Mid West Low Carbon Manufacturing Precinct Update

Source: www.gulfoilandgas.com 9/1/2022, Location: Not categorized

• Strike has secured a $6 million agricultural finance facility from Rabobank to support the acquisition of the ‘Precinct’.
• Marketing to developers, owners and operators of the Precinct’s renewable energy and carbon farming development opportunities has commenced.
• The WA Government’s decision to exit coal fired power has substantially increased the attractiveness of the renewable energy development at the Precinct, with the opportunity to support the State’s decarbonisation plan via the upsizing of the development and exporting power to the State’s grid.

Strike Energy Limited provides an update on the development activities at the Company’s 100% owned Mid West Low Carbon Manufacturing Precinct, which sits above the South Erregulla gas discoveries in EP503 and which will host the Project Haber fertiliser development.

Precinct Acquisition
Strike has secured a $6 million agricultural finance facility from Rabobank Australia Limited with a 3-year term to support the acquisition of the property, which is due to settle in September. The facility interest rate is in line with market agri-lending, which will be serviced predominately by lease of the property until Project Haber’s investment decision when refinancing is planned to occur.

The debt will be secured against the property. The balance of the acquisition will be supported from existing funds.

Renewable Energy Integration Strike has commenced marketing the opportunity to develop, own and operate the Precinct’s renewable energy infrastructure.

Substantial interest has formed across the spectrum of commercial / ownership models with the opportunity of guaranteed power offtake to service Strike’s Project Haber development a major attraction. Several of the engaged counterparties are also interested in potential renewable hydrogen integration for surplus power, which is made technically and commercially possible via the access to industrial quantities of water brought to the Precinct and the localised hydrogen demand opportunity that Project Haber presents.

Since Strike announced the acquisition of the Precinct, Western Australia's Government declared that the State-owned coal fired power stations would be retired by 2030. This segment of WA’s electricity system traditionally provides around 40% of total annual electricity consumed on the South West Interconnected System (SWIS). The Government also announced that an estimated $3.8 billion will be invested in new green power infrastructure in the SWIS including wind generation and storage to ensure continued supply stability and affordability. The Precinct is ideally located, not only in a Tier 1 wind resource location, but also within close proximity to the State’s grid to support the connection of the renewable energy infrastructure. The major 330kV distribution line is within 30km of the Precinct with several other 132kV lines running even closer. This exciting opportunity provides any potential developer the chance to participate in the 40% decarbonisation of WA’s electricity system versus 2021 levels1.

Carbon Farm Development
Strike has engaged with multiple developers, owners of nearby carbon farms and carbon operating service companies to explore the various models of how the Precinct may proceed with planting of its proposed carbon farm. Strike is looking to participate in some way in the carbon credit generation whilst balancing that with the capital required to sow and plant. Strike is expecting to be able to make a decision in the near future as to the preferred model and potential partners on the opportunity and will make further disclosure in due course.

This announcement is authorised for release by the Managing Director and Chief Executive Officer in accordance with the Company’s Continuous Disclosure Policy.

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