Tamboran Resources Corp. and the Beetaloo Joint Venture (BJV) have signed a binding long-term gas sales agreement (GSA) to supply the Northern Territory government with 40 terajoules per day from the proposed Shenandoah South Pilot Project.
The initial term of the GSA is nine years starting in the first half of 2026 for a total of 131.4 petajoules, or around 62.4 petajoules net to Tamboran, the company said in an announcement Tuesday on the Australian Securities Exchange.
The Northern Territory government has an option to extend the GSA for a further six-and-a-half years to 2042, Tamboran said, noting that the daily volume under the GSA represents approximately two-thirds of the Northern Territory’s current gas requirements.
The gas will be delivered to the APA-owned Amadeus Gas Pipeline (AGP) “on a take-or-pay basis at a market-competitive gas price, escalating at 100 percent of the Consumer Price Index (CPI),” Tamboran said, adding that the extension option is at a slightly discounted price.
Tamboran noted that the binding supply commitment is conditional on the BJV entering into a binding gas transportation agreement with APA on the proposed Sturt Plateau Pipeline, a binding gas processing agreement for the proposed Sturt Plateau Compression Facility, reaching a final investment decision (FID), and receiving key regulatory and stakeholder approvals.
The company is targeting to make an FID on the proposed Shenandoah South Pilot Project in mid-2024, with first production planned in the first half of 2026.
Tamboran holds a 47.5 percent working interest in the 51,200-acre area that will include the wells required to deliver the proposed volumes, while Falcon Oil & Gas Australia Limited holds a five percent working interest.
“We are proud to deliver on our commitment to provide the Northern Territory Government with long-term supply of gas from the Beetaloo Basin,” Tamboran Managing Director and CEO Joel Riddle said. “Tamboran has always promised that our first gas production from the Basin would be to the benefit of Territorians and we are excited to play our part in boosting energy security in the Northern Territory”.
“This is a transformational development for Tamboran and our partners, after ten years of hard work and more than [AUD 500 million] invested in Beetaloo exploration and appraisal activities. This represents a major milestone and puts Tamboran on a path where revenue from gas sales will support funding our future development phases, including supply to the East Coast gas market. In addition, the proposed pilot project is expected to provide initial royalties to both the Northern Territory Government and Traditional Owners within the region,” Riddle continued.
“With electricity in the Northern Territory predominantly sourced from gas-fired power, it is key that the Northern Territory has a readily available gas supply to keep the lights on. Due to the use of natural gas in the electricity supply, the Northern Territory is well below the national average for emissions intensity across Australia’s electricity network, especially NSW, Victoria and Queensland who rely heavily on coal”, he concluded.
In a separate announcement, Falcon CEO Philip O’Quigley said, “This is a significant development for Beetaloo Joint Venture, and represents a major milestone and puts the Beetaloo Joint Venture on a path where revenue from gas sales will support funding our future development phases, including supply to the East Coast and LNG gas markets”.
To contact the author, email rocky.teodoro@rigzone.com
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