Warrego, Alcoa Sign Oz Gas Deal

Sydney-listed Warrego Energy has signed a binding gas sales agreement (GSA) with Alcoa of Australia for the long-term supply of 155 petajoules (PJ) of gas from the West Erregulla field in Western Australia, it said on September 28.

The contract will come into force on January 1 2024, pending a final investment decision (FID) being taken on West Erregulla by Warrego. The company expects to take this step in the first half of 2021.

“The significant size and term of the foundation GSA with Alcoa is such that Warrego does not need to secure additional GSAs to support the FID. This foundation load will underpin a gas processing development and provide the foundation for Warrego to plan additional phases of development,” it said.

However, Warrego intends to expand its gas sale portfolio and is continuing to negotiate with other potential customers. In addition, the company said it will continue to progress gas processing options which include the use of third-party facilities and shared infrastructure.

“We are well advanced in progressing gas processing options, which include third party processing and shared infrastructure, with a view to selecting our preferred option later this year. No further GSAs are required in order for Warrego to commit to bringing the field into production,” Warrego’s managing director Dennis Donald said.

In May, West Erregulla gas project was awarded lead agency status in Western Australia. Lead agency status is awarded to resource and infrastructure projects where the proposed investment is significant or of strategic importance to the state. Warrego is partnered at West Erregulla with fellow Australian explorer Strike Energy in a 50:50 equity split.