The Australian Competition and Consumer Commission (ACCC) looks set to approve a gas joint marketing arrangement between Central Petroleum and Macquarie Mereenie.
The ACCC released a draft determination for a joint marketing arrangement on Friday last week for the Mereenie oil and gas field in the Amadeus Basin in the Northern Territory.
In order to allow the development of Mereenie gas as soon as possible, the ACCC has granted interim authorisation, which allows the parties to begin negotiating joint supply agreements with customers pending the ACCC’s final determination.
Central and Macquarie propose to jointly market gas produced from the Mereenie field and give effect to gas supply agreements with customers with common terms and conditions including price.
The companies have applied for authorisation through the ACCC because without it, the joint marketing arrangement would likely breach competition laws.
The ACCC’s draft determination is subject to the following conditions:
- A three year time limit (in which gas supply agreements can be collectively negotiated)
- A time limit of 31 December 2028 on the term of gas supply agreement that are collectively negotiated.
Central will convene a joint venture meeting as soon as possible to seek approval for the drilling of West Mereenie-26 to go ahead as scheduled, as well as plant upgrade aimed at increasing processing capacity to around 63 TJ/d gross, of which 4 TJ/d will be used as fuel gas.
The Mereenie joint venture is a 50:50 split between Central Petroleum and Macquarie Mereenie, a subsidiary of Macquarie Group.
Central and Macquarie intend to develop new reserves at Mereenie, estimated at between 110-185 PetaJoules (PJ), by drilling two new wells at the field.
Central and Macquarie intend to make an additional 15 PJ per annum available for supply into the Jemena-operated Northern Gas Pipeline.