COAL seam gas company Metgasco has entered its first gas-supply agreement with a North Coast business.
Richmond Dairies entered into the 10-year agreement subject to Metgasco obtaining a licence to produce coal seam gas and receiving approval to install gas-supply infrastructure at Richmond Dairies' Casino factory.
Richmond Dairies managing director Chris Sharpe said the deal gave the company certainty in the face of rising electricity and liquid-natural-gas prices.
He also said the deal removed the relative cost-disadvantage of the local dairy processing sector with their Victorian competitors.
"The dairy industry in Northern NSW is already facing difficulty competing with other regions, and disparity in energy costs is one burden," Mr Sharpe said.
"This new deal with Metgasco gives us access to energy at prices consistent with Victorian processors.
"We also think using (coal seam gas) rather than liquid natural gas will reduce our factory's greenhouse emissions and also the secondary emissions from transporting liquid natural gas to Casino."
But Mr Sharpe was keen to point out that he supports appropriate "checks and balances" being put in place to regulate the coal seam gas industry.
"We are supportive of that and the community has to be satisfied all these things are in place," he said.
Richmond Dairies employs about 55 people and specialises in the export of frozen cream, milk powders and bulk dairy ingredients mostly to South-East Asia and Saudi Arabia.
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