How Central Petroleum’s 1.3 PJ Gas Deal Secures Future Cash Flow
Central Petroleum has secured a new 1.3 petajoule gas supply agreement with McArthur River Mining, enhancing cash flow certainty through fixed pricing and take-or-pay terms.
- New 1.3 PJ firm gas supply agreement with McArthur River Mining
- Contract spans 2026 and 2027 with fixed price and take-or-pay provisions
- Agreement complements existing Mereenie JV gas supply arrangements totaling up to 4.9 PJ
- Leverages proven Amadeus Basin reserves to meet market demand amid uncertainty
- Strengthens Central Petroleum’s cash flow visibility and commercial position
New Gas Supply Agreement Secures Future Revenue
Central Petroleum Limited (ASX – CTP) has announced a significant new gas supply agreement with McArthur River Mining Pty Ltd (MRM), committing to deliver 1.3 petajoules (PJ) of firm gas over the 2026 and 2027 calendar years. This contract, commencing 31 December 2025, features take-or-pay provisions and a fixed price, providing Central with enhanced cash flow certainty in an otherwise volatile energy market.
The agreement is a strategic extension of Central’s existing gas supply portfolio, which includes arrangements with other participants in the Mereenie Joint Venture (JV). Combined, these contracts will see up to 4.9 PJ of firm gas supplied from the Mereenie gas fields, underscoring Central’s role as a reliable supplier leveraging its substantial Amadeus Basin reserves.
Market Context and Strategic Implications
Leon Devaney, Central’s Managing Director and CEO, highlighted the attractiveness of gas sourced from the Amadeus Basin, citing its reliability and backing by proven reserves. In a market marked by significant uncertainty, such firm supply agreements with fixed pricing provide valuable stability for both Central and its customers.
This new contract not only secures revenue streams for the next two years but also supports ongoing commercial discussions and potential portfolio enhancements. Central is actively exploring further opportunities, including the potential sale of gas from proposed new wells under long-term arrangements, signaling a forward-looking growth strategy.
Broader Company Positioning
Central Petroleum continues to position itself as a key energy supplier in the Northern Territory, with a focus on expanding its footprint in domestic gas markets. The company’s extensive exploration and appraisal permits across the Amadeus Basin, including some of Australia’s largest onshore conventional gas prospects, underpin its growth ambitions.
With this latest agreement, Central strengthens its financial outlook and market presence, reinforcing confidence among investors and stakeholders as it navigates the evolving energy landscape.
Bottom Line?
This firm gas supply deal marks a pivotal step in Central Petroleum’s journey toward stable cash flows and strategic growth.
Questions in the middle?
- What are the specific financial terms and pricing details of the new gas supply agreement?
- How will this contract impact Central Petroleum’s production volumes and operational plans?
- What progress is being made on the proposed new wells and potential additional gas sales?
