Amplitude Energy and O.G. Energy have locked in a foundational gas sales agreement with EnergyAustralia, committing to supply 30 PJ of gas from the East Coast Supply Project starting in late 2028. This deal marks a significant step toward the project's development amid ongoing negotiations with other buyers.
- Binding 30 PJ gas sales agreement signed with EnergyAustralia
- Supply to commence in second half of 2028 over four years
- Agreement price fixed with annual CPI escalation
- Contract conditional on exploration success and Final Investment Decision
- Amplitude Energy advancing talks with additional potential customers
Foundation Agreement Signals Confidence in East Coast Supply Project
Amplitude Energy Limited (ASX: AEL), alongside joint venture partner O.G. Energy, has taken a pivotal step in advancing the East Coast Supply Project (ECSP) by executing a binding Foundation Gas Sales Agreement (GSA) with EnergyAustralia. The agreement commits to the supply of 30 petajoules (PJ) of gas over an initial four-year term, with deliveries set to begin in the second half of 2028.
The GSA outlines a fixed sales price subject to annual consumer price index (CPI) adjustments, reflecting current market rates. This arrangement not only provides a stable revenue foundation for the ECSP but also underscores the strong demand for reliable domestic gas supply in Southeast Australia, a region heavily reliant on consistent energy sources.
Conditional Commitments and Project Milestones Ahead
Despite the binding nature of the agreement, the contract remains conditional on several critical factors, including successful exploration outcomes during the ECSP drilling phase and the Final Investment Decision (FID) for project development. These conditions highlight the inherent risks and uncertainties typical of large-scale energy projects, where geological and commercial viability must align before full-scale development proceeds.
Amplitude Energy’s Managing Director and CEO, Jane Norman, expressed optimism about the partnership, noting EnergyAustralia’s role as a foundation customer not only for the ECSP but also for the company’s Sole gas project. This continuity signals a deepening relationship and mutual confidence between supplier and buyer in navigating Australia’s evolving energy landscape.
Expanding Customer Base and Strategic Positioning
Beyond this foundational agreement, Amplitude Energy is actively engaged in advanced negotiations with several other potential customers. The company anticipates securing additional Foundation GSAs as it moves closer to the FID, which will be a critical milestone determining the project's future trajectory.
Amplitude Energy’s portfolio, which includes offshore gas fields in Commonwealth waters and onshore processing facilities in the Otway and Gippsland Basins, positions it well to meet growing domestic demand. The ECSP, alongside undeveloped fields like Annie and Manta, represents a strategic asset cluster that could significantly enhance supply security for Southeast Australia.
As the energy sector grapples with supply challenges and the transition to cleaner fuels, deals like this one underscore the ongoing importance of natural gas as a reliable bridge fuel. The ECSP’s progress will be closely watched by investors and industry observers alike, given its potential to influence regional gas markets and energy security.
Bottom Line?
With exploration success and investment decisions looming, Amplitude Energy’s ECSP deal sets the stage for a critical phase in Australia’s gas supply story.
Questions in the middle?
- What are the latest exploration results and their impact on the ECSP’s viability?
- When is the Final Investment Decision expected, and what factors will influence it?
- Which other customers are in advanced talks, and how might additional GSAs shape project scale?