Australia-listed Icon Energy has signed a sales agreement with China s Shantou SinoEnergy to supply over 1.8 trillion cubic feet of liquefied natural gas over a 20 year period.
Under the agreement, which was signed today in a formal ceremony in Shantou City in China s Guandang Province, Icon will begin to supply the LNG no later than June 2016.
Icon did not give a value for the contract but said the price had been competitively set and would be reviewed every three years.
The company will also be able to supply gas from its own tenements in Australia or from a third party, but under the agreement would still need a minimum of 2 Tcf in proven and probable gas reserves.
Icon said agreement did not lock it into supplying LNG from a single nominated port and it was looking at Queensland and South Australian based options as well as the possibility of a co-operative agreement with one of the many Gladstone LNG projects in Queensland.
Icon managing director Ray James said the deal coincided with one of the largest drilling programmes in the company s history.
We will commence drilling in the Surat basin ATP 626P tenement in mid-April this year, he said.
Following our operations in the Surat basin, where we have a contract to drill up to five wells, we will be looking to commence drilling in the Cooper-Eromanga basin ATP 855P tenement around June or July and thereafter in our Gippsland PEP 170 tenement.
However he added that the recent Queensland floods were still affecting the company s operations in the Cooper-Eromanga basin.
Icon said that Shantou SinoEnergy had entered into a joint venture agreement with state-run China Guodian to build a proposed LNG receiving terminal, on Nanao Island off Shantou, which would be capable of loading and off-loading and re-gassing more than 139 billion cubic feet of gas per year.
The proposed receiving terminal would receive LNG supplied by Icon Energy and facilitate the distribution of gas to commercial and residential customers in the Shantou City area, James added.
