Strike Energy has secured firm gas sales agreements for a total of 42 petajoules (PJ) covering 60 per cent of estimated daily production.
This will underpin the bankability and development of the proposed 100 per cent owned and operated South Erregulla 40 terajoules (TJ) per day Phase 1 development in the Perth Basin, Western Australia (WA).
“The agreements with the Worsley Alumina Joint Venture and Perth Energy provide a commercially attractive route for Strike to sell its South Erregulla gas stream in a strong pricing environment that supports the bankability of the project,” said Strike managing director and chief executive officer Stuart Nicholls.
“The sale of this gas into the state’s electricity and mineral refining markets continues to demonstrate Strike’s commitment to supporting the energy transition of Western Australia from coal through the provision of domestic gas from the Perth Basin.”
The two gas sales agreements (GSA) cover 42 PJ of gas and 60 per cent of the estimated daily production capacity of the development, which is in line with Strike’s gas marketing strategy to retain a portion of the production for short term marketing once nearing start-up.
The two foundation contracts are secured with tier-1 customers and include a long-term GSA with the Worsley Alumina Joint Venture on a firm take or pay basis for a period of five years as well as a medium-term GSA with Perth Energy.
In both cases the gas supply is proposed from the Phase 1 development of the South Erregulla gas field in L24 and are conditional upon Strike taking an unconditional final investment decision on Phase 1 of the South Erregulla Project.