- Strike Energy (STX) completes initial engineering work with Technip Energies for a modular and expandable gas plant in Western Australia
- The development of the South Erregulla gas plant will be rolled out in three phases in line with the company’s Gas Acceleration Strategy
- The plant will process gas from the South Erregulla gas field, and STX expects it will be in a position to consider a final investment decision in the coming months
- STX is preparing to commence a three-well South Erregulla drilling campaign in July
- STX shares are up 1.12 per cent to 45 cents at 11:52 am AEST
Strike Energy (STX) has completed initial engineering work with Technip Energies for a modular and expandable gas plant with fast-to-market opportunities in WA.
The location of the plant, wells and flowlines will be the company’s freehold farming land, now known as the Mid-West Low Carbon Manufacturing Precinct.
The plant will process gas from Strike’s South Erregulla gas field
STX said it planned to roll out the development of the South Erregulla project in three phases in line with its Gas Acceleration Strategy.
Phase one involves building the modular gas plant with the ability to process up to 40 terajoules per day (TJ/d) to support production from its existing independently certified 128 petajoules (PJ) of net 2P Reserves.
“As gas prices rise in the State, the proposed phase one, 40 TJ/d development at Strike’s 100-per-cent-owned South Erregulla gas field has the potential to generate a substantial cash flow for the company once online,” STX Managing Director and CEO Stuart Nicholls said.
Phase two will add expansion modules to increase energy throughput to over 80 TJ/d after additional reserves are discovered through planned appraisal drilling.
Lastly, phase three will deploy carbon dioxide removal modules to support the development of the Precinct’s carbon sequestration, including the compression and integration of the Precinct’s substantial wind and solar power capacity.
STX said it expected to be in a position to consider a final investment decision in the coming months.
“Preparing South Erregulla for its final investment decision will lock in Strike’s second source of gas production as part of its gas acceleration objectives,” Mr Nicholls said.
“This innovative development plan will allow Strike to proceed with a greater degree of speed and certainty than it would if it proceeded with a traditional large-scale, stick-built piece of infrastructure.”
In pursuit of its final investment decision, STX has submitted its primary environmental approvals for its South Erregulla gas field, plant and pipeline, including production licence applications and field management plans.
STX is targeting the commissioning of the first phase of the field’s development in late-2024.
Pre-final-investment gas marketing activities have been ongoing, with the company receiving proposals for firm gas supply at greater than $8 per gigajoule (GJ).
STX is preparing to commence a three-well South Erregulla drilling campaign, which will include two westerly up-dip Kingia appraisal wells and an easterly Wagina appraisal well.
Rig slots have been secured for these wells, which are expected to commence from July 23, with the objective of converting up to 271 PJ of net 2C Resources to 2P Reserves.
STX continues the engineering of its gas plant and has begun engaging with potential suppliers for the engineering, procurement, and fabrication contract of its modular plant.
STX shares were up 1.12 per cent to 45 cents at 11:52 am AEST.