Echelon Secures 2.1 PJ Gas Deal with McArthur River Mining for 2026-27
Echelon Resources has inked a significant gas supply agreement with McArthur River Mining, locking in 2.1 petajoules of firm gas plus additional volumes for 2026 and 2027. This deal underscores Echelon’s growing role in powering key Northern Territory industries.
- 2.1 petajoules of firm gas contracted with take-or-pay terms
- Additional ‘as available’ gas supply agreed for 2026-2027
- Gas sourced from the Mereenie joint venture in the Amadeus Basin
- Pricing indexed to inflation (CPI) to protect contract value
- Joint venture partners include Central Petroleum, Cue Energy, Horizon Australia Energy
New Supply Agreement Strengthens Echelon’s Market Position
Echelon Resources Limited (ASX, ECH) has announced a new gas supply agreement with McArthur River Mining Pty Ltd, securing a firm commitment for 2.1 petajoules of gas, net to Echelon, to be delivered over 2026 and 2027. This contract includes take-or-pay provisions, ensuring a stable revenue stream for Echelon and its joint venture partners. Additionally, an agreement for ‘as available’ gas volumes provides flexibility to meet McArthur River’s operational needs beyond the firm supply.
Supporting Northern Territory Mining Operations
The gas will be supplied from the Mereenie joint venture, located in the Amadeus Basin, a well-established gas-producing region in Australia’s Northern Territory. McArthur River Mining relies on natural gas as a critical input for its mining operations, which extract materials essential for global infrastructure and technology development. Echelon’s CEO, Andrew Jefferies, highlighted the strategic importance of this partnership, emphasizing the role of reliable local gas supply in supporting Australia’s resource sector.
Joint Venture Collaboration and Contract Terms
The Mereenie joint venture comprises Central Petroleum Mereenie Pty Ltd (25%), Echelon Mereenie Pty Ltd (42.5%), Cue Mereenie Pty Ltd (7.5%), and Horizon Australia Energy Pty Ltd (25%). The gas pricing is indexed to the Consumer Price Index (CPI), which helps safeguard the contract’s value against inflationary pressures over the two-year term. While specific financial details remain undisclosed, the take-or-pay clause indicates a firm commitment from McArthur River Mining, providing Echelon with predictable cash flows.
Strategic Implications and Future Outlook
This agreement marks a significant milestone for Echelon as it continues to develop its portfolio of Australasian energy assets. The deal not only secures near-term revenue but also strengthens Echelon’s reputation as a dependable gas supplier to major industrial customers. Looking ahead, the company and its partners remain vigilant for further opportunities to expand their asset base and capitalize on growing demand for domestic gas in Australia and the wider region.
Bottom Line?
Echelon’s new gas deal cements its role in powering Northern Territory mining, setting the stage for growth amid evolving energy demands.
Questions in the middle?
- What are the detailed pricing terms beyond CPI indexing and how do they compare to market rates?
- How will this contract impact Echelon’s overall production and revenue guidance for 2026-27?
- Are there plans to expand gas supply capacity at Mereenie to meet future demand from other industrial customers?
