PERTH (miningweekly.com) – The joint venture (JV) partners in the Waitsia gas project, in Western Australia, have signed a nonbinding term sheet with AGL Wholesale Gas (AGL) for the first gas from the Stage 2 Waitsia project.
ASX-listed AWE on Monday said the term sheet set out the commercial terms for the sale of 15 TJ/d, or 5.5 PJ/y, of gas to AGL from the Stage 2 project. This equated to 15% of the Stage 2 nominal daily production capacity and was a material contribution towards underwriting the project.
AWE MD and CEO David Biggs said the term sheet was a significant step in the development of the Stage 2 project, adding that AGL was one of Australia’s leading integrated energy companies.
“We are aiming to finalise the gas sales agreement with AGL by mid-2017 and we anticipate completing term sheets with other customers over the coming months,” he noted.
“The agreement with AGL reflects the growing demand for onshore gas and highlights the benefits that a new supplier can bring to the market in terms of diversity, lower risk and certainty of supply.”
The Waitsia Stage 2 project is currently in pre-front end engineering and design (pre-FEED) stage, and is on track to enter FEED stage in the June quarter. AWE and its JV partner Origin Energy are targeting a final investment decision on Waitsia Stage 2 by the end of this year.
The Stage 2 development could supply 10%, or some 100 TJ/d, of Western Australia’s domestic gas demand for ten years.
First gas from Stage 2 is being targeted for 2020.