Australia's Strike Energy pens gas sales agreements for South Erregulla project

ASX-listed Strike Energy has signed gas sales agreements with South32's Worsley Alumina joint venture and AGL's Perth Energy, it said on November 17. The gas will be supplied from phase one of the South Erregulla project in Western Australia's Perth Basin.

South32's Worsley Alumina JV will receive 35.5 PJ of gas over a five-year period, while AGL's Perth Energy will receive 5.475 PJ over a three-year period. The two gas sales agreements cover approximately 42 PJ of gas and represent 60% of the estimated daily production capacity of the development. This aligns with Strike's gas marketing strategy to retain a portion of the production for short-term marketing once nearing start-up.

"The agreements with the Worsley Alumina joint enture 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," said Strike Energy CEO Stuart Nicholls.

The South Erregulla gas field development is part of Strike Energy's government-endorsed gas acceleration and development strategy which aims to provide incremental gas supply into a tightening Western Australian market. 

Strike earlier this year launched its gas acceleration strategy post-receipt of A$136mn ($92mn) in proceeds from the sale of its Warrego Energy shares. The company is targeting up to four sources of gas production - Walyering, Ocean Hill, and the South and West Erregulla gas fields - to come online by the end of 2025, commencing with Walyering.