Strike shares surge on gas engine contract
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The news: Strike Energy shares surged after it announced a $48.5 million contract with Clark Energy to procure 20 gas reciprocating engines for its proposed South Erregulla gas power plant.
The numbers: Strike’s share price were 6.25% higher at $0.21 close to the end of ASX trading.
The contract will allow Strike to procure and commission the 4.5 megawatt (MW) Jenbacher reciprocating gas engines as part of its proposed 85 MW peaking gas power plant at South Erregulla.
The contract also secures slots in the Jenbacher factory and delivery times to meet the October 2026 start date for the power plant.
The final investment decision will be made in November 2024, subject to capacity allocation from the Australian Energy Market Operator in August 2024 and the minimum required network access quantity in November 2024.
The context: As part of the contract, Clarke Energy will also provide commissioning support to the peaking gas power plant. Since 2017, Clarke has delivered Jenbacher gas engines into the UK.
Strike said reciprocating gas engines were preferred over turbine technology as they were more efficient and had quicker start up and response times.
The source: ASX announcement
