Nova joins Contact as long-term First Gas customer

Friday 26th July 2019

Todd Energy-owned Nova Energy has signed a supply deal to access gas at the First Gas Ahuroa storage facility, something fellow customer Contact Energy will welcome given its fee falls as other contracts are signed.

The 15-year contract begins in 2021 and will support Nova's 100 megawatt peaking power station near New Plymouth that is expected to open in mid-2020. Contact noted the contract in its June monthly operating statistics released today, and said Nova will be able to access the facility once it's fully upgraded early next year.

The Ahuroa facility's gas injection capacity is up to 27 terajoules per day and gas extraction capacity is up to 45 terajoules a day. First Gas plans to boost that to 65 terajoules a day for each.

Contact is contracted to use 75 percent of injection and extraction capacity, falling to 69 percent once capacity is expanded, and its annual fee will fall as more customers come on board.

First Gas said Nova will be able to access 20 TJ per day of injection and extraction capacity, and will be able to store up to 4.5 petajoules of gas in the Ahuroa reservoir.

"We purchased Ahuroa to grow its ability to support flexible, dispatchable electricity generation and to provide access to new customers. This contract delivers on both of those objectives," chief executive Paul Goodeve said in a statement.

Contact will remain a major user of Ahuroa with rights to use up to 45 TJ per day of injection and extraction capacity once the upgrade is completed.

"We see gas storage as playing a key role in the transition to a low carbon future," Contact chief generation and development officer James Kilty said.

Last month, Contact said it bought gas supply from OMV, giving it 40 TJ a day for the winter season and providing access to future supply from the Maui field between 2020 and 2024.

Contact shares increased by 0.6 percent to $8 in early trading, and have gained 36 percent so far this year.

(BusinessDesk)

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