South Erregulla

Peaking Power Plant Development

Overview

As announced on the 13th of August 2024, Strike has been awarded Certified Reserve Capacity (CRC) by the Australian Energy Market Operator (AEMO) in the South West Interconnected System (in Western Australia) for its proposed fully integrated 85 MW peaking gas power station, as part of the development of the South Erregulla gas field in Production License L24 within the Perth Basin (100% net to STX).

Further details on the project can be found in the announcement made on the 24th of June 2024.

Strike has the unique opportunity to develop a peaking gas power plant with the South Erregulla gas field able to support a highly coveted interruptible gas supply adjacent to existing transmission lines within the State’s South West Interconnected System (SWIS), which transmits power across the >4 GW primary electricity market of WA. A current snapshot of the SWIS, including energy use, fuel mix, and pricing can be found on AEMO’s website here. 

Strike’s proposed power development leverages the new WA Wholesale Energy Market’s (WEM) constrained operating model and capacity credit scheme that supports the development of new merchant peaking power stations as a means of firming current and future intermittent renewable generation.

This strategic development plan for South Erregulla capitalises on the:

    • Incremental value that integrated gas to power projects can generate from the spark-spread during short term power prices coinciding with lower renewable generation.
    • Capacity credit mechanism that is now in force in WA whereby payments from the WA Government provide a high degree of confidence in the return profile of the project.
    • Geographical competitive advantage Strike has over the traditional WA domestic gas market (Carnarvon Basin) incumbents and other non-integrated generators.
    • Existing approvals and much of the planning work completed from the previous South Erregulla domestic gas project.

Important Notices

The development of the Power Project is contingent on, among other things, the award of Certified Reserve Capacity (CRC) and Network Access Quantity (NAQ), satisfaction of the conditions precedent to and financial close under the Macquarie Bank project finance facility for the Power Project (details of which were released to ASX on 21 June 2024), execution of all required procurement contracts, and obtaining all requisite regulatory and stakeholder permits, approvals, licences and authorisations by no later than 30 November 2024 in order to meet the construction timeline to be supplying electricity into the grid by 1 October 2026.

The forecast capital and operating expenditures and revenue for the Power Plant have been modeled based on the assumptions and information set out or referred to in the ASX announcement “South Erregulla Peaking Power Plant” released on 24 June 2024, are to the level of accuracy as specified in this release, and are subject to change. These forecasts are, by their nature, forward looking statements and subject to the same risks as other forward looking statements.