Australian independent oil and gas exploration company, Strike Energy has selected Australian Gas Infrastructure Group (AGIG) to build a processing plant for West Erregulla gas.

Under the constract, AGIG will be responsible for the construction, ownership and operation of 50 TJ/d natural gas plant to process Strike’s gas from the first phase the West Erregulla development.

The natural gas facility will be built adjacent to the West Erregulla gas field with a raw gas trunk line connecting to the West Erregulla upstream development.

It will process raw gas to sales specification before delivering it into Western Australia’s gas transmission network.

Strike said that the project will see an investment more than $200m ($131.2m) in infrastructure and services by AGIG under a competitively priced long term tariff.

AGIG will now commence the front end engineering (FEED) on the project

Strike Energy managing director and CEO Stuart Nicholls said: “We’re excited about the long-term future of the Western Australian domestic gas market, and with our forecast low cost of production, believe we are in a prime position to move forward with confidence at a time when many in our industry are deferring or cancelling projects.

“AGIG has a long and successful history of operating infrastructure in the region and in building relationships with the area’s land holders and stakeholders.

“AGIG owns and operates Western Australia’s critical Dampier to Bunbury natural gas pipeline, which connects domestic gas production in the north to the major Western Australian South West market.”

The final investment decision on the project is expected to be made by the end of the year.

In preparation for that, AGIG will now commence the front end engineering (FEED), long lead procurement as well as the other early works required for tenure and project approvals before starting the construction.

In November last year, Strike Energy announced the completion of drilling and flow-testing operations of the West Erregulla-2 well in Australia.