Orica signs major gas deal with Esso and BHP

Orica has a signed a three-year sale deal with BHP Billiton and Esso Australia Resources which will see it purchase up to 42 petajoules of natural gas over three years.

Esso and BHP will jointly supply gas to Orica for the first time from Langford in Victoria.

The arrangement is set to meet Orica’s total gas requirement for its Kooragang Island manufacturing plant in New South Wales.

Orica said the agreement supports its “forward-looking Australian east-coast gas supply strategy”.

“This important agreement with ESSO/BHP Billtion gives Orica security of gas supply to the end of the decade for our Kooragang Island manufacturing facility from a highly reliable supplier,” Orica managing director and CEO Ian Smith said.

The company said discussions were also underway with numerous parties regarding the supply of 3.5PJ per annum to Orica’s Yarwun facility in Queensland.

The announcement comes after Orica posted a net profit of $602 million for the 2013 FY, a jump of nearly 49% year on year.

The net profit after tax and individually material items is up $199 million compared to the same time last year, when it earned $403 million.

However, before individually material items the explosives manufacturer and mining services company was down compared to the previous corresponding period, when it recorded an NPAT of $650 million.

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