Page 5 - AsianOil Week 30 2022

AsianOil COMMENTARY AsianOil

even avoiding any forecasted mid-decade WA facilities for West Erregulla will begin in the first
[Western Australia] industrial gas shortage,” half of 2023, pending an FID and receipt of out-
stated Strike’s managing director and CEO, Stu- standing permits and approvals. First gas from
art Nicholls. the project would then be expected in late 2024.
The company will now engage with partner
Talon to decide whether to take an FID on devel- What next?
opment of Walyering. If it decides to proceed, Strike’s projects are relatively small in scale and
it anticipates bringing the field to production would not go nearly far enough in addressing
quickly given that the project has already passed Australia’s future gas supply shortages, but they
the primary environmental review process. will nonetheless be welcomed by those calling
Strike described the project as having a low- on domestic producers to step up development.
cost development profile, and anticipates spend- The company has been talking up the poten-
ing AUD14.2mn ($10.0mn) on completing the tial of the Perth Basin to meet demand in West-
existing wells as well as building associated stor- ern Australia owing to the existence of multiple
age and offloading infrastructure. These facili- pipelines and comparatively low transportation
ties would be tied into either the Parmelia gas costs. It has also pointed to the basin’s carbon
pipeline or the Dampier-to-Bunbury pipeline. dioxide content and transmission intensity for The company has
Days later, on July 27, Strike issued a separate gas flowing to the industrial southwestern gas
announcement saying Netherland, Sewell & market, which is lower compared with various been talking up
Associates, Inc. (NSAI) had upgraded its West other basins in the region. the potential of
Erregulla gross 2P reserves by 41% to 422 PJ Indeed, with the energy transition continuing
(11.3 bcm), while gross 2C resources had been to become ever more of a priority even as gas the Perth Basin
increased to 30 PJ (805.3 mcm). demand rises, Strike has said that there is a con-
The upgrades were attributed to an increase siderable opportunity for gas to increase renew- to meet demand
in the quality and thickness of the field’s Kin- able penetration into the Western Australian
gia reservoir properties, conversion of previous market. The company is pursuing a target of in Western
contingent resources in the north of the field net zero emissions by 2030, with its strategy Australia.
and an extension of its boundary to the north- involving pursuit of a combination of natural
west, which had not previously been included in gas, renewable power and fertiliser production.
the assessment, Strike said. While Australia has seen strong opposition
Strike operates West Erregulla with a 54% to certain fossil fuel projects, there is scope for
direct and indirect interest. This includes own- numerous smaller players to pursue similar
ership of 7.63% of partner Warrego’s issued strategies to Strike in developing smaller-scale
equity capital, which translates into an addi- gas projects. While they will likely have to take
tional roughly 4% of the EP469 licence where care to highlight their energy transition creden-
West Erregulla is located. tials, there should certainly be scope to pursue
Strike anticipates that construction on the natural gas developments as Australia works to
gathering network and midstream processing deal with its expected gas supply shortages.™

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