Arafura signs gas supply agreements with Mereenie joint venture partners
Agreements are for supply of up to combined 27.41 petajoules of natural gas from 2026 for a three-year term, with an option to extend for two years
Terms include take-or-pay provisions, and requirement for conditions precedent associated with the development of the Nolans rare earths project being met
Special Report: Arafura Rare Earths has signed gas supply agreements with the largest onshore gas field in the Northern Territory to supply a 27.41 petajoules of natural gas for the Nolans NdPr Project north of Alice Springs.
Arafura Rare Earths (ASX:ARU) has moved its Nolans Project in the Northern Territory further along the development pathway with the execution of gas supply agreements with the Mereenie joint venture partners for the supply of up to a combined 27.41 petajoules (PJ) of natural gas to the site from 2026 on a three-year term.
Mereenie is the largest onshore gas field in the Northern Territory with Central Petroleum holding a 25% stake as the Mereenie field operator, while Cue Energy Resources has a 7.5% participating interest, Macquarie Mereenie has a 50% participating interest and New Zealand Oil & Gas has a 17.5% participating interest.
Under the agreements, Central Petroleum will supply 6.85 PJ of gas, aggregated with supply of 2.06 PJ from Cue Energy, 13.7 PJ from Macquarie Mereenie and 4.8 PJ from New Zealand Oil & Gas.
The gas supply agreements (GSAs) include take-or-pay provisions and fixed pricing, with allowances for escalation in line with the consumer price index.
They also include requirements for several conditions precedent tied to the development of the Nolans Project being satisfied 30 June 2024.
‘Positive step’ for Nolans development
Newly appointed ARU managing director and chief executive officer Darryl Cuzzubbo says the company is pleased to confirm the terms of gas supply for Nolans.
“Ensuring access to local natural gas is a positive step in the development of this major project, which will see critical rare earth minerals from the Northern Territory delivered to customers around the world in support of energy transition initiatives,” he says.
What else is happening?
Other key items on its checklist for development were ticked off during the quarter including the commissioning and handover of more than 250 permanent camp rooms, along with associated utilities.
Water supply from the Nolans bore field was commissioned and handed over in readiness to support bulk earthworks commencement, and access roads were prepared for the wet season and made ready for the next phase of work at site.
ARU is positioning itself to mobilise to site and begin main construction works at Nolans as soon as possible and upon the completion of project funding activities.
This article was developed in collaboration with Arafura Rare Earths, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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