Armour signs gas supply HoA with Aussie diamond producer

ASX-listed Armour Energy has signed a heads of agreement (HoA) with Australian Natural Diamonds for gas supply to the Merlin diamond project from its Glyde discovery in EP 171 in the McArthur basin, Northern Territory, it said on February 20.

The HoA contemplates the sale of gas produced from the Glyde field from production startup (mid-2025) for 14 years through to the end of 2039 providing fuel to support the development of the Merlin diamond project which is currently undergoing a feasibility study. This is anticipated to be a minimum of 7 petajoules of gross sales gas over the contract term.

The terms set out in the HoA will form the basis of a fully termed gas sales agreement once all the conditions precedent have been met, Armour said.

“Recent technical work performed by Armour and SLB (Schlumberger) have validated the producibility of the existing well and plans are underway to reassess the resource potential and development feasibility,” Armour CEO Christian Lange said.

“The agreement underpins the accelerated pathway to commercialisation of this shallow, conventional gas asset and reinforces the exciting conventional and unconventional hydrocarbon potential of the McArthur basin in the Northern Territory and our ability to provide this valuable resource to the domestic market and represent first production from the basin,” he added.