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West Erregulla field development a step closer

8th October 2020

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – ASX-listed Strike Energy and its joint venture (JV) partner Warrego Energy have inked a binding heads of agreement (HoA) for the joint development of the West Erregulla gasfield, in the Perth basin.

The HoA provides a pathway for the Phase 1 development of the project, including gas processing and plant capacity, gas balancing and sales, and optimisation of timing and alignment of critical activities including a final investment decision and the current appraisal of drilling campaign.

The Phase 1 development of West Erregulla is subject to the final investment decision being taken by the end of the first quarter of next year, as well as the completion of definitive documentation for the gas process arrangements, and completion of limited due diligence.

“This agreement with our JV partner provides greater certainty for the Phase 1 project development. Generating a fully aligned way forward will ultimately lead to a more competitive outcome across all facets of the project,” said Strike MD and CEO Stuart Nicholls.

The JV parties have also agreed to increase the Phase 1 capacity to 80 TJ/d delivered to the Dampier-to-Bunbury natural gas pipeline, with the Australian Gas Infrastructure Group remaining the preferred proponent to build, own and operate the facility.

A supplementary front-end engineering design study for the larger capacity plant is expected by the end of 2022.

The JV partners were planning to seek financing for the construction of the Phase 1 development on a coordinated basis, with the target date for first gas sales from West Erregulla remaining mid-2022.

Furthermore, the two companies have also struck a gas balancing arrangement to align their interest in the total contracted volumes and contract start dates for each foundation gas sales agreement. This will ensure the seamless delivery of gas sales to foundation customers, and will enable the JV to sell uncontracted gas on an equal basis.

Edited by Creamer Media Reporter

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