Tamboran Resources (ASX:TBN) has taken a significant step towards commercialising the vast gas resources of the Betaloo Sub Basin by signing a gas supply agreement with the Northern Territory Government.
Tamboran announced that the Betaloo Joint Venture (BJV) had inked the long-term supply agreement to supply 40 TJ per day from the developing Shenandoah South Pilot Project for an initial nine years, starting in the first half of 2026.
Tamboran shares were up as high as 6 per cent in early trade at 18 cents after the company revealed that the gas will be delivered to the Territory via the existing Amadeus Gas Pipeline for an initial nine-year period – which will entail 131PJ (62.4 PJ net to Tamboran) in total.
The Betaloo Basin has been estimated by Geoscience Australia to hold up to 500Trillion cubic feet of gas in the Velkerri B layer – dwarfing Australia’s most prolific hydrocarbon producing region, the North West Shelf of Western Australia which is home to some of the biggest LNG projects in the world, notably the North West Shelf, Pluto, Gorgon and Wheatstone.
The Northern Territory is the only region of Australia that has lifted the moratorium on unconventional gas drilling, which has allowed Santos, Tamboran and Empire Energy to import special rigs to engage in hydraulic fracturing, or fracking – a controversial method of drilling using high pressure water to break tight rocks and release trapped fossil fuels to flow to surface. In spite of a well organised anti-fracking environmental lobby group, the practice was highly successful and established the United States as the world’s No.1 producer of both gas and oil in recent years.
Tamboran said the Northern Territory had an option to extend the sales agreement for a further six-and-a-half years through to 2042, with the current daily volume representing approximately two-thirds of the Northern Territory’s current gas requirements.
The price agreed is on a take-or-pay basis at “a market competitive gas price”, escalating at 100% of the Consumer Price Index with the buyer’s extension option slightly discounted.
The binding supply commitment is conditional on the joint venture coming to a transportation agreement with APA on the proposed Sturt Plateau Pipeline and Tamboran reaching final investment decision on the Shenandoah South Pilot Project by mid-year.
Tamboran holds a 47.5% working intertest in the 51,200-acre area that will include the wells required to deliver the proposed Pilot Project volumes.
Tamboran Managing Director and CEO, Joel Riddle, said he was pleased that first gas from their fields would be delivered to the domestic market.
“We are proud to deliver on our commitment to provide the Northern Territory Government with long-term supply of gas from the Beetaloo Basin. Tamboran has always promised that our first gas production from the Basin would be to the benefit of Territorians and we are excited to play our part in boosting energy security in the Northern Territory.
“This is a transformational development for Tamboran and our partners, after ten years of hard work and more than A$500 million invested in Beetaloo exploration and appraisal activities. This represents a major milestone and puts Tamboran on a path where revenue from gas sales will support funding our future development phases, including supply to the East Coast gas market.”