Australia's State Gas announces gas offtake arrangements

State Gas on August 24 announced sale arrangements for the gas produced from its Rolleston West (ATP 2062) project in the southern Bowen Basin in Queensland.

The company is utilising a virtual pipeline trucking approach to ship and sell compressed natural gas (CNG) to end users in the Bowen basin, with plans to commence as early as November 2023 following the successful construction and commissioning of its CNG facility.

State Gas has inked a memorandum of understanding (MoU) with Mine Energy Solutions (MES) to supply CNG immediately after the facility’s commissioning. MES is collaborating with several entities to install dual fuel (diesel to gas) engines in mining trucks as part of decarbonisation efforts in the coal sector.

Given that these projects are often located far from traditional gas infrastructure, State Gas's virtual pipeline trucking solution positions it to provide CNG to these initiatives. The MoU designates State Gas as MES' exclusive CNG supplier.

To accommodate future production volumes, including those up to the CNG facility's maximum compression capacity of 1.7 terajoules/day and beyond, State Gas has also entered into an MoU with Denison Gas for the joint development of a CNG intake facility at Denison's Rolleston gas plant.

According to State Gas, this collaboration allows the efficient receipt and processing of CNG transported using the virtual pipeline trucking solution. As part of the agreement, Denison will purchase up to 1 terajoules/day from State Gas for domestic gas market resale.

The primary source of gas for the CNG shipments is the Rougemont 2/3 lateral well system. The project received a boost with promising production testing results recorded between February 2023 and May 2023. Upon connection to the CNG facility, Rougemont 2/3 is expected to contribute approximately 0.75 terajoules/day of CNG to the supply.