Tamboran Resources Corporation (ASX:TBN) has entered into a non-binding Letter of Intent (LOI) with a subsidiary of Arafura Rare Earths Limited (ASX: ARU) to explore a potential gas supply agreement.
This partnership aims to support Arafura’s Nolans Rare Earth Project in the Northern Territory, a venture of national strategic importance.
Under the LOI, Tamboran will supply 18 to 25 terajoules per day (TJ/d) (~18–26 MMcf/d) of natural gas from its Beetaloo Basin assets for up to 10 years.
Arafura’s Nolans Rare Earth Project, located 650 kilometres south of the Beetaloo Basin, includes a downstream rare earth processing facility adjacent to the Amadeus Gas Pipeline (AGP).
The two companies will work collaboratively to finalise a full-term agreement and definitive documentation.
Joel Riddle, Managing Director and CEO of Tamboran Resources, highlighted the importance of the partnership in fostering economic development in the Northern Territory.
He stated: “Tamboran’s LOI with Arafura demonstrates our company’s ongoing commitment to support jobs and industry within the Northern Territory.
“Arafura’s operations require reliable and affordable gas volumes to operate their rare earths project, which is of national strategic importance.”
The Nolans Rare Earth Project has secured over $1 billion in debt financing from nine export credit agencies and commercial lenders, along with a $200 million investment from Australia’s National Reconstruction Fund Corporation.
This underscores its critical role in producing rare earth materials vital for high-performance magnets used in renewable energy technologies and electric vehicles.
The deal comes as Arafura seeks alternative energy sources following the expiration of a prior agreement with the Mereenie Field joint venture.
The stability provided by this new partnership is expected to strengthen Arafura’s position in the global rare earths market while enabling Tamboran to advance its Beetaloo Basin development.
Both companies are optimistic about building a long-term relationship that aligns with Australia’s strategic goals for resource security and industrial growth.
