Buru Teams Up with Clean Energy Fuels for LNG Project

Buru Energy (ASX: BRU) has locked in a key partnership with Clean Energy Fuels Australia (CEFA) to fast-track its Rafael Gas Project in Western Australia. This deal is a big step in Buru’s shift from an explorer to a full-fledged gas producer, with commercial operations hoped to kick off in the second half of 2027.

A Local Energy Solution

The Rafael Gas Project, based in the Canning Basin, will replace expensive trucked and imported fuels with a local supply of liquefied natural gas (LNG) and condensate. CEFA, backed by global investment firm I Squared, brings expertise in small-scale LNG infrastructure.

How the Partnership Will Work

Buru will handle drilling, well recompletion, and approvals, while CEFA will finance, build, own, and run a small-scale LNG processing plant at the Rafael 1 site. This facility will produce up to 300 tonnes of LNG daily, with CEFA managing distribution to customers.

The two companies will co-market LNG and condensate and CEFA will recover its investment through processing fees over the project’s estimated 20-year lifespan.

The goal is to finalize binding agreements by late 2025 and make an investment decision in early 2026.

What the CEOs Are Saying

Buru CEO Thomas Nador called the deal a “watershed moment” for the company. “Rafael is the only confirmed source of conventional gas and liquids in onshore Western Australia north of the North West Shelf Project. It is a unique opportunity to provide energy to a growing market that is not connected to a gas pipeline and currently faces challenges with high energy costs and security of supply,” he said.

CEFA/Octa Group CEO Basil Lenzo highlighted the project’s role in lowering costs and emissions. “Our proven virtual pipeline or ‘trucked LNG’ model lowers long-term regional energy costs and emissions and provides a viable alternative to diesel for new and existing energy users,” he said.

Next Steps and Near Term Funding

Buru is working through Native Title and environmental approvals while prepping for Rafael 1 well recompletion and extended flow testing in Q3 2025 - key steps before independent reserves certification. A second well, Rafael B, is slated for drilling in 2026 to confirm the resource’s full potential.

To fund upcoming drilling, Buru is exploring partnerships, including potential farm-in deals. Reserve certification is anticipated to be a milestone for securing long-term financial backing. Buru reported cash at bank of A$7.9M at the conclusion of the December quarter.