July 30, 2015
Termination of gas sales agreement with Buru Energy
Alcoa of Australia’s $40 million gas sales agreement with Buru Energy (formerly ARC Energy) has been terminated following discussions between the companies and after Alcoa secured alternative gas supplies to power its Western Australian refineries.
On 9 April 2015 Alcoa announced it had secured approximately 75 percent of its Western Australian natural gas requirements to replace existing long-term contracts which expire at the end of the decade.
Under the terms of the Buru Energy agreement, Alcoa made a $40 million pre-payment for gas which was to be repaid if the final investment decision to supply gas did not occur by agreed dates. After a number of extensions this has not occurred and Alcoa has requested Buru Energy repay the $40 million pre-payment.
The companies will continue their relationship, however, as Alcoa has the right to obtain up to 100 petajoules of natural gas, on terms and pricing to be agreed, if Buru Energy undertakes a gas development delivering gas into the Dampier to Bunbury Natural Gas Pipeline.
In 2007, Alcoa and Buru Energy entered into a natural gas sales contract for the delivery of up to 500 petajoules of natural gas to Alcoa during a 15-year period.
With Alcoa’s future reliant on energy security, the company remains committed to competitively priced energy sources coming to market.
Alcoa has in the past contributed $40 million to natural gas exploration and development opportunities in Western Australia including Empire Oil and Gas and Latent Petroleum (now Transerv Energy).
Media contact: Brian Doy, email@example.com, 0404 800 690.