Equus Locks in Alcoa as 10-Year Gas Customer Plus US$30M Funding Toward FID

Equus locks in Alcoa as foundation gas customer with binding 10-year supply deal

Equus Energy (ASX: EQU) has executed a binding conditional Gas Sales Agreement (GSA) with Alcoa of Australia, establishing Alcoa as the Equus Gas Project’s foundation domestic gas customer. The agreement represents a major commercial milestone, anchoring the project on its pathway toward Final Investment Decision while securing a blue-chip counterparty for long-term gas supply.

Under the 10-year supply term following project start-up, Equus will make available approximately 50 TJ/day of gas to Alcoa, equivalent to approximately 182 PJ over the contract term. This volume represents approximately 5% of the Western Australian domestic gas market, positioning the Equus Gas Project as a material contributor to the state’s energy security as reliable long-term supply remains critical for major industrial users.

The GSA forms part of the broader Gas Sales and Funding Agreement between the two parties, which provides Equus with access to up to US$30 million of project funding to support advancement through Pre-FEED, FEED and toward Final Investment Decision. The dual-component structure links commercial offtake certainty with capital to progress development studies, de-risking the pathway to first gas.

Inside the deal — supply terms and the linked US$30 million funding

The announcement comprises two connected transactions that together strengthen Equus’ commercial and financial position. The GSA commits Alcoa to purchase ~50 TJ/day of gas over a 10-year period from project start-up, totalling ~182 PJ across the contract term. This volume satisfies the Equus Gas Project’s domestic gas supply commitment under Western Australia’s Domestic Gas Reservation Policy, a key regulatory hurdle for LNG-export linked developments in the state.

The funding component provides Equus with up to US$30 million to advance Pre-FEED, FEED and toward FID, supporting the technical and commercial workstreams required to progress the project through its development phases. The funding is structured to align capital availability with project milestones, reducing Equus’ pre-FID funding burden while maintaining commercial alignment with a foundation customer.

Importantly, the agreement is described as binding conditional, meaning the GSA is enforceable but subject to conditions precedent that must be satisfied before gas supply obligations commence.

Why Alcoa matters as an anchor customer

Alcoa of Australia is a major integrated aluminium producer and Western Australia’s largest domestic gas user, operating energy-intensive alumina refineries and aluminium smelters across the state. Securing a counterparty of this scale and operational footprint provides significant commercial credibility as Equus progresses project partnering and seeks to finalise funding arrangements toward FID.

For an early-stage developer, an anchor customer of Alcoa’s stature validates demand fundamentals and de-risks the project’s commercial pathway. The agreement demonstrates that the Equus Gas Project can meet the supply requirements of large, credit-worthy industrial users while satisfying regulatory obligations under the state’s domestic gas policy framework.

Will Barker, Managing Director, Equus Energy

“The execution of this major Gas Supply Agreement with Alcoa demonstrates the strategic importance of the Equus Gas Project, as a large, proven and vital gas resource, that can meet the shortfalls in WA’s domestic market and backfill spare LNG capacity on the North West Shelf. Establishing Alcoa as our foundation domestic gas customer and funding partner for up to US$30 million, provides a strong commercial platform as we move into the next phase of the Project. With 100% ownership of the only independent, multi-Tcf gas resource on the North West Shelf, our focus is now on Project partnering and commercialisation as we drive Equus to a Final Investment Decision.”

The reference to backfilling spare LNG capacity on the North West Shelf underscores the dual-market opportunity the project offers — simultaneously addressing Western Australia’s domestic gas shortfalls while utilising existing export infrastructure for LNG sales into Asian markets.

Understanding the Equus Gas Project and the “tie-back” advantage

The Equus Gas Project is structured as a tie-back development, a term that refers to connecting a gas resource to existing infrastructure rather than constructing new standalone facilities. In this case, Equus proposes to tie back its offshore gas resource to the North West Shelf (NWS) infrastructure, which includes existing pipelines, processing facilities and LNG liquefaction trains.

This development model lowers capital expenditure significantly because it avoids the need to build new processing plants, pipelines or LNG terminals from scratch. It also accelerates the development timeline by leveraging infrastructure that is already in place and operational. For the North West Shelf, which has spare LNG processing capacity as mature fields decline, tie-back developments offer a pathway to extend the life and utilisation of existing assets.

Equus holds 100% ownership of the only independent, multi-Tcf gas resource on the North West Shelf, positioning it uniquely among junior developers in the region. The technical phase of Pre-FEED (pre-Front-End Engineering Design) confirmed a technically feasible, commercially robust and capital-efficient development pathway, validating the tie-back concept from an engineering and cost perspective.

For investors, this capital-efficient approach matters because it reduces the upfront funding burden required to reach first gas, shortens the timeline from FID to production, and provides dual-market optionality (domestic gas sales and LNG exports) that diversifies revenue and enhances project returns.

What’s next on the road to Final Investment Decision

Equus has now commenced partnering and commercialisation activities as it advances the project toward FID. The US$30 million funding from Alcoa supports progression through the key engineering and approvals phases required to reach a final development decision.

The roadmap to FID follows a standard phased pathway for offshore gas developments:

1. Complete Pre-FEED — the technical phase has already confirmed feasibility and capital efficiency.
2. Advance FEED studies — detailed engineering work supported by Alcoa funding to refine costs and project design.
3. Progress project partnering and commercialisation — secure additional offtake agreements and potentially equity partners to share development risk.
4. Continue approvals workstreams — advance environmental, regulatory and government approvals required for project sanction.
5. Drive toward Final Investment Decision — finalise all technical, commercial and financial arrangements to enable project sanction.

The broader investment thesis positions Equus as a new source of Western Australian domestic gas supply at a time when reliable long-term energy remains critical for major industrial users. The project has the potential to strengthen energy security, diversify sources of gas supply and support regional employment and economic growth. However, no specific FID timeline has been disclosed, and the pathway to final sanction remains subject to completing FEED, securing project partners, and satisfying all commercial and regulatory conditions.

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