Approximately 42 per cent of that gas will come from the Maui field's P85** gas volumes, with the remaining 58 per cent from the P50* gas volumes - which is contingent on this reserve being firmed to P85 status.
Contact Energy Chief Executive, David Baldwin, said the new contracts confirmed Contact's increased confidence in its short to medium-term gas outlook.
He said the terms relating to price and flexibility of the gas supply arrangement over the first three years reflected the current market conditions of oversupply in the shortterm.
Mr. Baldwin said Contact had, in conjunction with the purchase, arranged to sell around seven petajoules per annum from October 2007 until mid 2010 to a large wholesale gas customer. Contact has also agreed to a short-term sale to another wholesale customer.
Mr. Baldwin said Contact was reasonably confident that most, if not all, of its rights to the Maui P50 gas would be realized. The terms and conditions of this tranche of gas are consistent with recent long-term gas deals in the New Zealand market.
"This additional gas is a significant volume which will go a long way towards securing a stable fuel supply for our existing natural gas-fired assets into the middle of next decade," he said.
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