Arafura (ASX:ARU) strikes NT gas deal for NolansFebruary 13, 2024
Arafura Rare Earths‘ wholly owned subsidiary has signed an accord with the Mereenie Field joint venture partners for gas supply to Nolans, one of Australia’s foremost rare earth projects advancing under new leadership in the Northern Territory.
The pact with JV partners Central Petroleum, Cue Energy, Macquarie Mereenie, and New Zealand Oil & Gas provides for up to 27.41 combined petajoules of natural gas for three years from 2026 and a two-year option for extension.
“We are pleased to confirm the terms of gas supply for Nolans,” newly appointed Arafura Managing Director Darryl Cuzzubbo said.
“Ensuring access to local natural gas is a positive step in the development of this major project, which will see critical rare earth minerals from the Northern Territory delivered to customers around the world in support of energy transition initiatives.”
While Nolans boasts a minimum 38-year mine life and a rich endowment of coveted neodymium-praseodymium, financing the project has proven difficult amid price falls, and development delays spurred a change at the top for Arafura.
An executive search led them in-house to Mr Cuzzubbo, something the company cited as a reflection of its board’s absolute focus and commitment toward developing Nolans, with Arafura now having a gas deal in place as its first move after the shift.
Arafura has some big name deals already in place, including offtake pacts with Hyundai, Kia, and global wind turbine manufacturer Siemens Gamena.
And while prices remain depressed, greater powers than those companies have a vested interest in rare earths outside of China, and fellow Australian Lynas Rare Earths are being bankrolled by the Pentagon to build a refinery in Texas.
The Mereenie Gas field has had its own capital issues in the past, and the four partners have now inked a new supply deal with natural gas standing as the bridge between more carbon-intensive fuels and renewables.
“This new gas supply agreement allows Central to broaden its customer base across the NT and demonstrates the critical role that gas has to play in the transition to a cleaner energy future,” Central Managing Director and Chief Executive Leon Devaney said.
“We are delighted to provide our support to Arafura’s Nolans rare earths project and hope this will be the start of a long relationship.”
New Zealand Oil & Gas Chief Executive Andrew Jeffries said his company was proud to be playing its part in the Northern Territory.
“The Nolans rare earth minerals project will deliver critical minerals vital for the permanent magnets in wind turbines and EV motors – the marvelous machines that are the transition,” Mr Jeffries said.
“The criticality of these materials is recognised by the Australian Federal and Northen Territory governments, and we are proud to be playing a key role in making it happen with our homegrown Northern Territory energy supply. Gas is a three-letter word for transition.”
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