‘Pick me’: Suitors make their case in Rinehart gas takeover battle

The major shareholder still in play is Mineral Resources, which bought a 16 per cent stake in Warrego in early January.

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Nicholls said two miners moving into gas production to secure their supply was symptomatic of what was going on in the WA gas market.

Mineral Resources bought the 16 per cent stake in Warrego in early January and is taking over Norwest Energy, which has a minor interest in the Mineral Resources-controlled Perth Basin field Lockyer Deep.

Minerals Resources has interests in lithium processing and Rinehart’s Atlas Iron is investigating an energy-intensive magnetite project in the Pilbara.

“There’s a realisation that gas is going to become increasingly scarce,” Nicholls said.

Unlike the retail shareholders choosing between Strike and Hancock’s offers, Mineral Resources has a third option – to launch its own takeover.

“At this stage, Mineral Resources have not made their intentions known,” Nicholls said.

Strike is investigating the feasibility of building a urea plant to use some of the gas it expects to produce, but will need an equity partner to help shoulder the $3 billion spend. The other destination for gas – export through Woodside’s underutilised North West Shelf export plant – is not open due to the WA government’s ban on the export of onshore gas.

Nicholls said the “political backdrop” in WA, which has had a gas shortage for the past week, could make the granting of exemptions to the ban unlikely.