Buru Eyes A$400M NPV with Rafael Gas Project FID Set for 2026
Buru Energy advances its Rafael Gas Project in Western Australia with a focus on sustainable growth, targeting a final investment decision in 2026 and production start in 2028. The project aims to supply local power generation with trucked LNG and condensate, replacing costly imports.
- Rafael Gas Project targets 2026 final investment decision and 2028 production start
- Partnership with Clean Energy Fuels Australia to finance and operate LNG plant
- Conservative development approach prioritises early cashflows and low-risk design
- Estimated gross unrisked NPV of A$400 million and annual pre-tax cash flow of ~$70 million
- Project addresses regional energy supply deficit and aligns with WA government plans
Project Overview and Strategic Positioning
Buru Energy Limited has provided a comprehensive update on its 100% owned Rafael Gas Project, situated in the onshore Canning Basin of Western Australia. Discovered in 2021, Rafael represents a significant conventional gas and condensate resource poised to transform energy supply in the Kimberley region. The project is designed to replace the current reliance on long-distance trucked LNG and diesel imports for power generation and mining operations with a local, more secure source of energy.
Central to the project’s development is a strategic partnership with Clean Energy Fuels Australia (CEFA), a subsidiary of the Octa Group backed by global investment fund I Squared Capital. CEFA will finance, build, and operate a modular LNG plant with a capacity of 250-300 tonnes per day, alongside marketing and product distribution. This partnership effectively limits Buru’s capital expenditure to upstream activities, primarily drilling and well completions.
Conservative Development Approach and Financial Outlook
Buru’s CEO, Thomas Nador, emphasised a conservative and risk-managed approach to resource development amid challenging market conditions. The company plans appraisal drilling in the second quarter of 2026, targeting the Rafael B and Rafael 1 wells, to support independent reserves certification and a final investment decision (FID) by the third quarter of 2026. Production startup is targeted for the first quarter of 2028.
Economic modelling based on a high-confidence 1C contingent resource estimate of 85 billion standard cubic feet of gas and 1.8 million barrels of condensate projects a gross unrisked net present value (NPV) of approximately A$400 million. Annual pre-tax operating cash flow is estimated at around A$70 million, assuming a gas price of A$15 per gigajoule and condensate price of A$1.50 per litre. These figures highlight the project’s potential to generate robust, long-term cash flows, significantly exceeding Buru’s current market capitalisation of A$19 million.
Market Context and Regional Significance
The Rafael Gas Project is uniquely positioned to address a growing energy supply deficit in the Kimberley and northern Pilbara regions. Currently, these areas depend heavily on trucked LNG and diesel transported over distances up to 1,400 kilometres, incurring high costs, supply insecurity, and substantial transport emissions. Rafael’s proximity to key demand centres such as Broome and the greater Kimberley region offers a competitive advantage, providing a reliable, on-demand energy source.
Moreover, the project aligns with Western Australia government plans to overhaul the Kimberley energy system by 2028, increasing renewable energy penetration while maintaining gas as a critical firming fuel. Rafael’s condensate also presents a potential diesel substitute for over 100 remote communities and mining operations, enhancing regional sustainability.
Funding and Development Pathway
Buru is actively pursuing multiple funding avenues to support the A$40 million appraisal program planned for 2026. Options include joint ventures to share upstream risk, debt or mezzanine financing secured against the Rafael asset, private equity or venture capital investments, and strategic partnerships. The company’s collaboration with CEFA mitigates downstream capital requirements, focusing Buru’s investment on resource appraisal and well development.
The project’s small footprint, use of proven conventional drilling techniques, and modular plant design are expected to facilitate faster regulatory approvals and construction timelines. Buru has also commenced negotiations with Traditional Owners and is progressing gas and condensate marketing agreements in tandem with CEFA.
Outlook and Strategic Implications
Buru Energy is transitioning from an explorer to a developer of a foundational Kimberley gas business, with Rafael as the cornerstone asset. The company’s conservative approach, strategic partnerships, and alignment with regional energy policies position it well to deliver sustainable growth and shareholder value. The Rafael Gas Project’s anticipated cash flows from 2028 could materially reshape Buru’s market valuation and regional energy landscape.
Bottom Line?
Buru’s cautious yet strategic advance toward Rafael’s 2026 FID sets the stage for a transformative regional energy supply shift.
Questions in the middle?
- Will Buru secure the necessary funding for the 2026 appraisal drilling on schedule?
- How will evolving gas and condensate market prices impact the project’s economic viability?
- What regulatory or Traditional Owner approvals could influence the project timeline?
