Origin Energy Limited (Origin) today announced it had signed two transactions with ENGIE in Australia. The first is an agreement to underpin the operation of Pelican Point power station’s second generation unit (Pelican Point agreement), and the second is an agreement to make more natural gas available for customers in South Australia and Victoria (Gas Sale Agreement).
Under the terms of the Pelican Point agreement, Origin will supply gas to Pelican Point and for a fixed charge will gain access to 240MW of electricity production, which will be used by Origin to supply customers in South Australia.
The Pelican Point agreement, which will run from 1 July 2017 to 30 June 2020, will better position Pelican Point to support peak demand over the 2017/2018 summer period and beyond.
In addition, under the Gas Sale Agreement, Origin will sell 8PJs of natural gas to ENGIE in Australia across the 2018 and 2019 calendar years to help it meet the needs of its customers.
Origin CEO, Frank Calabria said, “I’m delighted Origin has been able to work with ENGIE in Australia to help address South Australia’s energy security challenges.
“The power outages in South Australia reinforce the need for sufficient gas-fired power generation to be readily available, especially when wind and solar energy is not available.
“Energy security is critical to our customers and the state. These agreements are examples of immediate steps industry is taking to safeguard electricity supply and make sure more natural gas will be available to meet the needs of customers.
“We continue to work to improve energy security in South Australia. In February, Origin announced a new power purchase agreement to underpin construction of what will be Australia’s largest solar farm, the 220 MW Bungala project in Port Augusta. Solar is a more predictable form of renewable energy than wind, and can play an important role in underpinning system security.
“Right now there’s a national need for the industry and government to work together to make sensible – and swift – decisions to provide energy security, for the benefit of all Australians.
“To do this, we need to give some certainty to investment, so we can achieve the equally important objectives of making energy affordable, and moving Australia towards a cleaner supply.
“It’s really important to understand our energy market is in transition as are energy markets around the world.
“If industry and government work together, we believe we can restore the balance between energy security, affordability and sustainability in Australia.
“Renewable energy and natural gas are complementary sources of energy, and are expected to play an increasingly important role in helping Australia achieve these objectives,” Mr Calabria said.
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About Origin Energy
Origin Energy (ASX: ORG) is the leading Australian integrated energy company with market leading positions in energy retailing (approximately 4.2 million customer accounts), power generation (approximately 6,000 MW of capacity owned and contracted) and natural gas production (1,093 PJ of 2P reserves and annual production of 82 PJe). Through Australia Pacific LNG, its incorporated joint venture with ConocoPhillips and Sinopec, Origin is developing Australia’s biggest CSG to LNG project based on the country’s largest 2P CSG reserves base.