The HOA contemplates the sale of gas produced from the Glyde Field from production startup (mid-CY2025) for 14 years through to the end of CY2039 providing fuel to support the development of the Merlin Diamond Project which is currently undergoing a feasibility study
Armour signs gas supply heads of agreement. (Credit: Anita starzycka from Pixabay)
Armour Energy Limited, (Armour), is pleased to announce that it has signed a Heads of Agreement (HOA) with Australian Natural Diamonds Ltd, a wholly owned subsidiary of Lucapa Diamond Company Limited (ASX: LOM), for gas supply to the Merlin Diamond Project from its Glyde discovery in EP 171 in the McArthur Basin, Northern Territory.
HIGHLIGHTS
HOA in place for 14 years supply of gas produced from the Glyde gas discovery to Merlin Diamond
The agreement reinforces the hydrocarbon potential of the McArthur Basin in the Northern Territory and Armour’s ability to provide this valuable resource to the domestic
Successful execution of the development plan will represent the first production from the Basin which lies within 20 km of the Merlin
The HOA contemplates the sale of gas produced from the Glyde Field from production start- up (mid-CY2025) for 14 years through to the end of CY2039 providing fuel to support the development of the Merlin Diamond Project which is currently undergoing a feasibility study.
This is anticipated to be a minimum of 7 PJ of gross sales gas over the contract term. The terms set out in the HOA will form the basis of a fully termed Gas Sales Agreement (“GSA”) once all the conditions precedent have been met.
Armour CEO, Mr Christian Lange, commented: “This HOA with Lucapa represents a significant opportunity to further appraise, develop and commercialise the Glyde gas discovery in the Northern Territory. Recent technical work performed by Armour and SLB (Schlumberger) have validated the producibility of the existing well and plans are underway to reassess the resource potential and development feasibility. The agreement underpins the accelerated pathway to commercialisation of this shallow, conventional gas asset and reinforces the exciting conventional and unconventional hydrocarbon potential of the McArthur Basin in the Northern Territory and our ability to provide this valuable resource to the domestic market and represent first production from the Basin.
We are looking forward to working closely with the team at Lucapa and providing them with a reliable and sustainable supply of high-quality gas for the life of the mine.”
Mr Stephen Wetherall, Managing Director of Lucapa Diamond Company Limited commented: “The prospect of the availability of gas from a source less than 20 km from the Merlin Diamond Project rather than diesel trucked from Darwin, potentially as part of a solar- gas hybrid power solution, is of significant interest to Lucapa from both an environmental and project economics point of view. We look forward to working with Armour Energy on this exciting initiative.”
