Empire Energy secures 10-year gas sales agreement with NT government to supply 25 TJ per day
Published: 20:40 25 Jul 2024 EDT
Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) has locked in a binding, 10-year gas sales agreement with the Northern Territory Government to supply 25 terajoules (TJ) of gas per day from the Carpentaria Pilot Project in the Beetaloo Basin.
The long-term gas agreement covers up to 25 TJ of gas per day for 10 years (about 75 petajoules total) from Empires’ Beetaloo Basin properties, beginning in 2025.
The agreement includes an option for an additional 10 TJ+ per day for up to 10 years if production levels from the Carpentaria project exceed 100 TJ per day.
Secure energy supply for the NT
"Empire has been actively pursuing production from the Beetaloo Basin since 2011, with strong support from the NT Government for this objective since 2018,” Empire Energy managing director Alex Underwood said.
“Subject to final approvals, we anticipate being the first company to provide gas supply from the Beetaloo, commencing next year.
“This agreement comes at a critical time for the energy security of the NT. It demonstrates our commitment to providing energy for Territorians and will facilitate hundreds of millions of dollars of investment into the NT economy.
“The project will provide local jobs, support NT businesses, and create direct revenue streams for traditional owners and the NT Government.
“We look forward to working with traditional owners, local communities and all Territorians to deliver this exciting project.”
The volume supplied under the agreement is limited to 10% of the total production from Carpentia, should the project reach 100 TJ per day – that level of production would require additional pipeline capacity to be developed.
Details of the supply agreement
Under the agreement, the gas will be delivered to the Power and Water Corporation (PWC) operated McArthur River Gas (MRG) pipeline on an ex-field take-or-pay basis at market-competitive gas prices, escalating at 100% of the Consumer Price Index.
The option supply (contingent on 100 TJ production per day) will be offloaded at a slightly lower price than the initial supply.
EEG says a T-piece connection has already been installed into the MRP by PWC at the proposed location of the Carpentaria Gas Plant to allow gas delivery.
The binding gas sales agreement is conditional on several points as is customary for these sorts of agreements, including a final investment decision for Carpentaria and various NT regulatory approvals, which Empire says are well advanced.
The company holds a 100% interest in Carpentaria’s licence, EP187, and intends to begin gas sales from the project in mid-2025.
