Santos pens gas deal with Walyering JV in Perth basin
Santos has entered into a gas deal with the Walyering joint venture in the Perth basin in Western Australia, it said on December 14.
Santos will purchase a total of 36.5 petajoules of gas from the Walyering field over five years, starting in the first half of 2023. CEO Kevin Gallagher said Santos continues to support Western Australian industry through the delivery of competitively priced domestic natural gas.
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"We are delighted to sign this agreement with the Walyering joint venture and bring this gas to market in a timely manner, reinforcing our position as WA's biggest supplier of domestic gas," Gallagher said.
Walyering is a conventional gas discovery located within the exploration permit (EP) 447, in the onshore Perth basin. Strike Energy operates EP447 with 55% interest, while Talon Energy owns the remaining 45% interest.
Strike sanctioned the Walyering gas field for development in August this year. The final investment decision was made following the completion of the recent independent certification of a 54.2 PJ 2P gas reserve for the Walyering gas field.
Strike in a separate statement said that the contract covers tranches of "firm take or pay" volumes as well as "as available", which provides flexibility to the JV as the field ramps up towards its maximum production. The agreement is US-dollar denominated linked to escalation in US-CPI.
“The agreement with Santos provides a commercially attractive route for the Walyering JV to sell its gas stream in a strong pricing environment," Strike CEO Stuart Nicholls said. "As Strike commissions the field, the flexibility of this agreement is supportive of Strike managing reservoir performance whilst maximising early revenues during the ramp up period."
The Walyering gas field development procurement programme is 95% complete and construction is on schedule to allow the first gas sales in Q1 of 2023, Strike said.