Tamboran pens gas supply pact with Northern Territory government

Tamboran Resources and its Beetaloo joint venture partners have inked a deal with the Northern Territory government to supply 40 TJ/day of gas from the proposed Shenandoah South pilot project, the company said on April 23.

This agreement spans an initial term of nine years, with an option for the buyer to extend it for an additional six-and-a-half years, potentially until 2042. The volume covered in the deal is approximately two-thirds of the Northern Territory's current gas needs, according to Tamboran.

Under the terms, gas will be transported via the APA-owned Amadeus gas pipeline on a take-or-pay basis, with pricing set at a "market-competitive" level, subject to escalation at 100% of the consumer price index. The buyer's extension option includes a slightly discounted price.

However, this binding commitment is contingent upon several factors, including the joint venture securing agreements for gas transportation and processing infrastructure, reaching a final investment decision (FID), and obtaining necessary regulatory and stakeholder approvals.

Tamboran aims to target FID for the Shenandoah South pilot project by mid-2024, with initial production slated for the first half of 2026. The company holds a 47.5% working interest in the 51,200-acre area designated for the project, which will encompass the wells necessary to meet the proposed pilot project's production volumes.

CEO Joel Riddle described this development as "transformational" for Tamboran and its partners, marking a significant milestone after a decade of investment and exploration efforts in the Beetaloo region. The revenue generated from gas sales under this agreement is expected to support future development phases, including supplying the East Coast gas market.

Last month, Tamboran increased its working interest in the Shenandoah South pilot project after Falcon Oil & Gas chose to limit its participation to 5% in the joint venture's second Shenandoah South well pad (SS2) and the two wells in the 2024 drilling programme.

Tamboran recently completed its re-domiciliation from Australia to the US. This process involved transferring all ordinary shares to a newly formed corporation, Tamboran US HoldCo, based in Delaware, which now serves as the parent company of the entire Tamboran Group.