Strike Energy has announced its decision to sanction the South Erregulla peaking gas power plant development.
Strike’s CEO and managing director Stuart Nicholls said the decision marks the second leg in Strike’s Perth Basin Gas Acceleration Strategy and the beginning of a new and highly attractive integration into peaking power.
“The integration of South Erregulla’s gas reserves into peaking gas power generation takes advantage of the proximal metro electricity transmission infrastructure to the gas field and the incremental value that integrated gas to power projects can generate from the spark-spread during short term power prices coinciding with lower renewable generation,” he said.
“WA’s electricity generation is in a state of transition from relying on its aging coal fired power units to incorporate increasing amounts of renewable energy.
“Strike’s peaking gas power station is a highly complementary facility with the ability to firm these renewables and support the State in this transition whilst underwriting the reliability of the state’s primary grid.”
The fully integrated South Erregulla peaking gas power station is designed to deliver 85MW of firming power into the South West Interconnected System via a connection to the existing 132kVa line between Geraldton and Three Springs.
The project will be constructed on the 3500ha strategic land holding known as the Precinct, which sits above the South Erregulla gas field and on Production License L24, all of which are 100 per cent owned by Strike.
The project has been awarded reserve capacity credits commencing in the 2026-27 year and network access quantity in order to deliver energy into the grid.
The cost to complete and commission the Project is estimated at $137m, which includes a contingency allowance of 10 percent.
Commissioning of the plant is to be completed prior to October 2026 in order to commence energy sales in the 2026-27 capacity year.
The construction of the project will be funded by Strike’s recently announced and increased $217m financing package with Macquarie Bank Limited5 and the free cash flow generation from Strike’s producing Walyering gas project.
Over the first five years, the power station is expected to generate $50-55m per annum of revenue based on energy and capacity price forecasts from Strike’s independent consultants.
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