First Shipment of HDNG
Brisbane, May 20, 2024 AEST (ABN Newswire) - State Gas Limited (
ASX:GAS) (STGSF:OTCMKTS) has successfully shipped its first cargos of high-density natural gas ("HDNG") using its Virtual Pipeline trailers. These are the first shipments of HDNG under the offtake arrangement announced on 5 April 2024, that will see State Gas' HDNG used in the ongoing trial of hybrid (diesel/natural gas) mine-truck engine technology at a major coal mine in Central Queensland.
HDNG volumes will increase progressively over coming weeks in parallel with the ramp up of gas production from State Gas's HDNG Facility and the efficient integration of the hybrid truck engines into the operating mine-truck fleet at the customer's site.
The provision of HDNG is a bundled gas supply solution, which reflects significant value when compared to raw natural gas sourced from the traditional pipeline network. The ability to supply flexible quantities of natural gas to locations remote from traditional pipeline infrastructure means that State Gas' HDNG will be at a sustainable premium to the spot price of raw pipeline gas.
The HDNG technology developed by State Gas provides the Company with significant first mover advantage in providing alternative fuel sources to diesel, as part of reducing the emission profile of various industrial activities. Natural gas has lower carbon content than diesel and produces around 25% less CO2 per unit of energy during combustion. In addition, natural gas contains significantly lower levels of other harmful particulates when compared with diesel. The State Gas HDNG plant also provides a reliable method for capturing and commercialising production testing gas which has historically been released to the atmosphere.
Since commissioning of the HDNG plant, State Gas has received unsolicited inquiries for, not only the supply of HDNG, but also the wider application of its HDNG technology to support a variety of diesel substitution applications.
State Gas' Executive Chairman, Mr Richard Cottee said, "The task of delivering innovation of this scale in the CSG industry has posed challenges in both time and cost. However, in the HDNG Facility, the Company has created an asset of substantial strategic and commercial value. State Gas has brought to market a flexible fuel source at a time when environmentally superior alternatives to diesel are urgently required. We believe supporting diesel substitution in the coal industry is the first of many potential largescale applications of HDNG. In conjunction with the recently announced exploration grant funding, State Gas is now extremely well positioned to deliver improved returns to shareholders, by generating initial cashflow from its existing assets but, more importantly, through becoming a credible energy and technology provider."
State Gas' Chief Executive Officer, Mr Doug McAlpine said, "Success from the fully funded exploration program announced by the Company last week, means that additional production testing gas will likely be available for HDNG production and sales early next calendar year. This will allow State Gas to meet increasing demand for HDNG."
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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