Gastar Exploration, with its joint venture partner Eastern Star Gas, has entered into a memorandum of understanding with Babcock & Brown to supply gas from two concessions in Australia's Gunnedah basin in New South Wales for use in the generation of electricity.
The agreement envisions the supply of up to 38 billion cubic feet per year of gas from the Gunnedah gas project for use in a gas-fueled power station to be developed by Babcock & Brown in northern New South Wales. Gas sales under the anticipated agreements could be expanded to meet requirements for power station developments at other locations.
Russell Porter, chairman, president and CEO Gastar, said: The Babcock & Brown memorandum of understanding represents another major step forward for the Gunnedah gas project and the early commercialization of gas production on PEL 238, leading in turn to significant regional benefits and the emergence of the Gunnedah basin gas project as New South Wales’s major indigenous source of natural gas.
The PEL 238 and PEL 433 projects are well suited to supply gas to meet market requirements that are growing rapidly in New South Wales. The Babcock & Brown memorandum of understanding provides that power station and gas field development will proceed in parallel.
Gastar owns 35% of the Gunnedah gas project, while Eastern Star Gas holds the remaining 65% stake.