Magellan Petroleum Corporation (Magellan) announces that, on 12 September 2013, it has signed a gas supply and purchase agreement (the "Dingo GSPA") with Northern Territory Power and Water Corporation (PWC) for the long-term sale of gas from the Company's Dingo gas field. Pursuant to the Dingo GSPA, Magellan has contracted to supply up to 850 bcm of gas to PWC on a 100% take-or-pay basis over a 20‑year supply period. The Company's supply obligation is expected to begin in early calendar year 2015 at a fixed price escalating with Australian CPI.
Magellan is currently undertaking the front-end engineering and design that is expected to take around 6 months to complete. Gas is expected to be produced from three wells drilled at Dingo in the 1980s and 1990s, two of which have since been temporarily shut-in. Concurrently with the FEED work, the company will be applying for various regulatory approvals necessary for constructing the Dingo facilities and pipeline and commissioning Dingo for commercial gas production. The Company expects to receive all approvals by the summer of 2014 and intends to begin construction of the pipeline and facilities immediately thereafter. The Dingo GSPA is subject to Magellan to obtain all regulatory approvals and constructing facilities necessary for commissioning the Dingo field for commercial gas production.