Tamboran Resources Ltd (OTC:TBNRF) has secured three formal and binding agreements with APA Group to support the development of its Beetaloo Basin assets in the Northern Territory of Australia.
These agreements include two early development agreements and a partnering agreement covering two pipelines.
The first is the Sturt Plateau Pipeline (SPP) a 35-kilometre pipeline that will connect the proposed 40 million cubic feet per day Sturt Plateau Compression Facility (SPCF) to the Amadeus Gas Pipeline (AGP) – targeted for the second half of 2025.
The second involves a Beetaloo Basin to East Coast gas pipeline, which would connect the basin to the East Coast gas market – targeted for 2028.
Finally, the partnering agreement under which TBN will work exclusively with APA Group also provides an opportunity to acquire up to 15% of the pipeline projects (excluding the SPP) in the lead-up to a final investment decision.
Major milestone
“We are excited to progress our June 2023 Letter Agreement with APA Group into binding early development and partnership agreements that support the development of Tamboran’s Beetaloo Basin assets in the Northern Territory,” Tamboran Resources managing director and CEP Joel Riddle said.
“This is a major milestone to bringing much-needed natural gas from the Beetaloo Basin to the Northern Territory and East Coast gas markets.
“Tamboran and APA have committed to partnering to bring much needed supply to both markets, which are expected to see gas supply shortfalls in coming years.
“Under the agreements, APA will commence early development works associated with the SPP and Beetaloo to East Coast gas pipelines, including conditional expenditure of up to $10 million to progress early work.
“The parties have agreed a gas transportation framework that provides Tamboran with a market-based tariff structure on the proposed pipelines.
“Furthermore, and subject to certain conditions being met, Tamboran has an option to acquire a 15% interest in new pipelines that emanate from Tamboran’s Beetaloo Basin acreage, exercisable in the lead-up to Final Investment Decision.”
APA’s conditional $10 million early expenditure on the pipelines is based on Tamboran continuing to progress and achieve agreed milestones in relation to the proposed Shenandoah South Pilot Project.
Cheaper local gas production
“I believe the development of the Beetaloo Basin, which has potential to supply gas into the domestic market for the duration of the energy transition, has a major role to play in proving energy security for Australian families,” Riddle continued.
“Without local investment in new gas, Australians could be relying on gas imports from other countries at international gas prices.
“I also see the basin playing a role in the energy transition by supporting the local uptake of renewable energy, as wind and solar displaces coal-fired power.
“Without natural gas, grid stability would be increasingly more difficult and more expensive.”
Tamboran says the two companies will begin negotiations on a binding Gas Transportation Agreement (GTA) with the goal of executing by the first half of 2024 – again, subject to TBN achieving agreed project milestones.