Amplitude Energy has locked in a binding gas sales agreement with AGL Energy for 20 PJ of gas from the East Coast Supply Project, contingent on drilling results and set to start in mid-2028.
- Binding 20 PJ gas sales agreement signed with AGL Energy
- Supply scheduled to begin in second half of 2028 over four years
- Contract price oil-linked, reflecting current market conditions
- Agreement conditional on successful ECSP drilling outcomes
- Strengthens long-term partnership and supports Southeast Australia gas supply
Foundation Gas Sales Agreement with AGL Energy
Amplitude Energy (ASX:AEL) has taken a significant step in underpinning the East Coast Supply Project (ECSP) by executing a binding Foundation Gas Sales Agreement (GSA) with AGL Energy. The deal commits AGL to purchase 20 petajoules of gas over an initial four-year term, equating to 5 PJ annually, with supply targeted to commence in the second half of 2028. The sales price is oil-linked, aligning with prevailing market rates and conditions.
Conditional Supply Hinges on Drilling Success
While the agreement marks a vote of confidence in the ECSP, it remains conditional on the current drilling campaign delivering confirmed reserve bookings and production deliverability. This caveat underscores the early stage of the project’s development and the critical nature of exploration results in shaping Amplitude Energy’s future production profile.
Strategic Partnership and Market Implications
The GSA extends the longstanding partnership between Amplitude Energy and AGL, with AGL previously acting as a foundation buyer for the Sole gas project. Jane Norman, Amplitude’s CEO, highlighted the deal as a reflection of robust demand for reliable domestic gas in Southeast Australia and mutual confidence in the ECSP’s prospects. AGL’s Chief Commercial Officer, David Moretto, emphasised the agreement’s role in securing dependable gas supply to support large-scale renewables and customer needs during the energy transition.
This development follows Amplitude Energy’s recent progress in securing foundational contracts, including a 30 PJ deal with EnergyAustralia for the ECSP, announced earlier this year. Together, these agreements are pivotal in de-risking the project and signalling growing market appetite for new gas supply amid tight East Coast gas markets. The company’s ongoing drilling success, such as promising reservoir data from the Isabella prospect, will be closely watched as indicators of the ECSP’s viability and timing.
Bottom Line?
The AGL deal cements demand for ECSP gas but hinges on drilling results that will shape Amplitude Energy’s production trajectory and project timeline.
Questions in the middle?
- Will the ongoing drilling campaign confirm reserves sufficient to satisfy the GSA conditions?
- How might oil-linked pricing perform amid evolving energy market dynamics over the next four years?
- Could further foundation contracts emerge to bolster the ECSP’s financial and operational footing?