Key facts
- Equus Energy and Alcoa have entered into a 10-year binding gas sales agreement.
- The agreement covers the supply of 50 TJ/d of gas from Equus' project offshore Western Australia.
- Alcoa will use the gas to power its alumina refineries in Western Australia.
- Alcoa will provide a $30 million advance payment to fund Equus' front-end engineering design study.
- The Equus project is designed to produce 50 TJ/d of domestic gas and 2 million tonnes/year of LNG for export.
Australian gas developer Equus Energy has finalized a 10-year binding gas sales agreement with global aluminium producer Alcoa. Under the deal, Equus will supply 50 terajoules per day (TJ/d) of natural gas from its planned Equus project, located offshore Western Australia, to Alcoa's alumina refineries in the region. This supply equates to 182 petajoules (PJ) over the agreement's term.
In exchange for the gas supply, Alcoa will provide an advance payment of $30 million to Equus. This funding is designated to complete a front-end engineering design (Feed) study for the Equus project, situated in Western Australia's North West Shelf region, and will cover project costs until a final investment decision (FID) is reached. Equus, formerly known as Western Gas, completed a pre-Feed study in May, confirming a project design capable of producing 50 TJ/d of domestic gas, 2 million tonnes per year of LNG for export, and 12,000 barrels per day of condensate over a 15-year operational life.
The Equus project is expected to address a projected peak day gas supply shortfall in Western Australia and is anticipated to represent 5% of the state's domestic gas market upon completion. According to the Australian Energy Market Operator's (Aemo) 2025 Western Australian Gas Statement of Opportunities, peak day gas demand in Western Australia is forecast to increase by 36% to 558 TJ/d by 2035, despite an overall decline in annual gas consumption due to the growth of wind and solar power generation. The agreement with Alcoa will fully satisfy Equus' obligations under Western Australia's domestic gas reservation policy, which requires producers to reserve at least 15% of their production for the domestic market.
Alcoa operates significant bauxite mining and alumina refining facilities in Western Australia. The company has been actively securing gas supplies, recently signing a three-year agreement with Woodside Energy and a 10-year deal with Chevron for 130PJ starting in 2028. These new agreements build upon Alcoa's existing 10-year contracts with Chevron, ExxonMobil, and Warrego Energy for a combined 198PJ of gas.