South Erregulla Foundation

Source: www.gulfoilandgas.com 11/17/2023, Location: Not categorized

Gas Sales
• Strike has secured foundation firm gas sales agreements for a total of ~42 PJ covering ~60% of estimated daily production which will underpin the bankability and development of the proposed 100% owned and operated South Erregulla 40 TJ/day Phase 1 development in the Perth Basin.
• The firm Gas Sales Agreements are with tier-1 customers and include:
o A sales agreement for 35.5 PJ of gas to the Worsley Alumina Joint Venture (operated by South32) for a period of 5 years.
o A sales agreement for 5.475 PJ of gas to Perth Energy (AGL) for a period of 3 years.

Strike Energy Limited is pleased to announce that it has secured the foundation gas sales agreements to underpin the bankability of the proposed 100% owned and operated South Erregulla 40 TJ/day Phase 1 development in Production License - L24.

The two Gas Sales Agreements cover ~42 PJ of gas and ~60% 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 Gas Sales Agreement with the Worsley Alumina Joint Venture (operated by a subsidiary of South32 Limited) for a total of 36.5 PJ of gas (at 20 TJ/day) on a firm take or pay basis for a period of 5 years. The gas price is Australian dollar denominated and escalated at Perth-CPI. The Worsley Alumina Joint Venture operates an established alumina production business in Western Australia and this arrangement will assist the Worsley Alumina Joint Venture to reduce its operational (Scope 1) emissions of greenhouse gas as it transitions its boiler fuel source from coal to gas.
• A medium-term Gas Sales Agreement with Perth Energy Pty Ltd (a wholly owned subsidiary of AGL Energy Limited) (Perth Energy) which supersedes and replaces the previous agreement announced on 6 April 2022. This new arrangement is for a total of 5.75 PJ of gas (at 5 TJ/day) on a firm take or pay basis for a period of 3 years. The gas price is Australian dollar denominated and escalated in line with Perth-CPI. Perth Energy (AGL) is an established and growing power generator and retailer in WA where Strike’s gas sales to Perth Energy will support future electrification.

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. 1

Strike’s Managing Director & Chief Executive Officer, Stuart Nicholls said:
“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.

“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.”

This announcement is authorised for release by the Managing Director and Chief Executive Officer in accordance with the Company’s Continuous Disclosure Policy.


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