Buru Energy partners with CEFA to develop Rafael gas and condensate project in WA
Buru Energy (ASX: BRU) has signed a strategic development agreement with Clean Energy Fuels Australia (CEFA) to co-develop its Rafael gas/condensate project, located approximately 150 kilometres east of Broome.
Buru had previously identified the potential for Rafael to replace long-haul trucked or imported fuel used for power generation and mining in the north-west of Western Australia with a local source of trucked LNG and liquids.
CEFA builds, owns and operates integrated LNG solutions for remote mining operations, communities and industry in Australia.
Strong synergies
Chief executive officer Thomas Nador said the agreement would combine Buru’s upstream resource and expertise with CEFA’s strong downstream and midstream capabilities, financial backing and incumbency in the WA LNG market.
“The agreement with CEFA is a watershed moment for Buru and the Rafael gas project, marking a clear demonstration of the company’s gas strategy and transition from explorer to developer and long-term producer,” Mr Nador said.
“Rafael is the only confirmed source of conventional gas and liquids in onshore Western Australia north of the North West Shelf project.”
“It is a unique opportunity to provide energy to a growing market that is not connected to a gas pipeline and currently faces challenges with high energy costs and security of supply.”
Binding agreements
Buru and CEFA have agreed upon a business model as the basis for future binding agreements and expect to execute it in late 2025.
CEFA will fully finance, build, own and operate an LNG plant with a capacity of up to 300 tonnes per day and associated condensate infrastructure on the Rafael 1 well site.
Buru will be responsible for the financing, construction and operation of the upstream elements of the project, which currently consist of two wells (including the Rafael 1 discovery well), Native Title negotiations and state environmental approvals for the small-footprint project.
Funding options
Mr Nador said Buru was pursuing several funding options for its 2025 Rafael 1 well recompletion and testing program to support independent certification of the Rafael reserves and the drilling of a development well in 2026.
Reserves certification is a key condition precedent to any binding agreements with CEFA.
Buru is targeting late 2025 / early 2026 for a final investment decision for the project and cash flow to commence from 2H 2027.