The Power and Water Corporation in the Northern Territory has signed a deal that will see it buy gas from a field near Alice Springs for the next two decades.

The 20-year deal has been signed by Territory officials to buy gas from the Magellan Petroleum Corporation’s Dingo Gas Field, located in the Amadeus Basin.

As of 2015, a significant 31 petajoules of gas will be shipped from the field along a pipeline (yet to be constructed) to meet the existing Amadeus-Darwin Gas Pipeline.

Industry insiders say NT’s Dingo Gas Field has never really reached its full potential. It was first discovered following surveys in 1981. Four wells were bored during the 1980s, but that was where development stopped.

Magellan is currently drawing gas from at least two of the wells, with others remaining closed. The US-based Magellan group also has projects in the Palm Valley Gas Field near of Alice Springs, the result of an asset swap with Santos in recent years.

Northern Territory Water and Power is expected to make comment on the deal when it is finalised later this week.