Energy: Senex signs up CSR as a major customer for its domestic gas supplies
Energy company Senex (ASX: SXY) has a deal to sell gas to CSR (ASX: CSR), the ASX200 industrials conglomerate.
Under the terms of the contract, Senex will supply CSR with up to 3.25 petajoules (PJ) of gas over the next five years.
A joule is typically regarded as the prevailing definition for a unit of energy, in accordance with the International System of Units. A petajoule is one quadrillion of those.
Shares in Senex were up more than 3 per cent to 36.7 cents, still off the 12-month high of 53 cents reached last October.
While Senex has been making good money from its oil operations lately, this deal marks the company’s first contract to sell gas locally from its Project Atlas development in Queensland’s Surat Basin.
“This agreement with CSR follows the Queensland Government’s policy to support new supplies of natural gas into the domestic market, and this is a great outcome for Queensland,” Senex chief executive Ian Davies said.
The gas will be supplied via the Wallumbilla gas hub. CSR will use the gas at its three manufacturing plants in southeast Queensland, where it makes bricks, Gyprock, plasterboard and insulation products.
The first part of the deal will see CSR purchase 0.65PJ of gas per year for three years, starting on 1 January 2020. CSR then has an option to extend the agreement by another two years.
The price is fixed in line with current market levels, and will be indexed higher on an annual basis.
Davies said that as Senex brings more gas to market, it will continue to put a focus on sales opportunities in the domestic market.
“This agreement is one of many milestones to come as we deliver our east coast gas development projects,” Davies said.
Uranium company Peninsula Energy (ASX: PEN) has advised the market that the US Department of Commerce (DoC) has submitted its report into the effect of uranium imports on US national security. Peninsula has operations in the US state of Wyoming.
President Donald Trump now has 90 days to decide on what action, if any, should be taken. There’s no detail at this stage about what DoC recommendations were included in the report. Shares in PEN were unchanged at 27.5 cents.
And junior uranium player Toro Energy Limited (ASX: TOE) has completed a $275,000 capital raising to “advance technical studies” at its Wiluna uranium project in WA. The placement was issued to Hongmen Capital Holdings, Toro’s sixth largest shareholder, and another sophisticated investor.
Toro said it’s already sufficiently funded to continue exploration activities at Wiluna, but sees the additional investment as a “vote of confident” from its shareholder base. Toro shares were up four per cent at 2.5 cents — the level at which the raise was priced.