Falcon Oil and Gas Ltd. has announced that the Beetaloo Joint Venture (BJV) has signed a binding agreement for a long-term Gas Sales Agreement (GSA) with the Northern Territory Government.
The agreement entails the supply of 14.6 PJ (13.8 BCF) annually from the proposed Shenandoah South Pilot Project for an initial nine-year period, extendable at the Buyer’s option for an additional six-and-a-half years.
Gas will be delivery to the APA-owned Amadeus Gas Pipeline (AGP) on a take-or-pay basis at a competitive market price, with an escalation linked to 100% of the Consumer Price Index (CPI). The Buyer’s extension option will be at a slightly reduced rate, Falcon stated in a press release.
The Agreement is a binding supply commitment conditional upon the BJV entering into a binding Gas Transportation Agreement with APA for the proposed Sturt Plateau Pipeline, a Gas Processing Agreement for the proposed Sturt Plateau Compression Facility, reaching a Final Investment Decision (FID) on upstream drilling operations, and securing all necessary approvals to proceed with these projects.
“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,” said Philip O’Quigley, CEO of Falcon.
The BJV aims for an FID on the planned 40 TJ (38,000 MCF/D) per day upstream drilling program by mid-2024, subject to securing funding and key regulatory and stakeholder approvals, with first gas flow planned in the first half of 2026.
Falcon Oil and Gas Australia Limited holds a 5% working interest in the designated 51,200-acre region encompassing the wells necessary to meet the proposed Pilot Project requirements.