Lucapa secures gas source for Merlin

20th February 2023 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH ( – Diamond miner Lucapa Diamond Company has struck a gas supply heads of agreement (HoA) with ASX-listed Armour Energy for its Merlin diamond project, in the Northern Territory.

Armour Energy on Monday said that the HoA contemplates the sale of gas produced from Armour’s Glyde Field discovery, in the McArthur basin, from production start, which is expected in mid-2025, for a period of 14 years through to the end of 2039.

It is expected that a minimum of 7 PJ of gross gas would be delivered over the contract term.

“This HoA with Lucapa represents a significant opportunity to further appraise, develop and commercialise the Glyde gas discovery in the Northern Territory. Recent technical work performed by Armour and SLB (Schlumberger) has validated the producibility of the existing well and plans are underway to reassess the resource potential and development feasibility,” said Armour CEO Christian Lange.

"The agreement underpins the accelerated pathway to commercialisation of this shallow, conventional gas asset and reinforces the exciting conventional and unconventional hydrocarbon potential of the McArthur basin in the Northern Territory and our ability to provide this valuable resource to the domestic market and represent first production from the basin.”

Lucapa is undertaking a feasibility study at the Merlin project, which contains 11 previously discovered kimberlite pipes, of which eight previously produced 500 000 ct from 2.2-million tonnes of ore. Australia’s largest diamond, a 104 ct white diamond, was discovered at the mine.