Under the MoU the parties will commit, in the coming months, to progressing an initial gas sales agreement and development funding structures through term sheet and binding documentation phases.

It positions Orica to help Comet Ridge get Mahalo North up and running with initial gas supply to be scaled to meet Yarwun's needs as production expands across all Mahalo Gas Hub permits.

A key element in the development of Mahalo North - and a condition of the commercial arrangements with Orica - will be finalising infrastructure access to connect it to the Queensland Gas Pipeline.

Comet Ridge recently announced a MoU with Jemena that provides an option for a pipeline connection into the QGP as well as gas haulage arrangements via the QGP into Gladstone.

Orica has been a reliable buyer of natural gas in Queensland and New South Wales for its facilities at Yarwun and Kooragang Island near Newcastle.

Comet Ridge managing director Tor McCaul said the company had received a lot of interest for gas sales from its Mahalo Hub projects.

"We are very pleased to be forming this long-term relationship with a blue-chip gas buyer with a strong gas market reputation in Orica," he said.

"Orica's Yarwun project is close to the Mahalo Gas Hub and will operate well into the future, given the enormous need for manufacturing for the next several decades."