Equus Energy Signs Binding 10-Year Gas Sales Agreement with Alcoa in Western Australia
Key Takeaways
- •Equus Energy signed a binding 10-year gas sales agreement with Alcoa for the proposed Equus gas project in Western Australia.
- •The contract is for about 50 terajoules of gas per day, totaling roughly 182 petajoules over the full term.
- •At an indicative price of $6 to $8 per gigajoule, the agreement is valued at about $1.1 billion to $1.46 billion.
- •The broader commercial deal includes access to up to US$30 million in project funding as Equus advances toward a final investment decision.
- •Equus shares rose 12.9% to 35.0 cents after the announcement, lifting its market value to about $63.43 million.
Equus Energy (ASX: EQU) has signed a binding 10-year gas sales agreement (GSA) with Alcoa, making the aluminium producer the foundation domestic gas customer for the proposed Equus gas project in Western Australia.
Alcoa operates three alumina refineries in Western Australia — Kwinana, Pinjarra, and Wagerup — making it one of the state's largest industrial gas consumers. Securing long-term domestic gas supply has become a growing priority for WA's mining and processing sector amid forecasts of a supply tightening from existing fields later this decade.
Under the terms of the agreement, Equus will supply approximately 50 terajoules per day (TJ/day) of gas over a 10-year period, equating to roughly 182 petajoules (PJ) across the full contract term. At an indicative gas price of $6 to $8 per gigajoule, the total gas volume would represent an estimated $1.1 billion to $1.46 billion over the life of the contract.
The GSA forms part of Equus' broader commercial arrangement with Alcoa, which also grants Equus access to up to US$30 million in project funding as it advances the Equus gas project toward a final investment decision (FID).
The Equus gas project is located approximately 200 kilometres northwest of Onslow on Western Australia's North West Shelf. The asset holds an independently certified 2C Contingent Resource of 1.7 trillion cubic feet (Tcf) of gas and 38 million barrels of condensate.
Equus Energy Managing Director Will Barker said the agreement underscores the project's significance as a substantial, proven gas resource capable of addressing domestic market shortfalls in Western Australia and providing backfill for spare LNG capacity on the North West Shelf.
"Establishing Alcoa as our foundation domestic gas customer and funding partner for up to US$30 million provides a strong commercial platform as we move into the next phase of the project," Barker said.
He added that with 100% ownership of the only independent, multi-Tcf gas resource on the North West Shelf, the company's focus now turns to project partnering and commercialisation as it drives toward FID.
Following the announcement, EQU shares rose 12.9% to 35.0 cents, bringing the company's market capitalisation to approximately $63.43 million.
