Alcoa gas supply deal for ERM, Empire

ERM Power and its joint venture partners Empire Oil & Gas and Wharf Resources have signed a gas supply agreement with Alcoa of Australia for gas from its Gingin West and Red Gully gas fields, off the coast of Western Australia.

ERM announced today that the joint venture had entered an agreement to sell 15,000 terajoules of gas to Alcoa from 12 November 2012.

The agreement includes a staged $25 million prepayment by Alcoa to the joint venture, ERM said.

ERM Power managing director Philip St Baker said the contract was an important milestone for the company’s gas subsidiary, ERM Gas.

“With the move into commercialisation and gas and condensate sales, ERM Gas has evolved from a small, complementary and developing business into an emerging business with the potential to deliver profits in its own right,” Mr St Baker said.

The gas supply agreement is conditional on approval from Alcoa’s parent company.

The target date for the joint venture to being delivery is November 12.