Under the contract, Origin will supply between 11 and 13 petajoules (PJ) of gas per annum from late 2006, with the total contract equalling180 PJ.

The contract could also be considered as another nail in the PNG pipeline coffin as the project has failed to secure enough foundation contracts to justify construction.

With a limited number of sizeable industrial contracts available in Queensland losing out to the burgeoning CBM market could be the final straw.

Origin Energy's managing director, Grant King said, "Origin has been supplying gas to QAL since the late 1980s through its Denison Trough operations, and we are particularly pleased to see this relationship extended beyond 2020 with new supplies coming from our CBM assets.

"The company currently carries over 900 PJ of proved and probable CBM reserves across four fields in Queensland and even with this agreement less than half of these reserves are committed to long-term contracts.

"Origin will continue to market CBM to a variety of customers in Queensland and south east Australia, assisted by our unique position as a producer, aggregator and energy retailer," King said.