QPM Energy powering up with plans for new gas-fired plant at Isaac Energy Hub

• QPM Energy developing new Issac Energy Hub to support Queensland’s ongoing energy transition
• Stage 1 of the hub will be the Isaac Power Station, a 112MW gas-fired power station with annual revenue of $71m
• Final investment decision targeted for December 2025 quarter ahead of 2027 commissioning

Special Report: QPM Energy is expanding its energy business by developing new electricity generation and energy storage assets that will complement its existing Moranbah gas production and infrastructure assets.

The Isaac Energy Hub will deliver flexible, controlled electricity generation and long duration energy storage to support Queensland’s ongoing transition to a low carbon electricity network. The first stage will see the development of a 112 megawatt gas-fired power station – the Isaac Power Station.

This will increase QPM Energy’s (ASX:QPM) portfolio of dispatchable generation to 284MW and provide the platform for further expansion towards its target of 500MW.

A 2km transmission line will be required to connect the power station to Powerlink Queensland’s Moranbah 132kV substation.

The company has completed a feasibility study that estimates the power station will generate average annual revenue of $71m with an operating margin of $49m over a 30 year life.

Capex has been estimated at $215m including contingency and commissioning is targeted for mid-2027.

This plant will be underpinned by the company’s current proved and probable gas reserves of 435 petajoules of gas and will be co-located with its existing Moranbah gas processing and compression facility at PL191.

De-risking the development, QPM has secured 55.8MW aeroderivative gas turbines from GE Vernova under a fixed price contract.

This allows the company to side-step the procurement lead time for some gas turbines of 5-7 years due to an unprecedented surge in the demand for gas turbines, driven by AI and data centre growth.

Contracting these turbines gives much greater certainty to the development of the Isaac Power Station.

“It’s clear that flexible, gas fired generation will be critical to help firm the grid as part of the energy transition,” chief executive officer David Wrench said.

“The development of the Issac Power Station is a major step forward in QPM’s strategy to build a scalable and reliable utility company.”

Isaac Power Station

The Isaac Power Station is expected to have an intermediate dispatch profile (peak and shoulder) of 10 hours per day, providing power to the Queensland grid at the most critical times.

Development and construction is expected to take 18-24 months from a final investment decision with the company flagging that a final investment decision in the December 2025 quarter would enable commissioning as early as mid-2027.

This plant will consume an estimated 11 terajoules of gas per day (4 petajoules per year) at a gas supply cost of $4.50 per gigajoule ($4500/TJ) based on internal supply cost from the Moranbah gas project.

Operating costs excluding the cost of gas is estimated at between $4m and $5m.

It is expected to substantially increase QPM’s revenue and earnings with over 75% of its revenue coming from electricity sales.

The company has substantially de-risked project delivery and schedule by procuring two 55.8MW gas-fired LM6000 aeroderivative turbines from GE Vernova under a fixed price contract.

LM6000 are ideal for peaking and base load generation and grid firming applications with the ability to start and stop multiple times per day if required while remaining cheaper to operate and maintain over the life compared to other turbines and reciprocating engines.

Being able to operate on non-pipeline spec gas that is at least 50% methane content is another benefit as it would allow the power station to run on waste coal mine gas collected by QPM that cannot be fed into the North Queensland Gas Pipeline.

QPM has also appointed RBC Capital Markets as its financial adviser to arrange project development funding.

“With gas turbines secured, substantial gas reserves and low-cost production, and co-located infrastructure, QPM Energy is well positioned to fast track the delivery of reliable, dispatchable energy generation supply to the market with strong long-term margins,” Wrench said.

“The development of the Isaac Power Station will support Queensland’s energy transition, meeting the State Government’s call for more gas-fired generation.”

There is potential for expansion as modelling by the company’s grid consultants has indicated there’s up to 300MW capacity available at the Moranbah substation.

QPM also has extensive gas reserves to underpin additional gas supply to an expanded power station and has extensive land available on site.

Adding interest, PL191 has overlapping tenure with Anglo American’s Teviot Brook coal mine.

While mining is currently being undertaken on non-QPM tenure, the mine is expected to crossover into PL191 during the planned life of the power station.

Once this occurs, the company will have rights to the waste gas being produced from Teviot Brook and could utilise it at Isaac.

Placement and share purchase plan

To facilitate the procurement of critical long-lead items, QPM has successfully raised $10m through an oversubscribed placement of shares priced at 3.1c each to institutional and sophisticated investors.

This includes securing the two gas turbines.

Separately, the company will conduct a share purchase plan offering existing shareholders the opportunity to subscribe for up to $30,000 worth of shares each to raise about $2m.

Proceeds from the SPP, which is not underwritten, will be used to accelerate development of the power plant.

“This equity raising, together with the SPP, will allow the QPM team to accelerate the development of the Isaac Power Station, lock in key long lead items and project financing,” Wrench added.

Other activity

QPM expects to complete the overhaul of its 242MW Townsville power station, which started at the end of March 2025, in July.

This major overhaul will allow the power station to operate for more than 1250 starts before the next overhaul is due.

In anticipation of the commissioning of the Townsville power station and its return to service, the company has started ramping-up gas production and increasing gas inventory in the NQGP.

Notably, this coincides with the start of new commercial agreements for both the power station and pipeline that will deliver significant savings compared with historical agreements.

QPM also provided guidance for FY2026, saying that it expects to produce 10.6-11.3PJ of gas with gas sales totalling 7.4PJ.

Electricity dispatch is expected at between ~180,000MW and ~210,000MW.

This article was developed in collaboration with QPM Energy, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.