter of 2009.
Origin will purchase 300 MW of electricity hedges for a minimum of 10 years, with options over the additional 150 MW of capacity. Origin has also secured the right to supply a portion of Braemar 2 Partnership’s gas requirements during 2009 and 2010. The completion of the Braemar 2 agreements, along with a separate agreement to restructure the contractual arrangements with the owners of the Braemar 1 power station, leaves Origin with up to 825 MW of capacity from these two power stations.
Origin Chief Operating Officer Karen Moses said the contracts enhance Origin’s ability to supply retail customers and manage wholesale electricity price risk, while providing significant integration benefits for Origin’s operations in Queensland.
“The electricity hedge purchase agreement enables Origin to manage price volatility during peak demand, while the gas supply agreement supports the flexibility of our Queensland gas portfolio”.
“Together with Origin’s current power stations and those under development, the Braemar 2 contracts will help Origin meet rising electricity demand in Queensland and support the monetisation of Queensland’s extensive coal seam gas resources,” she said.
“Origin is committed to lowering the emissions intensity of its energy supply chain. Fuelled by coal seam gas, the Braemar 2 power station will create significantly less greenhouse gas emissions than an equivalent coal-fired power station,” she said.
* Participants in the Braemar 2 Partnership are:
ERM Power 50%
Arrow Energy (ASX: AOE) 50%
For more information please contact:
Media – Origin Energy
Michelle Hindson
Acting General Manager, Corporate Communications
Ph: 02 8345 5217
Mobile: 0414 207 049
Investors – Origin Energy
Angus Guthrie
Manager Investor Relations
Ph: 02 8345 5558
Mobile: 0417 864 255
About Origin Energy - Origin is Australasia’s leading integrated energy company focused on gas and oil exploration and production, power generation and energy retailing. Listed in the ASX top 50 the company has over 3,500 employees, is the largest holder of gas reserves in eastern Australia and is the second largest energy retailer in Australia, servicing over 3 million electricity, natural gas and LPG accounts. Origin’s strategic positioning and portfolio of assets provides flexibility, stability and significant opportunities for growth in the ever changing energy industry. Origin Energy is also the major shareholder in Contact Energy of New Zealand. The company has a strong focus on ensuring the sustainability of its operations, and in 2007 the company received the Ethical Investor 2007 Sustainable Company of the Year award.