Advent, which is owned by three East Perth based companies - MEC Resources, BPH Energy and Grandbridge - and Queensland Talbot Group's said it had signed a non-binding letter of intent with Northern Minerals for the future supply of gas for the full development of a proposed mine at Browns Range.
The letter provides an initial framework for discussion, information sharing and negotiation towards a possible gas supply agreement.
"This is an excellent development for Advent and its key onshore Bonaparte Basin assets EP386 and RL1 in the drive for their commercialisation," Advent director David Breeze said.
He said Browns Range had the potential to become a globally significant project.
Advent has 2C contingent resource of 11.5 billion cubic feet in the Weaber gas field within RL1 (100%), while EP386 has recoverable prospective resource estimates range from 53.3Bcf to 1.326.3 trillion cubic feet, with a best estimate of 355.9Bcf of gas
Market studies have identified a current market demand of up to 30.8 terajoules per day of power generation capacity across the Kimberley region that could potentially be supplied by Advent's conventional gas projects.
As one of the few companies with gas resources in the wider Kununurra region in Western Australia, Advent is hoping to be one of the beneficiaries of development in northern Australia and $5 billion in Commonwealth funding to develop the north.
The federal government's White Paper on Developing Northern Australia estimates and increase in electricity consumption of 52% by 2018 for northern Western Australia alone.
Modern exploration in the onshore Bonaparte Basin started with the discovery of a good quality Early Carboniferous source rock in Spirit Hill-1 in 1959, but it took until the mid-1980s for the Weaber gas field to be discovered and tested.
Various hands appraised Weaber over the next 16 years, and made the Waggon Creek-1 and Vienta-1 discoveries in the late 1990s, but so far the modest 3C resources of about 45Bcf remain stranded.
But as soon as they can be unlocked, Advent, which has successfully flow tested several wells drilled by previous explorers, says there is also the potential for unconventional resources of the Langfield, Ningbing and Cockatoo groups as well as the Milligans Shale, where it estimates there could be as much as 141Tcf in place from formations that range from 300m thick to over 1500m.
Advent says its Milligans Shale is many times thicker than Argentina's highly promising Vaca Muerta, and the estimates used by Australian Council of Learned Academies, which peg the Milligans shale at 6Tcf.
Weaber is 15km across the WA-Northern Territory border, while Northern Minerals' dysprosium prospect is situated on the Browns Range Dome, a major geological feature covering some 1500sq.km in the northern Tanami region straddling the same border.
Last month Northern announced a new business plan it hopes will finally see Browns Range developed, after years of false starts.
It aims to derisk the project with a 60,000 tonne per annum pilot plant.
Northern says it is in negotiations with potential offtake partners and strategic investors to fund stage one, despite the fact that the market for rare earths is one of the worst in years.
The mining operation will consist of an open pit mining campaign over five months from relatively shallow pits at the Wolverine, Gambit West, Gambit Central and Gambit East deposits to remove 172,080t of mineralised material grading 1.19% TREO.
Stage two involves completing the project development studies and undertaking the engineering and design to a bankable feasibility level.
Stage three is full-scale production.
While the $US18 million pilot plant will use diesel generation, a full development would benefit from locally sourced gas to reduce running costs,
If developed, Browns Range has a projected 11-year life.
