British Gas turns up the heat on export plant
British Gas is seeking to finalise gas purchase agreements with new suppliers as it works to ramp up volumes at its Queensland export plant as soon as it is finished.
The company is hoping for first gas to flow through the plant as soon as late this year as it begins commissioning, along with starting power generation. Initial gas flows of about 20 million cubic feet are needed in the first two or three months.
"We are negotiating a number of third-party supply agreements, so that we are as well placed as we can possibly be to fill those trains [plants] to the brim as soon as they start up," managing director Chris Finlayson told analysts last week.
"The faster we can go and the faster we can fill them both, the more rapidly we get our cash flow. We'll see how we go in the next six to nine months."
Ramping up export quickly was "really the value creator ... rather than the absolute date of a start-up", he said.
Confirmation that the company is seeking additional gas reserves comes amid speculation in the sector that each of the three Queensland export gas projects may be short of gas to meet their contractual commitments.
Earlier this year, British Gas finalised the sale of a half-interest in the export gas project to China National Overseas Oil Co, which included a share of exploration acreage. British Gas is looking to free up cash from the project by selling part of its equity in the infrastructure.
Recently, Origin Energy flagged the potential sale of part of its equity in its own pipeline, although details are still sketchy.
Mr Finlayson told analysts British Gas is hoping to sell equity in its water treatment plant along with its gas supply pipeline on a sale and leaseback basis.
"We are doing lots of work looking at that [but] that was not going to be possible ... until there was an income stream to show with it, and as such it would have to be after they came on stream.
"It's a little premature to bring this to conclusion."
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