Tamboran Resources Corporation (OTC:TBNRF, ASX:TBN) has signed a “transformational” sales agreement to supply Australia's Northern Territory with gas from the proposed Shenandoah South Pilot Project in the Beetaloo Basin amounting to around two-thirds of the Territory’s current daily gas requirements.
The long-term Gas Sales Agreement (GSA) will see the Beetaloo Joint Venture (BJV) of Tamboran (B2) Pty Ltd and Falcon Oil & Gas Australia Ltd supply the NT Government with 40 TJ per day for an initial term of nine years starting in the first half of 2026.
This equates to approximately 19 TJ per day net to Tamboran and the nine-year amount to a 131.4 PJ total with approximately 62.4 PJ net to Tamboran.
The NT Government also has an option to extend the GSA for a further six-and-a-half years through to 2042.
“Boosting energy security”
Tamboran Resources managing director and CEO Joel Riddle said: “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 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 10 years of hard work and more than A$500 million invested in Beetaloo exploration and appraisal activities.”
GSA details
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% of the Consumer Price Index (CPI).
The buyer’s extension option is at a slightly discounted price.
This 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.
Tamboran is targeting FID on the proposed Shenandoah South Pilot Project in mid-2024, with first production planned by H1 2026.
The company holds a 47.5% working interest in the 51,200-acre area that will include the wells required to deliver the proposed Pilot Project volumes.
“A major milestone”
"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,” Riddle said.
"In addition, the proposed Pilot Project is expected to provide initial royalties to both the Northern Territory Government and Traditional Owners within the region.
“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.”