Sydney, Nov 15, 2005 AEST (ABN Newswire) - The Australian Gas Light Company (ASX: AGL) today completed the acquisition of a 50 per cent interest in the production leases and exploration licences of Sydney Gas Limited (SGL) as part of a previously-announced joint venture agreement.
Under the agreement, AGL has paid $42.25 million to acquire a half share in the leases and exploration licences, including the Camden Gas Project, which currently supplies over 3.5 petajoules of gas on an annualised basis to AGL's wholesale gas portfolio. If additional reserves are proven at Camden, AGL will pay an additional $51 million by December 2008 for its half-share based upon an agreed reserve formula with reserves verified by an independent external expert.
"AGL is pleased to announce the completion of this transaction which fits neatly with the company's existing NSW base as part of our growing wholesale gas business," AGL Managing Director Greg Martin said.
"Coal seam gas produced through this joint venture arrangement will help support gas-fired power generation initiatives in New South Wales such as the plans announced by AGL earlier today to develop a gas-fired power station project at a site south of Campbelltown1."
"AGL looks forward to working with Sydney Gas to optimise the development of the substantial coal seam gas reserves held within these joint venture licences and exploration leases which have considerable potential to provide competitively-priced gas to the Sydney, Newcastle and Wollongong markets," Mr Martin concluded.
Under the terms of a new 10-year Gas Sale Agreement with Sydney Gas, the Camden Gas Project is expected to supply up to 14.5 petajoules per year into AGL's wholesale gas portfolio.
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