PERTH (miningweekly.com) – Natural gas developer Tamboran Resources has tapped ASX-listed APA Group as the preferred transmission pipeline partner for its Beetaloo Basin development.

The two companies have now signed a term sheet, which will be converted into a longer-form agreement, to jointly develop gas transmission pipelines to connect Tamboran’s Beetaloo Basin asset to Australia’s domestic East Coast gas market as well as Tamboran’s proposed Northern Territory liquefied natural gas (LNG) development at Middle Arm.

Under the agreement, APA will fully fund all activities under the strategic partnership, including spending up to A$10-million on studies and approvals over the next 12 months. APA will begin a project to install a gas pipeline connecting Tamboran’s proposed pilot development at Shenandoah South (SS) to the Amadeus gas pipeline (AGP), targeting completion by 2025.

Once operational, the proposed SS to AGP pipeline will enable Tamboran’s gas to stabilise the Northern Territory gas grid and start sales under Tamboran’s existing 36.5 PJ/y gas sales agreement with Origin Energy.

Furthermore, APA will also progress initial stages of a project to connect the Beetaloo Basin to the existing East Coast gas network to enable gas flow by 2028.

“We are excited to be working closely with APA Group, the largest and most respected pipeline operator in Australia, to commercialise our low reservoir CO₂ gas in the Beetaloo Basin via access to the Northern Territory, Australia’s East Coast and international LNG markets,” said Tamboran MD and CEO Joel Riddle.

“APA will commence the initial stages of work to connect the SS location in the ‘Core‘ Beetaloo Basin to the AGP. The pipeline is planned to be available to accept gas by the end of 2025. This will support our efforts s to deliver into the existing 10-year GSA with Origin Energy for up to 36.5 PJ/y.”

Riddle said that the pipeline is planned to have a capacity of more than 500-millilon standard cubic feet a day, reflecting the anticipated market shortfall forecast by the Australian Energy Market Operator in the southern states by 2030.

“Tamboran remains committed to supporting the Australian domestic gas market through the energy transition with low reservoir CO₂ gas from the Beetaloo. I believe gas is expected to play a key role in meeting Australia’s emissions reduction targets while supplying affordable electricity and food prices to Australian families.

“Longer-term, APA will also work closely with Tamboran to potentially build a pipeline from the Beetaloo Basin to Middle Arm in Darwin, supplying Tamboran’s proposed Northern Territory LNG development on the site under exclusivity from the Northern Territory government, which was announced earlier this month.

“The site has potential to house a 6.6-million-tonne-a-year LNG project, with potential to supply gas to the Asia Pacific region to support a transition from coal-fired power to gas and renewables. With global emissions continuing to rise despite a significant investment in renewables over the last decade, I honestly believe that the most effective way to reduce emissions is through the displacement of coal, which is only possible through the supply of low-cost, affordable gas,” said Riddle.

Tamboran on Friday also announced two non-binding memoranda of understanding (MoUs) with energy majors BP and Shell regarding the potential purchase of LNG from the proposed Middle Arm development

The two MoUs include volumes of up to 2.2-million tonnes of LNG a year each to bp and Shell, over a 20-year period.

“Securing these MoUs with bp and Shell is a significant step in progressing the proposed NTLNG development at Middle Arm,” said Riddle.

“bp and Shell are two of the world’s largest LNG portfolio trading and energy companies and provide important and credible counterparties for Tamboran to progress financing discussions to support the sanctioning of the Northern Territory LNG project, capable of producing up to 6.6-million tonnes a year.

“We look forward to progressing our agreements with both parties, who have both shown significant support to Tamboran through the accelerated discussions, which further emphasise the importance of LNG demand growth in the Asia-Pacific region.”

Tamboran will now progress discussions with both BP and Shell prior to the completion of the front-end engineering design in 2024 and aim for formal execution of the LNG sale and purchase agreements in 2025.