Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) has actioned an agreement with APA Group (ASX:APA) aimed at establishing exclusive midstream gas infrastructure early works, opening the door to proposed long-form agreements and the transport of up to 25 terajoules (TJ) of gas per day from Australia's Beetaloo Sub-basin to market.
Subject to long-form agreements and approvals, APA Group will spend up to $5 million on Engineering and Design Concepts for midstream gas infrastructure facilities associated with Empire’s Carpentaria Pilot Project in the Northern Territory.
APA would then fund the Carpentaria Pilot Project midstream gas infrastructure facilities under a proposed partnering agreement, which Empire says would materially reduce the capital requirements to begin commercial production.
Enhanced project economics
"APA, Australia’s leading energy infrastructure business, has demonstrated its desire to connect the Beetaloo Sub-basin to customers both domestic and international, underwriting Australia’s energy security,” Empire Energy managing director Alex Underwood said.
“This agreement is a result of the substantial progress in resource development Empire has achieved since the MoU, announced in October 2021.
“APA potentially funding the midstream gas infrastructure facilities for Empire’s Carpentaria Pilot Project, reduces the capital requirement to Empire, enhancing project economics.”
The partnering agreement would also include transportation of large volumes of gas from the Beetaloo to Australian east coast markets subject to entering long-form agreements and approvals by each party.
The partnership is considering the potential construction of a new pipeline connecting the Beetaloo to APA’s existing Carpentaria Gas Pipeline between Mount Isa and Ballera (Queensland).
EEG said the pipeline would have the potential to expand to meet growing market demand on the East Coast (more than 500 terajoules per day) and would be the subject of further evaluation between Empire and APA in the medium term.