Talon Energy Ltd and Strike Energy Limited, EP447 Joint Venture (JV), have inked a long-term Gas Supply Agreement (GSA) with Santos-WA Limited.
Talon and JV partner STX have entered into a long-term gas supply deal with Santos to supply a minimum of 36.5 PJ of gas from the Walyering gas field on a fixed basis, with an expected start date of Q1 2023. The contract comprises firm gas volumes negotiated on a “take or pay” basis and “as available” gas volumes that allow the JV to contribute extra production into the contract when the field ramps up to its maximum production potential.
Santos has a well-established domestic gas portfolio in Western Australia, and this collaboration allows the JV to deliver Walyering’s gas output to the market quickly and on favourable terms. The agreement is in US dollars and is tied to increases in the US Consumer Price Index.
According to Santos Managing Director and Chief Executive Officer Kevin Gallagher, Santos continues to assist the Western Australian industry by supplying domestic natural gas at a reasonable price.
“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,” Gallagher said.
The gas supplied under the contract will be derived from the Walyering gas field (EP447), where the JV is developing a low-cost gas processing facility and accompanying infrastructure, with gas production being transferred into the Parmelia Gas Pipeline.
Talon CEO and Managing Director Colby Hauser said the inking of the GSA with Santos is a watershed moment for Talon and the EP447 JV; with the GSA now in place, the focus of activities at Walyering will shift to the upcoming construction and commissioning phase of the development, followed by strong cash flow 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,” Hauser stated.
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