New LNG hub for Mid West miners to be online by October

WESTERN AUSTRALIAN mining companies are gearing up for new gas supply with a new LNG plant designed specifically for the industry to come online in the third quarter of this year.
New LNG hub for Mid West miners to be online by October New LNG hub for Mid West miners to be online by October New LNG hub for Mid West miners to be online by October New LNG hub for Mid West miners to be online by October New LNG hub for Mid West miners to be online by October

Excitement grows for future mining possibilities in WA's mid west region. A new LNG hub will supply miners with gas.

Paul Hunt

Senior Journalist: Energy & Commodities

Paul Hunt

 

The new LNG hub will be located in Mount Magnet, some 300km east of Geraldton in Australia's Mid West where excitement brews over future magnetite iron ore possibilities

Plans for the modular facility were announced by proponent Clean Energy Fuels Australia last year, but little detail on the size or scope of the project was made public at the time. 

Energy News can reveal the state-of-the-art project has been designed specifically to cater for new miners in the Mid West region. 

CEFA's LNG facility is officially under construction, with the modular plant being constructed overseas, and to be transported to WA and commissioned by October. 

It will provide about 500 tonnes of LNG per day under phase one of the development. This is a substantial increase on the original 250 tonnes of LNG first reported by Energy News in September last year. 

CEFA is operating under a unique agreement, whereby it buys gas from local producers and then liquifies it before trucking it to mine sites. The company has already signed two offtake agreements. 

The first supply agreement was with Silverlake Resources for its Deflector gold mine in the region. 

LNG will be trucked and then regasified for Silverlake's power station on site. 

A second supply agreement was made public last week, with little-known kaolin granite miner WA Kaolin inking an offtake for its drying and processing facility. 

WA Kaolin will take gas for 15-years to dry its clay-like resource and process it into marketable products for export. 

Further details on the size of offtake, or commercial value, were not made public. 

"We are thrilled to have entered into a 15-year contract with CEFA," WA kaolin chief executive Andrew Sorensen said.

"As we continue to progress our stage 1 program towards our target to be producing by year end 2021, it is vital for our development program that we lock in such important long term supplier agreements like this."

LNG will be trucked from a yet to be built plant at Mount Magnet the 600km south to Wickepin. 

Gas feedstock for the LNG facility will come from state gas fields, though CEFA have been koy on revealing which companies it will buy gas from. 

The company said it had selected Mount Magnet because of its proximity to transport links, existing pipeline infrastructure and mine sites. CEFA estimates that over 25 years of operation the first LNG train at the Mid-West LNG Hub would displace about 3 billion litres of imported diesel with domestically-sourced gas. 

Previously, CEFA managing director Romano Bernhard told Energy News that LNg would be "materially cheaper" than diesel for mining companies. 

The company is backed by global infrastructure fund Squared Capital which is supporting the financial aspect of the new plant.