Buru Energy Intensifies Focus on Rafael Gas Project Despite Production Delay

Buru Energy (ASX: BRU) continues to tinker with the timetable for bringing its Rafael gas and condensate field to market.

The company had been hoping to start-up production from Rafael in 2027, but has now conceded the project is not likely to come online until Q1 2028.

The confirmation of the new start-up schedule follows the recent extension for two additional years to allow Buru to apply for a petroleum production licence while maintaining its development timeframe.

Strategic Development

Buru signed a strategic development agreement for Rafael earlier this year with integrated clean energy solutions provider Clean Energy Fuels Australia (CEFA).

CEFA will provide funding for 75% of the total estimated $150 million development cost, with Buru retaining 100% of the upstream interest.

Located in Western Australia’s Canning Basin, the Rafael development proposes to supply CEFA’s domestic LNG portfolio, the greater Kimberley market and local transport and logistics infrastructure.

The current plan is to supply a gas plant from two wells, including the original Rafael-1 discovery well.

Second Well to be Drilled

The six-month delay will allow Buru to complete Rafael-1 as a producer, along with the drilling of a second Rafael B well sometime in 2026.

Buru also intends to undertake an extended production flow test to underpin independent reserves certification, the key upstream activity it must conduct before making a final investment decision in Q3 2026.

Buru says it is exploring several options to secure up to $40m funding it requires for resource appraisal at Rafael in 2026.

“By prioritising project simplicity and early cash flows from the Rafael gas project, we can build a strong foundation that will support long term success and shareholder value,” chief executive officer Thomas Nador said.

Hydrogen-Helium Divestment

Buru recently sold its South Australian hydrogen and helium exploration assets to Koloma Australia, whose US-based parent company’s backers include Amazon, Mitsui, Osaka Gas and United Airlines.

Koloma Australia has agreed to acquire Buru subsidiary 2H Resources (2HR) for a consideration of up to $2m, in a deal that includes beneficial interest in all of 2HR’s petroleum and gas storage exploration licence application areas in SA, along with its exploration licences in Tasmania and special prospecting authorities in Western Australia.

Buru has also executed an asset sales and purchase agreement with Koloma for certain graticular blocks in the Canning Basin.

“The divestment of 2HR is consistent with our focus and discipline to commercialise the Rafael gas and condensate resource and building a Kimberley based gas business that will generate enduring material cashflows and shareholder returns,” Mr Nador said.