Strike Energy has converted a gas supply option with CSBP into a firm 100 petajoules (PJ) gas offtake agreement at 25 terajoules a day (TJ/day) over 11 years.
The agreement supports Strike’s proposed development of phase one of the West Erregulla project in the Perth Basin. It also supports the company’s strategy of rapid cashflow generation from the project to reduce costs of a phase two development.
Strike reported that the agreement had a narrowing window delivery mechanism for first supply that would allow it to deliver all of its volumes from day one, post commissioning.
With a firm offtake agreement with CSBP, a Tier 1 customer in Western Australia’s domestic gas market, Strike now has a solid platform to secure a high-quality financing solution for the construction phase of the project.
The offtake agreement is subject to a final investment decision (FID) on the West Erregulla project being taken, which would enable the delivery of 25 TJ/day to CSBP and is expected to commence in the first half of 2022.
Strike managing director and chief executive officer Stuart Nicholls said the conversion of the CSBP offtake option to a firm gas supply agreement was another important milestone for the company as it executed its Perth Basin development strategy.
“Delivery of gas into this contract will see Strike generating strong free cash flow from 2022 to support organic growth via development and exploration activities through our Perth Basin portfolio,” Nicholls said.
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