Comet Ridge (ASX:COI) has executed a 7-year gas sales agreement with CleanCo Queensland, subject to approval from the Queensland Government.
This is Comet Ridge’s first gas sales agreement and is considered a ‘significant milestone’ for the $156.60 million market capitalisation company as it transitions from a gas project developer to a producer.
Both companies have agreed for supply to begin in a 12-month window between 1 July 2025 and 30 June 2026, which will allow Comet Ridge flexibility ahead of a final investment decision (FID) for its Mahalo Gas Hub projects.
The natural gas supplied will be produced from the Mahalo Gas Hub in central Queensland, from where CleanCo will offtake 3 PJ per annum of natural gas.
CleanCo has the option to reduce the agreement to 5 years, and both parties have the option to agree to extend the agreement for up to a further 5 years.
Comet Ridge is to make monthly repayments during the agreement term to account for previous investments made in Comet Ridge and the Mahalo Joint Venture by electricity producer Stanwell prior to the arrangement being assigned to CleanCo.
Addressing the sales agreement, Comet Ridge Managing Director Tor McCaul says: “We know that East Coast Australia needs more gas for decades to support consumers and jobs in vital industries, as well as to partner with renewables as we transition to net zero.
“Comet Ridge is very pleased to be working with CleanCo to bring a new source of energy to Queensland that will make a valuable contribution to energy security…”
Comet Ridge is very pleased to be working with CleanCo to bring a new source of energy to Queensland that will make a valuable contribution to energy security, and to enable CleanCo to manage its overall energy mix to minimise its carbon emissions.”
CleanCo was established by the Queensland Government in 2018. The company’s mission is to transition Queensland to clean energy while driving regional growth and jobs.
Comet Ridge is an ASX-listed energy company focused on the development of natural gas resources for the strained East Coast Australian market. As of 30 June 2023, the company had $11.7 million cash at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Comet Ridge