State Gas Limited (STGSF) Mechanical Completion of CNG Facility
State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) has achieved mechanical completion and commenced commissioning of its compressed natural gas ("CNG") facility. When commissioned the CNG Facility will enable State Gas to process and sell up to 1.7TJ/day of production testing gas from the Company's Rolleston West Project.
Construction of the CNG Facility commenced on 19 October 2023 and experienced approximately forty five weather interrupted days during the construction program. Ninety-two uninterrupted construction days for achieve mechanical completion for a project of this type is an excellent outcome and generally in line with the company's original time estimates. Through the discipline and collaboration of its construction teams, the landholder and other stakeholder groups, the construction phase was completed with no reportable incidents and no lost time injuries.
The Rougemont 2/3 dual lateral coal seams gas well ("Rougemont 2/3") has been connected to the new surface processing equipment and gathering system and dewatering has recommenced in preparation for first gas production and sales. Pleasingly, observed water flow rates are greater than those achieved when Rougemont 2/3 was first dewatered in early calendar year 2023. Since Rougemont 2/3 was shut-in in May 2023, pressure in the coal seam gas reservoirs has naturally re-charged. The re-charge and increased water production rate indicate the productive coal seams have good lateral continuity and permeability and potential for gas flow greater than the previous 474,000 cubic feet per day. The wells are being continuously monitored and a program is in place to accelerate the desorption process while preserving the integrity of the underlying coal seams.
Initial cargoes of CNG will be sold to a local coal mine, that is in advanced stages of trialling diesel/gas hybrid truck engines as part of their coal mining truck fleet. The Company is working closely with that customer to align the gas production timetable with the customer's readiness timetable to receive cargoes of compressed gas.
State Gas believes that this "first-of-its-kind" in Australia CNG supply approach will create substantial opportunities for natural gas (an environmentally superior fuel source to diesel) to be used in a range of commercial applications which support lower carbon emissions. The CNG technology developed by State Gas provides it with significant first mover advantage in this regard.
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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