FERTILISER manufacturer Incitec Pivot (IPL) has announced a gas supply agreement with Walloons Coal Seam Gas (a subsidiary of QGC, recently bought out by Shell) for its Phosphate Hill manufacturing plant.
In a statement to the ASX, Incitec Pivot said this interim gas supply agreement would last two years from January 1, 2017 through to the anticipated commencement of supply from Power and Water Corporation (PWC) under a long term gas supply agreement announced in November 2015.
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The agreement with PWC is scheduled to commence upon completion of the Northern Gas Pipeline that will be built from Tennant Creek to Mount Isa.
IPL said it has also entered into a gas transportation agreement with the APA Group for the transportation of gas under the QGC agreement which would provide flexible services across multiple pipeline assets.
IPL managing director and CEO James Fazzino said gas supply costs were expected to decrease by $20 million a year in 2017 and again in 2018.
“These arrangements, which secure gas for Phosphate Hill for 2017 and 2018, reflect our continuous improvement culture and significantly lower our input costs,” Mr Fazzino said.
“This is a particularly pleasing outcome given the challenging markets in which we are currently operating”.
The deal with APA Group will see gas transported from the Surat Basin in southern Queensland to Phosphate Hill using APA’s services across the Roma Brisbane Pipelines, the Wallumbilla Gas Hub, the South West Queensland Pipeline, and the Carpentaria Gas Pipeline.
