Under the heads of agreement (HoA), it is anticipated that coal seam gas would be initially delivered to New South Wales gas markets via APA’s Central West Pipeline, with APA’s New South Wales pipeline system to be subsequently expanded as gas production and markets grow.
By matching gas production, pipeline and market requirements in this manner, Gastar and ESG expect to minimize capital requirements, while realizing favorable gas transportation tariffs.
Russell Porter, Gastar’s chairman and CEO, said: Gastar and Eastern Star Gas plan to work with APA to develop arrangements that could potentially involve the construction of a new pipeline lateral to connect our PEL 238 Narrabri coal seam gas project into APA’s existing gas transmission pipeline system. By utilizing existing infrastructure, early market access could be secured, while complementing the later large-scale gas supply agreements anticipated by our existing memoranda of understanding with Macquarie Generation and Babcock & Brown.
