PERTH (miningweekly.com) – Independent oil and gas company Strike Energy has struck a new gas sales agreement with Orica International to supply up to 64 PJ of gas from the Southern Cooper Basin gas project.
The new gas sales agreement replaces a 2014 agreement for the supply of up to 250 PJ of gas, with the gas to be supplied post ramp-up at a rate of 6.4 PJ a year, at an improved price.
“The renegotiation and signing of this new agreement with our foundation customer is a clear indication that Strike is delivering against its revised strategy released on June 1, and progressing towards commercial development of the Southern Cooper Basin gas project,” Strike MD Stuart Nicholls said on Friday.
“The renegotiation of the offtake agreement is evidence that the external environment is changing dramatically around Strike and that forward gas demand continues to grow with supply tightening.
“The development of the Southern Cooper Basin gas project will provide a critical supply of gas into the East Coast market at a time of significant need,” Nicholls said.
Strike holds five permits, covering 9 200 km2 in the Cooper basin, with the company targeting commercial gas flows in 2018.
Meanwhile, as part of the gas sales agreement renegotiation, an existing loan agreement with Orica has also been varied to extend the repayment date of the A$2.5-million loan from July 2018 to December 2021, to accrue interest on the loan from 2018, and to provide Orica with the right to convert the loan into Strike shares any time after September 1, 2018, until the maturity date.