Warrego commits to long term leads for West Erregulla
Sydney-listed Warrego Energy has started payments to the Australian Gas Infrastructure Group (AGIG) to commit long lead items (LLIs) to construct the 87 terjoules/d gas processing facility for Phase 1 of the West Erregulla gas project, it said on July 5.
Under the arrangements, Warrego will make further payments to AGIG to commit to all necessary LLIs before project finance becomes available. Warrego secured funding for its 50% share of up to A$31.5mn ($23.7mn) of LLIs via a A$50mn placement undertaken in June 2021.
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The West Erregulla gas project is located in the onshore Perth basin in Western Australia, in EP469. Strike Energy is the operator with 50% interest while Warrego has the remaining 50%.
Payments associated with the LLIs will form part of the overall gas processing plant development and will be refunded back to Warrego once the full project development agreement with AGIG is in place and project finance is available.
“Committing to LLIs now will enable Phase 1 of the project to maintain its targeted first gas date in mid-2023,” said Warrego’s CEO David Biggs.
He added that the company is entering a period of high activity at West Erregulla with flow testing of WE-4 underway, followed by the testing of WE-5, reserves certification, a gas processing agreement, permitting and project finance.
“By committing to the LLIs we will further de-risk the project and facilitate a smooth start to construction post necessary project approvals,” he said.