Alinta locked in as Strike ramps up sales

Strike Energy has secured a sales agreement with Alinta Energy as it ramps up marketing activities for production from its Walyering gas field in the Perth Basin.

Under the deal, Strike will supply a total 3.4 petajoules of gas to Alinta through the state’s Parmelia gas pipeline on a take-or-pay basis, for a period of two years beginning in February.

The Alinta deal comes just over a week after Strike delivered 33 terajoules of gas from Walyering into the state’s domestic gas market on December 24.

Strike achieved first production at Walyering in September but had been limited in delivery to its customers by periods of downstream maintenance on the Parmelia pipeline.

Strike managing director Stuart Nicholls said the project was running in line with expectations, and that the company was pleased with its latest developments.

“Reaching nameplate capacity at Walyering within 90 days of start-up of the facility marks a significant achievement for Strike’s project team,” he said.

“With the confidence that Walyering can operate steadily at these rates or higher, Strike will increase its gas marketing activities, which starts with this additional strip of firm offtake to Alinta Energy.”

Strike also has a sales agreement with Santos at Walyering, under a deal struck in 2022.

Walyering was developed by Strike and joint venture partner Talon Energy as part of a broader, government-endorsed strategy by the former to fast track four fields into production.

Strike completed a deal to acquire Talon just after Christmas, giving it 100 per cent ownership of the producing asset at Walyering.

The company said its work in delivering gas from Walyering would guide progress at other Jurassic wet-gas discoveries in the Perth Basin region, singling out wholly owned Ocean Hill project.

Strike also owns 100 per cent of the South Erregulla gas field, and 50 per cent of the West Erregulla field in a joint venture with Hancock Prospecting subsidiary Warrego Energy.

The target for first production at South Erregulla is 2025, followed by West Erregulla in 2026.

Ocean Hill is scheduled for appraisal in 2025 and could be fast-tracked for development on success.

Strike secured offtake deals with South32 and AGL for future production from South Erregulla in November, pending a final investment decision. The Environmental Protection Authority cleared the way for South Erregulla’s development days earlier, giving stage one of the project primary environmental approval.

The milestones come as Western Australia assesses its gas supply future, following the recent release of the Australian Energy Market Operator’s WA Gas Statement of Opportunities, which forecast growing shortfalls in supply in the years to come.

That projection factored in new supply from South Erregulla, alongside other projects including Mineral Resources’ Lockyer Deep asset and Beach Energy and Mitsui’s Waitsia Stage Two joint venture project, both in the Perth Basin.

Speculation is mounting following government consultation with industry that the state could reverse a policy decision made in August last year requiring new onshore producers in the basin to supply the domestic market only.

Strike has been vocal in its opposition to the policy shift, with chair John Poynton telling the company’s recent AGM that removing export opportunities affected the company’s investment case.

An inquiry into WA’s domestic gas policy is ongoing, with a report expected to be tabled at the end of May.

Strike shares were trading around one per cent lower at 8.50am WST.