Prospex Energy (PXEN), an investor in European gas and power projects, has signed a gas sales agreement with BP Gas Marketing for the forecast gas production from the Podere Maiar-1 production facility in the Selva Malvezzi production concession in Italy, in which Prospex has a 37% working interest alongside ASK traded Po Valley Energy.
The 18-month contract, starting from 1 April 2023, is estimated to supply around 37 million standard cubic metres of natural gas to BP Gas Marketing, with the gas supply price linked to Italy's "Heren PSV day ahead mid" price assessment. The first gas is expected to be produced in early Q2 2023.
Mark Routh, Prospex's CEO, commented: "The gas sales agreement with BP Gas Marketing Ltd marks a significant milestone for the Company and its joint venture partner, Po Valley as we get closer to first gas production from the Selva field development.
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This agreement is welcome after Prospex and Po completed fundraisings last year to complete the Selva field development, and it’s encouraging to see such rapid progress in securing offtake partners after final approval of the project only three months ago.
Prospex has made the right investments to answer strong European demand for locally produced energy. As has been the case with its 49.9% owned El Romeral plant in Spain – which is now fully operational - Prospex's natural gas operations in Italy are expected to yield strong revenues amid rocketing energy prices. The introduction of a second revenue stream from Selva field will further strengthen Prospex's financial position.
Investors have also welcomed Prospex's diversification into solar. The company's pilot solar Project Apollo paved the way for the much larger Project Helios, a 5 MW array to be built next to El Romeral and cogenerate with the plant, sharing its connection to the Spanish grid. Project Helios is currently at FEED stage. Solar in the Toledo province of Spain currently has an ROI of only 3-4 years, making this an ideal hedge for the company.