Origin Energy (ASX: ORG) announced today that it will buy up to 432 petajoules of natural gas from joint venture partners ESSO Australia's and BHP Billiton's (ASX: BHP) processing plant in Victoria.
Starting in 2014, the contract will supply Origin with gas energy for the next nine years, enabling the company to keep up with regional markets. "The demand outlook for natural gas on Australia's east coast remains robust and this substantial volume of gas secured from two of the country's premier suppliers allows Origin to sell long term contracts to meet customers' needs," said Origin Energy Markets CEO Frank Calabria in a statement today. Coinciding with a recent purchase agreement from Beach Energy (ASX: BPT), Origin is now better positioned than ever before to push gas along its transmission lines to wherever it's needed most.
While Calabria was congratulatory of his company's latest move, he made sure to assure investors organic growth is still on the table. Origin's Ironbark CSF project in Queensland as well as a conventional gas project in Victoria provide the company with its own means of maximizing margins.
While gas is getting guzzled, limited oil supply and growing demand mean oil prices are likely to rise over time. Position yourself to profit from this trend now, with The Motley Fool's brand-new FREE research report, "3 Oil Stocks to Send Your Portfolio Gushing Higher".
More reading
- 4 reasons to add Origin to your watchlist
- Could an LNG glut wipe out Aussie producers like Origin and Santos?
Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.
