Gas is the name of the game for Queensland Pacific Metals. Pic: Getty Images
Energy
Special Report: With gas expected to be in short supply in eastern Australia, Queensland Pacific Metals has elected to change directions and focus immediately on advancing its producing Moranbah gas project in Queensland.
The Australian Energy Market Operator recently forecast in its Gas Statement of Opportunities that eastern Australia faced the potential for shortfalls on extreme peak demand days from 2025 and the potential for small seasonal supply gaps from 2026.
It also highlighted the need for new gas-fired generation capacity to support the grid’s transition to renewables and replace scheduled coal-fired power station closures.
This expected supply shortfall is tailor-made for companies with emerging gas projects to capitalise on and that’s exactly the (very promising and enviable) situation that Queensland Pacific Metals (ASX:QPM) now finds itself in.
The company had originally acquired the Moranbah gas project in Queensland’s Bowen Basin in August last year from Arrow Energy and AGL to secure gas supplies for its then flagship TECH nickel project.
Moranbah captures waste mine gas (methane) from coal mines and makes it available for use to customers. This currently generates a not insignificant 10 petajoules of gas per annum.
It also has existing offtake with gas supplied to the Townsville power station, a 240MW gas-fired peaking generator owned by Thai company RATCH and to Dyno Nobel’s ammonium nitrate plant in Moranbah.
The project currently has proved and probable (2P) reserves of 240PJ, meaning there’s enough gas for some 20 years of production at current rates and a best estimate (2C) contingent resource of 269PJ that has the potential to be converted into more reserves.
Given its strengths, QPM is now looking to leverage the Moranbah project’s reserves and production to help meet the need for gas in eastern Australia.
It now intends to accelerate the turnaround of the project by increasing production, reserves and coal mine waste gas supply.
As part of this change, it has moved to limit further expenditure on its TECH project and has appointed QPM Energy chief executive officer David Wrench as the CEO of the parent company to lead the transition.
“Since completing the acquisition of the Moranbah Project, we have uncovered many exciting opportunities to grow production, reserves and customer sales,” Wrench noted.
“Accelerating these opportunities will position QPM Energy to take advantage of the tailwinds in the Australian gas and energy sector to deliver value for shareholders.”
QPM plans to drill and complete seven new wells before the end of this year to increase gas production.
It also intends to carry out additional well workovers to increase the fields producing well count by returning existing off-line wells to production.
Other activities include optimising the gathering system, increasing production from third party supply of mine waste gas from regional coal mines, and developing a portfolio of new baseload and peaking generation at its facilities.
In the longer-term, the company will assess development of compressed natural gas and micro-LNG facilities in Moranbah and Townsville to distribute gas to North Queensland energy users.
This article was developed in collaboration with Queensland Pacific Metals, 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.
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