Senex Energy inks supply deals with BlueScope and Visy
The group’s proposed $1bn gas expansion remains on pause, but the latest supply agreements hint a green light could be close if it can secure guarantees from the Albanese government.
Senex Energy has struck fresh supply deals with manufacturers BlueScope and Visy, as its proposed $1bn gas expansion development in Queensland edges closer to materialising.
The company, owned by South Korea’s Posco and Gina Rinehart’s Hancock Prospecting, earlier this year suspended its proposed $1bn Atlas project in Queensland.
Work remains on pause, but Senex on Tuesday said it has agreed two more sales agreements with BlueScope and Visy for 20 petajoules of natural gas for 10 years from January 2026 onwards.
Senex has now entered into sales agreements for 130PJ of gas to end users, stoking expectations that the project will proceed.
Senex chief executive Ian Davies said the deals provide certainty to vital industries.
“Steel is a key pillar of our modern world and it’s so important that this critical industry can continue in an economically sustainable way here in Australia,” Mr Davies said.
“Natural gas is an essential fuel in local manufacturing, especially those with high industrial heat loads. Natural gas will continue to play a vital role in Australian industry in both replacing more carbon-intensive forms of energy and providing a reliable source of energy as intermittent renewables and new technologies mature and work at scale.”
The Senex expansion has emerged as a bellwether for the effectiveness of the Albanese government’s intervention into the Australian gas market.
Labor last year imposed a cap on uncontracted gas at $12 a gigajoule and moved to establish a mandatory code of conduct that would force gas to be sold at “a reasonable price”.
The legislation sent shockwaves through the gas industry, which insisted the intervention failed to recognise and reflect the investment needed for exploration, but Labor said the intervention was needed to ensure the viability of the country’s manufacturing sector.
A series of concessions from Labor saw a relative calm descend across the market, but Senex remains unsure whether it will fall foul of the code of conduct.
Senex has ambitions to grow Atlas beyond the current expansion plans, which would technically remove its automatic exemption. Even if Senex only proceeds with the first expansion phase, the company is also unsure about whether other gas development interests would push it over the automatic exemption threshold.
Should Senex receive sufficient clarity and proceed with the development, Labor is likely to claim victory for the intervention.
Labor has said it has placed a manufacturing revival at the heart of its agenda, and the sector needs a cheap fuel source to guarantee its prosperity.
BlueScope chief executive of Australian steel products, Tania Archibald, said that the new gas supply deal would ensure its competitiveness.
“A secure and reliable supply of natural gas to our operations is important to BlueScope and a decade-long gas deal with Senex assists in meeting this objective. This contract plays a part in supporting our manufacturing operations, delivering quality steel products used in the Australian building, defence, agricultural and renewable energy industries.”
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