Mechanical Completion of CNG Facility
Brisbane, Feb 29, 2024 AEST (ABN Newswire) - State Gas Limited (
ASX:GAS) (STGSF:OTCMKTS) 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.
About State Gas Limited
State Gas Limited (ASX:GAS) is a Queensland-based developer of the Reid's Dome gas field, originally discovered during drilling in 1955, located in the Bowen Basin in Central Queensland. State Gas is 100%-owner of the Reid's Dome Gas Project (PL-231) a CSG and conventional gas play, which is well-located 30 kilometres southwest of Rolleston, approximately 50 kilometres from the Queensland Gas Pipeline and interconnected east coast gas network.
Permian coal measures within the Reid's Dome Beds are extensive across the entire permit but the area had not been explored for coal seam gas prior to State Gas' ownership. In late 2018 State Gas drilled the first coal seam gas well in the region (Nyanda-4) into the Reid's Dome Beds and established the potential for a significant coal seam gas project in PL 231. The extension of the coal measures into the northern and central areas of the permit was confirmed in late 2019 by the Company's drilling of Aldinga East-1A (12 km north) and Serocold-1 (6 km to the north of Nyanda-4).
State Gas is also the 100% holder Authority to Prospect 2062 ("Rolleston-West"), a 1,414 km2 permit (eight times larger than PL 231) that is contiguous with the Reid's Dome Gas Project. Rolleston-West contains highly prospective targets for both coal seam gas (CSG) and known conventional gas within the permit area. It is not restricted by domestic gas reservation requirements.
The contiguous areas (Reid's Dome and Rolleston-West), under sole ownership by State Gas, enable integration of activities and a unified super-gasfield development, providing economies of scale, efficient operations, and optionality in marketing.
State Gas is implementing its strategic plan to bring gas to market from Reid's Dome and Rolleston-West to meet near term forecast shortfalls in the east coast domestic gas market. The strategy involves progressing a phased appraisal program in parallel with permitting for an export pipeline and development facilities to facilitate the fastest possible delivery of gas to market. State Gas' current focus has been to confirm the producibility of the gas through production testing of the wells.
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