(Reuters) - New Zealand Oil and Gas (NZOG) Ltd said it had signed a 1-year deal with Shell's Australian unit to deliver 0.64 petajoules (PJ) of gas from its Mereenie gas field starting 2025 for supply into the Australian east coast domestic market.
The deal comes at a time Australia's east coast is forecast to face a shortfall of 56 PJ of gas - equivalent to about 10% of demand - in 2023, which has prompted the country's competition watchdog to urge government to curb exports.
The market is under pressure as a protracted Russia-Ukraine war, along with sanctions on Russia, has disrupted supply chains and spurred volatility in natural gas prices.
"Gas will be supplied into the east coast domestic market, with pricing under the GSA (gas supply agreement) reflecting strong market conditions," NZOG said.
The Mereenie joint venture (JV) - which operates the field in Northern Territory, Australia and is controlled by three companies including NZOG - will deliver up to 3.65 PJ of gas to Shell Australia over the one-year term, NZOG said on Thursday. (https://bit.ly/3Uf0vqb)
New Zealand Oil and Gas (NZOG) directly and indirectly holds a 25% stake in the JV, Central Petroleum owns another 25%, and the rest is owned by a unit of Macquarie Group.
(Reporting by Archishma Iyer In Bengaluru; Editing by Devika Syamnath and Shinjini Ganguli)