The QPM Energy Story
Vertical Integration of Energy Supply Chain: Acquisition of the Moranbah Project
Queensland Pacific Metals Limited (ASX:QPM) (“QPM”) has achieved a significant milestone in the vertical integration of its energy supply chain through the acquisition of the Moranbah Project. Wholly owned subsidiaries of QPM and QPM Energy Pty Ltd (“QPME”) have entered into a conditional agreement to acquire 100% of assets from the Moranbah Gas Project and North Queensland Energy Joint Venture (collectively the “Moranbah Project”) (the “Transaction”) from the Arrow Energy Group and AGL Energy Ltd (the “Sellers”).
The acquisition of the Moranbah Project delivers an established coal mine waste gas project with production, 240 PJ of 2P reserves, and existing infrastructure capable of processing up to 30 PJ per annum. This acquisition will secure a long-term, economically sustainable gas supply for the TECH project, avoiding exposure to the extreme price volatility of the Eastern Australian gas market.
The TECH project expects to achieve its sustainability target of negative 989,000t CO2e emissions per annum, as calculated in the Minviro Life Cycle Assessment, which was conducted in accordance with ISO standards, including third-party peer review (see ASX release 25 November 2022). With this acquisition, QPM will now have two carbon abatement hubs in the Northern Bowen Basin, facilitating the collection and beneficial use of waste coal mine gas. The Moranbah Project is already directly connected to five operating coal mines and has the capacity to quickly connect additional mines.
Furthermore, the acquisition includes an operating business with significant revenues from gas sales of 7 PJ per annum to the Dyno Nobel Moranbah Ammonium Nitrate Plant, owned by Incitec Pivot Limited (“IPL”). Contracts are also in place to transport and toll gas through the Townsville Power Station for peaking electricity generation, with all electricity revenues accruing to QPME.
Upon completion of the Transaction, QPME will pay the Sellers $5 million as consideration for the Moranbah Project assets, and QPME will receive $35 million as consideration for assuming obligations to supply gas under the Moranbah Project contracts. The Transaction is anticipated to close around June/July 2023.
QPM is uniquely positioned to create significant value from the Moranbah Project through the creation of a vertically integrated energy supply chain. In support of the acquisition, QPME and IPL are in advanced negotiations to finalize a long-term gas supply agreement for the Moranbah Ammonium Nitrate Plant, including potential funding support to further develop the Moranbah Project.
For further details, please refer to the ASX release dated 5 April 2023.
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