The company’s compressed natural gas facility (CNG) is about to be complete, while sale of compressed gas are to commence mid-February. State Gas will use virtual pipeline (VP) technology to supply natural gas to its consumers.
The CNG facility is now in the final stages of completion and commissioning and State Gas is confident of shipping initial cargoes of compressed natural gas in February 2024.
Once gas is introduced and processed through the CNG facility, it will be immediately captured in VP trailers and will be capable of delivery to State Gas’ initial customer.
State Gas will commence initial gas sales using its VP as soon as commissioning gas is processed through the CNG facility and the company’s first customer is ready to receive cargoes.
VP technology allows supplying natural gas to consumers who are in remote locations or far from pipelines.
Fuel and gas are supplied by cryogenic tanks or containers that allow natural gas to be transported in a liquid state occupying a reduced space.
When implemented in conjunction with VP trailer technology, the company will be able to deliver up to 1.7 terajoules/day of pipeline quality natural gas to end users in the Southern Bowen Basin and surrounding areas.
This technology has a range of benefits and potential use cases, as it:
- Delivers substantial environmental benefits to gas producers, as it provides a reliable method for capturing and commercialising production testing gas which has historically been released to the atmosphere.
- Provides a new path to market for pipeline quality natural gas which the company believes will become increasingly important across a range of industries, including critical minerals, while the economy continues its long-term transition to renewable energy sources.
- Is modular and can be efficiently expanded and easily relocated to support gas testing and processing opportunities in new locations.
- Provides access to a new fuel source for end users who are seeking access to smaller, flexible quantities of natural gas, but don’t have access to traditional pipeline infrastructure and need to accelerate a transition away from diesel.
Revenue from sale of gas will support State Gas’ further investment in refining and scaling the CNG technology as well as further measured investment in exploration activities.
Challenging weather conditions on site, during December 2023 and January 2024, including extreme rain events associated with Cyclones Jasper and Kirrily, have impacted the company’s original commissioning timetable and project costs.
This is a first of its kind facility in Australia and State Gas has created valuable intellectual property for the company as it has dealt with the establishment costs that are inevitable with projects of this type.
The company now requires a period of successive dry weather days to allow mechanical completion activities and the introduction of hydrocarbons into the CNG facility to be efficiently undertaken.
State Gas currently anticipates improved weather conditions on site later this week and resources mobilised to undertake final completion activities on Monday 5 February 2024.
In accordance with this timetable, and subject to successful mechanical completion sign-offs, hydrocarbons will be introduced into the plant in the following week.