Joint Venture (JV) partners, Talon (45%) and Strike Energy Limited (55% and Operator), have entered into a long-term Gas Supply Agreement (GSA) with Santos-WA Limited.
In accordance with the agreement, the JV partners will supply a minimum of 36.5 PJ of gas from the Walyering gas field on a firm basis, targeting commencement from the first quarter of 2023, for five years.
The contract includes tranches of firm gas volumes, which are contracted on a “take or pay” basis, and “as available” gas volumes, which provides the JV with the flexibility to supply additional production into the contract as the field ramps up towards its maximum production capacity.
Santos has an established domestic sales gas portfolio in Western Australia and this collaboration enables the JV to bring Walyering’s gas production to market in a timely manner, and on attractive terms.
The gas supplied under the contract will be sourced from the Walyering gas field (EP447), where the JV is constructing a low-cost gas processing facility and associated infrastructure, with gas production being delivered into the Parmelia Gas Pipeline.
Talon’s Chief Executive Officer & Managing Director Colby Hauser said the agreement is a momentous moment for Talon and the EP447 JV.
“With the GSA now finalised the focus of activities at Walyering will be on the imminent construction and commissioning phase of Walyering’s development, followed soon after by strong cash flows underpinned by this agreement.
“The firm pricing secured in the GSA provides a high degree of certainty with respect to future gas sales income for Talon, and in conjunction with our recent capital raise, provides the Company with a strong foundation for its future project development and growth”.
The agreement is facilitated by Santos’ existing customer relationships and pipeline transport positions, with gas to be delivered into Santos’ WA domestic sales gas portfolio.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said Santos continues to support Western Australian industry through the delivery of competitively priced domestic natural gas.
“We are delighted to sign this agreement with the Walyering joint venture and bring this gas to market in a timely manner, reinforcing our position as WA’s biggest supplier of domestic gas,” Mr Gallagher said.
