First shipment of HDNG for State Gas

State Gas has successfully shipped its first cargos of high-density natural gas (HDNG) using its virtual pipeline trailers (VP).

These are the first shipments of HDNG under the offtake arrangement announced in April, that will see State Gas’ HDNG used in the ongoing trials of hybrid mine-truck engine technology at a major coal mine in Central Queensland.

“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 dales early next calendar year,” State Gas chief executive officer Doug McAlpine said.

“This will allow State Gas to meet increasing demand for HDNG.”

HDNG volumes will increase progressively over coming weeks in parallel with the ramp up of gas production from State Gas’ 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 is set to be at a sustainable premium to the spot price of raw pipeline gas.

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.

“The task of delivering innovation of this scale in the CSG industry has posed challenges in both time and cost,” State Gas executive chairman Richard Cottee said.

“However, in the HDNG facility, the company has created an asset of substantial strategic and commercial values.”

Cottee said State Gas had 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 large-scale applications of HDNG,” he said.

“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.”

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