State Gas Limited (STGSF) Compressed Natural Gas Off-take Arrangements
State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) is pleased to provide an update on the sale arrangements for gas produced from its Rolleston West (ATP 2062) project in the southern Bowen Basin. Using its virtual pipeline trucking approach, the Company intends to commence shipping and sale of Compressed Natural Gas Off-take Arrangements ("CNG") to end users in the Bowen Basin as early as November 2023 after the successful construction and commissioning of its compressed natural gas facility.
The Company has entered into a Memorandum of Understanding ("MOU") with Mine Energy Solutions Pty Ltd ("MES") to supply CNG immediately after commissioning of the CNG Facility. MES are working with a number of organisations to install dual fuel (diesel to gas) engines in mining trucks as part of de-carbonisation initiatives in the coal sector. The dual fuel engines require CNG. The majority of the organisations working with MES are remote from traditional gas infrastructure and consequently State Gas's virtual pipeline trucking solution uniquely positions it to provide CNG to these projects. Under the terms of the MOU, State Gas are MES' exclusive supplier of CNG.
To support future production volumes up to the maximum compression capacity of the CNG Facility of 1.7TJ/day and beyond, State Gas has also entered into an MOU with Denison Gas [insert] ("Denison") under which it will jointly develop a CNG intake facility ("the Intake Facility") at Denison's Rolleston Gas Plant. State Gas and Denison have been working closely to jointly develop the relevant engineering solutions which will allow the Intake Facility to efficiently receive CNG delivered using State Gas' virtual pipeline trucking solution for processing at the Rolleston Plant. As part of this arrangement, Denison will purchase up to 1.0TJ/day from State Gas for on-sale into the domestic gas market in conjunction with its existing daily spot capacity.
Executive Chairman, Richard Cottee said "State gas has shown itself to be at the forefront of innovation with its CNG Project being the first time CSG from the field is being sold as Compressed Natural Gas. The MES offtake for conversion of diesel fleets to a lower carbon dual fuel highlights how important natural gas remains in the transition to a lower carbon future. The Company has developed an initial path to market for its initial cargoes of CNG, in addition to a longer-term solution which will provide a pathway for much greater volumes of CNG to be processed and sold into domestic and export gas markets. These off-take arrangements reflect the value that the Company has unlocked through its flexible virtual pipeline trucking solution and provides it with multiple markets for its production over time."
Doug McAlpine Chief Executive Officer Phone: 0488 007 889 Email: doug@stategas.com Richard Cottee Executive Chairman Phone: 0458 517 850 Email: richard@stategas.com
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