Strike Energy has made an unconditional final investment decision (FID) to proceed with the development of the South Erregulla gas power plant in Western Australia.
The facility will deliver 85MW of firming power into the South West Interconnected System through the existing 132kVa line between Geraldton and Three Springs.
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The project’s FID economics have significantly enhanced since the feasibility studies published in June 2024, owing to a rise in projected plant utilisation and unexpectedly high future capacity credit prices.
The power station is projected to see its utilisation rise from 18.8% to a minimum of 30%, according to revised electricity demand and supply modelling informed by data published by the Australian Energy Market Operator during the 2026 capacity credits process.
The project has secured reserve capacity credits from 2026-27 and network access quantity for delivery of electricity to the grid.
The power plant will now move into the execution phase with an estimated cost of A$137m.
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By GlobalDataStrikes CEO and managing director Stuart Nicholls stated: “Today’s development decision marks the second leg in Strike’s Perth Basin gas acceleration strategy and the beginning of a new and highly attractive integration into peaking power.
“The integration of South Erregulla’s gas reserves into peaking gas power generation takes advantage of the proximal metro electricity transmission infrastructure to the gas field and the incremental value that integrated gas-to-power projects can generate from the spark-spread during short-term power prices coinciding with lower renewable generation.”
The power station will be constructed on 3,500 hectares of land area known as the Precinct, situated above the South Erregulla gas field within production licence L24, which is fully owned by Strike.
The commissioning is scheduled before October 2026, aligning with the start of energy sales in the capacity year of 2026-27.
Funding for the project’s construction will come from a A$217m financing package from Macquarie Bank and cash flow from Strike’s Walyering gas project.
